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Cleantech matters: Electric vehicles are moving into the fast lane - EY - Global

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Key unanswered questions

  • Will consumers pay for fast charging, given the necessary price premium?


  • Who will own, manage and control the various technologies in the EV ecosystem — the EV maker, the utility, the charging-station operator or the infrastructure builder?


  • What realistic improvements can we expect in battery life and miles per charge?


  • What should the role of government be in promoting EV development and adoption?


  • How should the industry in China tackle the consumer market?


  • The Chinese Government is expected to spur development of the local EV market over the next three to five years. What is the role of the multinational in China in this environment?


  • How can infrastructure investments be scaled to match the pace of EV adoption?

Surprises in transportation electrification in the US

EY-Surprises in transportation electrification in the US

The EV business is no longer theoretical and new entrants from industries ranging from big box retailers to software makers to real estate companies and shopping centers are stepping in.

Electric vehicles are moving into the fast lane

Over the last year they’ve gone from lofty aspirations to wheels on the street, with new models enthusiastically received by early-adopting consumers. The EV business is no longer theoretical.

Seeing the opportunity, manufacturers, utilities and service providers are forming unconventional alliances. They’re creating new business models to supply complementary services.

New entrants from industries ranging from big box retailers to software makers to real estate companies and shopping centers are stepping in.

Recent industry milestones include:

  • The launches of the Nissan Leaf and Chevy Volt and a growing pipeline of nearly 30 announced EV models to come by 2016
  • GE’s plans to acquire 25,000 EVs for its corporate fleet
  • The UK launching the world’s first nationwide roadside charging network
  • Better Place opening Europe’s first battery-swapping station
  • Germany setting a goal of 1 million electric vehicles on the road by 2020, supported by substantial additional research funding
  • Accelerating deployment of 14,000 public charging stations by Project EV in the US

But many uncertainties and risks remain for the seamless delivery and operation of reasonably priced EVs and chargers needed to ensure continuing market growth:

  • Product scarcity
  • High EV prices
  • Sometimes complex subsidy and permitting processes
  • Infrastructure gaps
  • Insufficient coordination between original equipment manufacturers (OEMs) and power providers
  • Issues related to battery performance, price and residual value

Co-hosted by Bloomberg New Energy Finance and supported by the Climate Group and the China Business Review, our Global Cleantech Center convened a diverse group of stakeholders in Ignition Sessions in Bonn, Detroit and Beijing to explore real-world issues facing the fleet, consumer and infrastructure segments for actionable ideas on how to build a sustainable EV ecosystem and market.

The ignition sessions revealed the following insights:


Ignition Session discussion

The defining moment has arrived. Growing numbers of consumers are becoming EV drivers.

Public perception lags EV reality. A major challenge to EV adoption is simply convincing consumers that they are “real” cars that can meet their needs — today.

The industry needs an “easy button.” The industry’s need for an “easy button”— one that puts all the pieces together for individual consumers and corporate fleet managers alike (i.e., education, incentives, financing, vehicle options, charging access and installed power supply) will require innovative partnering, business models and financing.

The market needs more EVs. The lack of EVs in terms of quantity and model diversity is a major barrier to EV adoption. Demand for EVs outstrips supply, and EVs are generally scarce. For consumers, this makes just getting behind the wheel of an EV a challenge, let alone purchasing one.

Up-front costs are still too high. While the price differential will diminish with large-scale EV production, the incentives designed to facilitate mass adoption are often insufficient. The lifetime cost benefits of EVs — fuel at a fraction of the cost of petroleum, significantly less maintenance — have not been well-communicated to the potential consumer base.

The question of residual battery values is not a barrier. The potential for a secondary market for used EV battery packs remains unclear, and one may not emerge for years, if at all, yet financing solutions dependent on future battery values are needed today. New leasing mechanisms are being designed to support EV financing while protecting end users from strong depreciation.

A mobility concept is gaining momentum. The global conversation is evolving from “just individual EV ownership” to a mobility solution concept, where transit choices are linked to provide options to get from point A to point B. Some OEMs and vehicle-sharing businesses see the mobility concept as part of their overall EV offering — allowing customers to alternate their vehicle platform to match their usage — and helping to avoid the range anxiety issue.

More cross-sectoral collaboration is needed. This is so particularly between OEMs and power providers, to enable synchronized, efficient and effective EV rollouts. Utilities need to be given proper incentives to make the appropriate investment in EV enablement, while their regulators must allow them to test demand and grid impact and gauge new business models in their communities.

 Key unanswered questions



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