Utility Point of View - Gord Reynolds

1. Automotive the way we see it
Electric Vehicles:
A Force for the Future
Collaboration – Inside and Outside the Automotive
Industry – Will Be Key to Electric Vehicle Development

2. The growth of electric-
powered vehicles will
lead to a fundamental
shift in the existing
landscape in areas such
as design and
manufacturing,
distribution and
aftersales service, and
energy supply and
infrastructure.
But most importantly, electric vehicle
development is being strongly fueled
by consumer demand stemming from
economic and environmental factors.
In Capgemini’s Cars Online 09/10
study, 41% of consumers said they
currently own a fuel-efficient and/or
alternative-fuel vehicle, up from 36%
the prior year. And another 30% said
they plan to buy a fuel-efficient and/or
alternative-fuel vehicle.
Hybrids Lead the Way
Electric vehicles, particularly hybrid
gas/electric cars, are the most
commercially mature and viable of the
various kinds of alternative vehicles
and have demonstrated the potential
to reduce fuel consumption and
exhaust emission. Gas/electric hybrids
are the primary type of alternative-fuel
vehicle that consumers currently own
or plan to buy.5
Hybrid electric vehicles still represent
only a small share of overall car sales
– estimated at about 1% in Europe
and 2% in the U.S. Sales of hybrid
cars, like all vehicles, have suffered
recently. Nevertheless, future demand
is expected to grow, particularly in the
U.S. and Japan, as prices of hybrid
and other types of electric vehicles
begin to drop.
By some estimates, global sales of
hybrid electric vehicles may surge at a
compound annual growth rate as high
as 12% over the next few years.
Developing markets like Brazil, India
and China are also expected to
contribute to this growth as they put
more focus on environmental issues
such as CO2 reduction.
1
‘‘The electrification of the automobile is inevitable.
’’— Bob Lutz, Vice Chairman, General Motors1
Bob Lutz is not the only one who sees
a bright future for electric cars. Most
of the major automotive manufacturers
– as well as new players like BYD and
Tesla – are investing heavily in electric
vehicle design and manufacturing.
Governments and other public sector
bodies from the U.S., France, the UK
and other countries are making
significant investments in the
development of electric vehicles and
introducing various tax credits, incentives
and subsidies. In France, for example,
the ministry of sustainable development
recently launched a national plan for
the development of electric vehicles
and rechargeable hybrids.
Energy companies and other
industries have also set their sights on
electric vehicles. ExxonMobil, for
example, is sponsoring an all-electric
car-sharing and rental program, called
AltCar, at the Maryland Science
Center in Baltimore.2
French utility
company EDF is working with car
maker Renault on a recharge system
enabling communication between
recharge terminals and electric
vehicles.3
In Germany, Renault and
RWE, a leading European gas and
electric company, have partnered to
create a common transport and
recharge system for electric vehicles.
The U.S. Postal Service is studying the
feasibility of moving its fleet of
146,000 delivery vehicles to electric
vehicles.4
And consortia combining
different groups are working together
in countries like Israel and Portugal to
test various integrated models.
1 “Bob Lutz: The Man Who Revived the Electric Car,” http://www.newsweek.com/id/81580
2 “Exxon and Electrovaya Launch Car Program in Baltimore,” http://www.businesswire.com/portal/site/home/email/alert/?ndmViewId=news_view&newsLang=en&newsId=20090623005671
3 http://press.edf.com/the-edf-group/press/press-releases/noeud-communiques-et-dossier-de-presse/renault-and-edf-strengthen-collaboration-on-zero-emission-electric-vehicle-602317.html
4 “U.S. Postal Service: Electrification of Delivery Vehicles,” http://www.uspsoig.gov/FOIA_files/DA-WP-09-001.pdf
5 Cars Online 09/10, Capgemini (study spans the U.S., Western Europe and the BRIC countries of Brazil, Russia, India and China), 2009

