Electric Cars - Global Trends


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Everbody talks about electric cars as the future of transport. Here are some of the challenges on the road. (June 2009)

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Electric Cars - Global Trends

  1. 1. Electric Cars – Global Trends Results of Finpro Foresight Ines Seidel, June 2009
  2. 2. Electric Car Trends - Overview 1. Background & Methodology 2. Global Electric Car Climate 3. Related Trends © Finpro ry /2
  3. 3. Background • The Ministry of Employment and Economy has established an official task force "Electric Vehicles in Finland“. The aim of the working group is to define the required measures for technology and innovation policy in order to strengthen the foundations of know-how and business aspects in Finland. • Finpro Foresight has been asked to use Finpro global network to get a view on current trends related to the use of Electric Cars. Can we find signals that relate to the development outlook, impact, business possibilities, as well as future needs of the branch in terms of research and development activities? • Finpro used the internal platform for sharing and discussing signals related to Electric Cars. The following presentations are an analysis of these signals, where appropriate, also developments that are only indirectly linked to electric cars have been included. – Deeper analysis into specific areas or regions could be a next step. © Finpro ry /3
  4. 4. Methodology: From Signals to Trends Signal Pattern/Trend Analysis: What is collection Recognition happening + samples Spillover Effects Do it Yourself Deeper Analysis of Options and Opportunites can be a next step © Finpro ry /4
  5. 5. Electric Car Trends - Overview 1. Background & Methodology 2. Global Electric Car Climate 3. Related Trends © Finpro ry /5
  6. 6. Signals refer to various parts of the electric car eco-system Manufacturing/R&D Car Industry crisis Society Context Battery R&D Progress Energy Crisis Competing Alternative Transport Economic Crisis Research Breakthroughs? Government Influence Consumer Acceptance (Costs, Mistrust, Convenience) Enabling Infrastructure Utilities Retail/Ownership Models Charging Infrastructure Insurance © Finpro ry /6
  7. 7. Questions that move the market • How long before electric vehicles become mass market? While some car manufacturers are sure that „the time for the mass-market zero-emission car has come‖ (Carlos Ghosn, Renault- Nissan), other experts believe that it may take at least a decade before electric cars Research firm Fuji Keizai Co predicts battery- enter the mainstream. powered electric vehicles to go mainstream in Japan only until late 2020s or 2030s High purchasing costs and lack of convenience are currently seen as the main obstacles towards mass adoption. Hybrid cars are seen as an interim solution. There is a hope for research breakthroughs towards better batteries or other alternative energy that could change the game completely. Financial incentives like subsidies speed up mass adoption already today. © Finpro ry /7
  8. 8. Questions that move the market • Who will be Winners and Losers? Establishing leadership in electric car technology is like the new race to the moon – every one wants to be first. There is a certain desperation in that competition as electric cars are seen as a way out of the crisis for the car industry ―When the electric revolution final and the economic crisis as a whole. comes, China's e-bike makers could have the last laugh‖ – Time, June 2009 This competition will inevitably lead to casualties – and potentially also to conflict over resources. In ―The flurry of ruthlessly competitive diplomatic and corporate overtures to Bolivia … is driven by the many cases, competition for same dream: ultimate control of the future global survival also leads to new market for electric vehicles. An ample supply of partnerships and also new value lithium, at least using current technology, is the critical weapon in that quest and Bolivia is to lithium chains/value networks are on the what Saudi Arabia is to oil, say geologists. ― Times horizon. online, June 2009 © Finpro ry /8
  9. 9. Questions that move the market • Will electric cars make ―How is using electric cars considered transportation environmentally green technology? If you still are tied to a nuclear power plant that produces save? waste that can‘t be disposed of, how is The concern that the electric car/battery that green?‖ – Letter to the Editor, Northwest Herald Feb 2009 industry is not really solving the energy and environmental problems of transport is ―The delusion lies in the idea we can voiced especially from activists and continue to live the way we do (eat, consumer groups. Being „a little less consume and travel) but do so in a "sustainable" fashion‖. Sydney Morning bad“ is not seen as sufficient. Also Herald, June 2009 urban planning increasingly encourages alternatives to cars. The suburban district Vauban was As health and safety are generally designed for living without a car. 70% of households do not own a car. growing more important to consumers, also electric vehicles need to address these topics. Some worry that electromagnetic fields generated by electric vehicles could cause cancer. © Finpro ry /9
  10. 10. Electric Car Trends - Overview 1. Background & Methodology 2. Global Electric Car Climate 3. Related Trends © Finpro ry / 10