3. Electric Vehicles: A Force for the Future 2
Automotive the way we see it
Addressing the Challenges
Although there is considerable
interest in electric vehicles, a number
of challenges must be addressed if
widespread acceptance is to be
achieved.
Performance of batteries: The
industry must solve issues such as
low distance capability, recharging
duration, battery weight, short
lifecycle and the high cost of batteries.
Infrastructure investment: The
development of the electric vehicle
is dependent on the parallel
development of a recharging
infrastructure. The current low
distance capability and frequent
recharging necessitates a significant
number of charging points, which will
require considerable planning and
investment.
Market acceptance: Current electric
vehicles do not yet meet consumer
expectations regarding speed, power,
performance, recharging capability,
distance and, especially, price.
Price: Prices of new electric hybrid
vehicles have begun to drop
Global Hybrid Electric Vehicle Sales
Forecast
• Sales expected to surge at a CAGR of 12% during 2008-2015
• Hybrid car sales in the U.S. market are likely to cross 1 million by 2012
• Hybrid vehicle production in Japan is projected to hit a CAGR of 6.6% from 2008 to 2011
Number Sales
5,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009F 2010F 2020
20,000 30,000 55,000 110,000
195,000 230,000
390,000
700,000
1,090,000
1,600,000
2,100,000
3,750,000
Sales (Global)
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
Sources: Capgemini analysis; “Global Hybrid Car Market Forecast to 2010,” RNCOS
somewhat, but it is still early in the
cost-reduction curve. Government-
sponsored programs in the form of
both consumer credits/rebates and
battery development incentives
provide some cost relief. However, the
price gap between gas-powered and
electric vehicles will need to shrink if the
mass market is to accept electric cars.
Our Cars Online research found that
consumers show some willingness to
pay for improved fuel efficiency.
However, most are unwilling to pay a
premium of more than 10%.
The existence of other alternatives:
Electric cars are not the only
alternative-fuel vehicles on the
market. Other options like ethanol
and gasoline/ethanol flex-fuel vehicles
have grown in popularity in some
countries. For example, in Brazil, 22%
of consumers said they currently own
or plan to buy an ethanol or flex-fuel
car, the highest among the countries
surveyed in Cars Online.
Ecological value: While the general
perception is that electric vehicles are
more environmentally friendly than
those powered by combustion
engines, the actual ecological value is
questioned by some. For instance,
environmental concerns may be raised
if a vehicle consumes electricity from
a coal-fired plant. Other factors such
as the recycling of used batteries may
also impact the ecological equation.
Technological maturity: Electric
vehicles are a late entry into the
automotive market and, as such, the
standardization of components,
technology and test methods is not yet
mature.

4. 3
What Do We Mean by ‘Electric Vehicle’?
In a general sense, electric vehicles are powered by electricity to some degree or another.
However, there are a number of different types of electric vehicles, including but not
limited to:
■ Gasoline/electric hybrid vehicle: has both a gas and an electric motor, and is based
on two energy carriers: liquid and battery. A gasoline/electric hybrid vehicle typically has
a limited electric range. The electric propulsion can be mobilized for short urban trips,
but the true utility of the electrical energy is to serve as a boost for the gas engine. The
electricity is produced in the vehicle (recovery through regenerative braking); these
vehicles do not need to be recharged.
■ Rechargeable hybrid vehicle: also called a plug-in vehicle. This is a primarily electric
vehicle that also has a small combustion engine. Typically it can be used at 100%
electric power in the city with a distance capability per charge of approximately 50 km.
Electricity must be provided by the electric network grid. This type of vehicle does not
require complicated recharging terminals; existing electrical outlets in most public and
private parking areas may be sufficient.
■ Fully electric vehicle: 100% electric vehicle without any type of heat engine. A pure
electric vehicle requires prior creation of an infrastructure for recharging batteries.
Currently the distance capability per charge of a pure electric vehicle is still low (about
200 km) and the cost is high.
Despite these challenges, there is no
lack of investment in electric vehicles.
The continued volatility in oil prices,
growing focus on ecological issues
and the ongoing improvement of
technologies should lead to an
increasingly favorable environment
for electric vehicle sales.
Development Scenarios Will
Depend on a Range of Factors
The development scenarios for electric
vehicles will depend on technical,
political and energy considerations.
Capgemini expects two scenarios to
rise to the forefront over the next few
years:
Market specific: In this scenario,
electric vehicles will hold a
measurable market share in certain
regions and for specific uses (like
urban mobility, sport vehicles or
private company fleets). The technical
maturity will be present, however the
lack of consultation and cooperation
among market players in areas such as
infrastructure and standards will
adversely affect development on a
broader scale. In this scenario, the
development and dissemination of the
electric vehicle will occur through
specific segments such as commercial
fleets. In addition, a higher-income
socio-professional category of
consumers will help drive the
development of electric vehicles.
New model expansion: In this
scenario, electric vehicles will hold a
more substantial market share. The
social consensus and the organized
convergence of infrastructure and
standards will result in a strong and
lasting market for electric vehicles.
This scenario will be dominated by
new business models and a new
vision of vehicles and mobility.
“I think we will start seeing an awful lot more cars
available in electric form. And greater pressure will be put
on drivers to be more green aware.
”UK consumer, Cars Online 09/10

5. Electric Vehicles: A Force for the Future 4
Automotive the way we see it
We anticipate that the market-specific
scenario will be the most realistic path
for electric vehicles as it is more
evolutionary in nature. The new
model expansion scenario is more
revolutionary and would require the
convergence of all players around a
number of key dimensions, including
technology, infrastructure for recharging,
tax and regulation, evolution of users,
and the development of the
industrial/manufacturing capability.
This second scenario will only happen
if there is significant government
intervention in terms of subsidies and
investment, brought about by growing
concerns for the environment and for
long-term oil supplies.
Changing the Landscape
As these development scenarios play
out, the growth of electric vehicles
will raise a number of critical
questions:
■ Will traditional players (vehicle
manufacturers, suppliers, energy
Capgemini anticipates that electric vehicle
development scenarios B and D are the
most likely future models, with B being
the most realistic path.
Development Scenarios for Electric Vehicles
Scenarios
2020
A. Limbo B. Market Specific D. New Model
Expansion
C. Classic Expansion
Political
• 1% = 20,000
• <0.3% = 100,000
• The dynamic is
not built
• The technical
maturity is present
but the lack of
consultation and
cooperation has
adversely affected
the development
• The electric vehicle
has made such
progress that it
replaces the
gasoline vehicle
without great
change or modes of
mobility vehicles or
business model
• The social
consensus, the
organized
convergence of
infrastructure,
standards, regulated
and deregulated
operators trigger a
lasting market
• Progress of electric
vehicles
• Progress of gas
• Progress of electric
vehicles
• Progress of electric
vehicles
• Progress of electric
vehicles
• Price of energy • Price of energy • Price of energy
• Carbon tax
• Price of energy
• Carbon tax
• Some fleets and
Autolib* (e.g.)
• Fleets, Autolib,
cargo and urban
mobility, CSP**,
sport
• Open • New business
models, new vision
of vehicle, new
mobilities
• Owner • Owner
• Some urban public
terminal
• Owner
• Online standard
terminal network
• Vehicle to grid
• Owner
• Online standard
terminal network
• Vehicle to grid
• 5% = 100,000
• 1.7% = 500,000
• 15% = 300,000
• 5% = 1,500,000
• 15% = 300,000
• 5% = 1,500,000
Technical
Energy
Segments
Charge
Discharge
New vehicle, % market
share (e.g., France)
Electric vehicles % of
global market
Dynamic in 2020
Source: Capgemini
* Autolib (Automobile Liberté) is an electric car-sharing plan in Paris
** CSP = Socio-professional category of consumers with higher incomes
Dynamic in 2020: Arrows refer to “unchanged,” “changed” and “changed considerably”
Technical Scenarios 2020: Arrows refer to the degree of progress, with a greater number of arrows indicating greater progress
Energy Scenarios 2020: Arrows refer to the anticipated increase in energy prices, with a greater number of arrows indicating higher price increases