  11. 11. Government Influence Only if the cost of ownership is heavily subsidized will the cost of electric cars be brought Countries like the U.S. or China have put down to an attractive level for it on their national agenda to develop a most consumers. - Comeback of leading role in electric car technology. the Electric Car? BCG, Jan 2009 Governments try to speed market migration towards electric cars through „Governments could …lose financial incentives such as subsidies, tax revenues when drivers taxes, investments. What will be the spend less money on impact of electric vehicles on tax gasoline … Will lawmakers …be willing to sacrifice tax revenue? receipts that pay for the upkeep of roads in order to help control climate change. If not, how will the tax burden be migrated to the new fuel: electricity?― - Electrifying cars. McKinsey Quartlerly 2009, Number 3 © Finpro ry / 11
  12. 12. ―Because they are not in the mainstream yet we may look at potentially a higher rating for these cars. Part Spillover Effects of the group rating … is the cost to repair the car. The cost of repairing an electric As electric car and battery industry take a or hybrid car could be center stage in plans for the future of higher because of the transport, this opens opportunities (and specialist technology they challenges) to adjacent industries. feature,‖ Norwich Union, Britain‘s biggest motor insurer. Lightweight construction of car parts and overall sustainable design are obvious examples. Other spillover effects on new value chains are not so clear: Who will own and operate charging stations? Could electrified cars lead to new revenue streams for utilities? Will insurers see electric vehicles as more risky initially? In the joined project, Vattenfall © Finpro ry provides charging infrastructure / 12
  13. 13. Not just Cars! When talking of electric vehicles, typically passenger cars are being discussed. But electric propulsion can also make sense for other vehicles, especially in an urban context. Cheap, green electric bikes are more popular than cars in China's crowded cities, helping to offset the country's pollution problems. Last year, Chinese bought 21 million e-bikes, compared with © Finpro ry 9.4 million autos. / 13
  14. 14. Multi-fuel Cars: Technology that will allow cars to run on petro, ethanol, bio diesel, hydrogen, R&D Wildcard natural gas or biomass based fuel is developed at the German Aerospace Center in Germany. The search for the best future transportation The various types of fuel are is going on. Hydrogen powered vehicles turned into electricity and the motor is in effect an electric motor. seem to have lost the competition: Ford and Nissan cancelled their hydrogen car plans and the U.S. Department of Energy has put BCG developed 3 scenarios the brakes on hydrogen fuel cell research. and found that ―internal Could other alternatives (such as compustion engines will advanced internal-combustion engines remain the dominant (ICE)) make battery powered vehicles technology in 2020 ―- Comeback of the Electric Car? BCG, Jan 2009 obsolete? Regarding batteries, R&D efforts are for instance concerned with storage and speed of charging. As lithium is difficult to recycle, also advances in recycling or alternative materials are needed. © Finpro ry / 14
  15. 15. Alternatives to Ownership As many consumers are less interested in owning products but more in using them, alternative ownership models Vancity—Canada's largest are gaining in popularity, especially in credit union (!)—kicked off the field of transport: car sharing, bike their free Bike Share program sharing and even boat sharing programs in summer 2007 and has since can be seen, with very different business got a lot of positive feedback. models (e.g. community ownership; or company remains owner but sells usage time). Similar service models are also Sunlabob Rural Energy (Laos) is renting solar panels to used for instance in solar technology. communities and solar Likewise, innovative business models powered lanterns to could make electric vehicles affordable individuals. per use. © Finpro ry / 15
  16. 16. Sustainable mobility is at the Do-it-Yourself heart of the motivation behind c,mm,n (pronounced "common"), an initiative from the Dutch Society for Nature With collaboration and empowerment and Environment along with becoming a way of life it is little wonder that 3 universities. Aiming to we see crowdsourcing /open source car provide an open source model for cars in the year projects also in the terrain of electric cars. 2020, the first collaboratively Enthusiastic users hope to be able to designed prototype car was develop more innovative and less expensive debuted recently at cars – ideally with support from carmakers. Amsterdam's AutoRAI 2009 car show. Similar developments can be seen in relation to energy: As energy prices become more noticable in people‗s budgets, consumer generated energy becomes an interesting alternative. The influence on electric vehicle market remains yet to be seen. © Finpro ry / 16
  17. 17. Electric cars emit gases indirectly if they use widely available power from fossil fuel electric plants which burn coal, natural gas and petroleum .- More radical, please! International Business Times, Feb 2009 „If you want a cheap Despite the enthusiasm of governments way to be fuel and many consumers, whether electric efficient, buy a car cars can fulfill the promise of being an that‗s half the size. environmentally friendly transportation is Hybrids cannot not certain. If involved industries cannot compete with that.― – BCG consultant Xavier Mosquet address these issues convincingly and in interview, Mar 2009 with a holistic concept of sustainable design, investments may turn into losses. „(B)atteries at the end of their lives may be ―If we accept the ―cradle to cradle‖ liabilities, not assets, philosophy, there‘s no reason there should be because of their recycling any garbage at all. No waste. Living systems, costs.―– - Electrifying cars. McKinsey Quartlerly 2009/3 ecosystems, don‘t waste.‖ – Justin Podur, Canadian activist, Apr 2008 © Finpro ry / 17
  18. 18. Contact Markku Vantunen – Foresight Process markku.vantunen@finpro.fi 00358 40 3433407 Ines Seidel – Foresight Projects ines.seidel@finpro.fi 0049 8954264731 © Finpro ry / 18