6. 5
companies) be able to maintain their
dominant positions?
■ Will new players be able to design
viable products and strategies to gain
market share?
■ Will new aftersales players design
and implement new business
models?
■ Can business – and potentially
government – define and develop
the standards and infrastructure
necessary to provide the power
supply for electric vehicles?
■ Can companies and governments
optimize the management of
electrical energy needs?
The answers to these questions will
underlie a fundamental shift in the
existing landscape in areas such as
design and manufacturing,
distribution and aftersales service, and
energy supply and infrastructure.
Traditional and new players will need
to consider the potential impact of
this emerging market on their
business.
Traditional manufacturers will need to
define their strategy for positioning
the different “clean” vehicle
technologies and rethink their design
and manufacturing capabilities as well
as their supply chain. Automotive
suppliers will need to adapt existing
products and develop new products to
suit electric vehicles, while new
suppliers with purpose-built products
will enter the market.
Traditional car dealers, service
providers and spare parts vendors will
need to adapt and transform their
activities to serve the electric vehicle
market. Gasoline and tanker
companies will need to manage the
transition to a new power source that
will reduce the traditional heart of
their business. And large utilities will
need to take into account the potential
impact on the grid, new rate
structures and new types of services.
At the same time, new players,
including vehicle and battery
manufacturers, will need to master the
technology development and
scalability needed to serve the mass
market. Mobility service providers and
car rental companies will also need to
adapt their business models for this
new market.
The development of a significant
market for electric vehicles will likely
give rise to the need for a new
network of charging points that could
include traditional gas/petrol stations
as well as other players with a large
number of physical locations. This
could include big fast-food operators
such as McDonald’s or retail chains
like Walmart.
Conclusion: Collaboration Is
Key to Electric Vehicle
Development
Electric vehicles have the potential to
be a market-changing force. However,
the continued development of this
business will require collaboration
both inside and, more importantly,
beyond the automotive industry.
Parties including vehicle
manufacturers, suppliers, dealers,
other retailers, consumers,
electric/utility companies and
governments must all be aligned.
Capgemini has the supporting tools
and methodologies to help bring
together these key stakeholders in the
emerging electric vehicle business, as
well as broad and proven experience
in automotive strategy, process,
infrastructure and retail. We use
proprietary approaches such as our
Accelerated Solutions Environment
(ASE) to harness high-performance
group creativity and collaboration to
achieve buy-in and build solutions in
record time, particularly relating to
emerging technologies and business
models. According to one vehicle
manufacturer, the ASE approach
helped the company “…achieve in
three days what would have taken four
years of NetMeetings and thousands of
PowerPoint slides to accomplish.”
“I will purchase an alternative-fuel car as I am very
concerned about the environment. But I hope that prices
will come down as it will encourage others to purchase
this type of vehicle as well.
”U.S. consumer, Cars Online 09/10

7. Automotive the way we see it
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© 2009 Capgemini. All Rights Reserved. No part of this document may be modified, deleted
or expanded by any process or means without prior written permission from Capgemini.
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and perform through technologies.
Capgemini provides its clients with
insights and capabilities that boost their
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through a unique way of working, the
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. The
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called Rightshore®
, which aims to get the
right balance of the best talent from
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to create and deliver the optimum
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employs 90,000 people worldwide.
More information is available at
www.capgemini.com
About Capgemini and the
Collaborative Business Experience
Gord Reynolds
Practice Leader
Smart Energy Services
gord.reynolds@capgemini.com
+1 416.732.2200