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The moment of truth for transportation electrification

Recommendations: mobilizing toward an EV future

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The road ahead in transportation electrification in China

The road ahead in transportation electrification in China

Electric cars are rolling off production lines and onto our highways, with global hybrid, plug-in and battery-electric vehicle production set to triple to nearly 5 million by 2016. Are you ready?

Road Ahead in EV

Three geographically diverse groups of stakeholders came together this year in Bonn, Detroit and Beijing to discuss progress, problems and opportunities as EVs leave plants for dealerships. Our analysis of the debate and points of view shared in these sessions lead us to make the following recommendations:

Supply more vehicle volumes and variety. The EV market needs breadth and depth to move beyond early adopters. At the consumer level, this will help to ensure that buyers can find an EV model in the class of vehicle they are looking for — an SUV driver is not likely to buy a subcompact — especially if that purchase requires being placed on a waiting list. For fleet managers, this means being able to purchase the right vehicle for service needs in volumes that make economic sense.

Create infrastructure standards and protocols to accelerate business model development. Today’s proprietary systems are too costly. Government and industry must work closely together to develop and adopt common standards, such as the EU automakers’ agreement on plug standardization and software specifications. The lack of platform standards is inhibiting the rollout of broad-based solutions.

Create the easy button. Offer a seamless way to finance electric vehicles and have chargers ordered, permitted and installed, and the world will beat a path to your door. A patchwork of regional incentives and permitting requirements is deterring prospective buyers from pulling the trigger. Entrepreneurial companies that streamline a time-consuming and unwieldy process will help push those watching and waiting into EV seats, whether consumers or fleet drivers. Achieving this will likely require forging creative partnerships up and down the value chain.

Provide the total customer experience. A seamless system for financing, purchasing, fuelling and servicing has grown up around ICE vehicles over the past 100 years. The total customer experience must be offered to EV drivers too, and faster, to enable adoption.

Create an "iCar." The electrification of transportation brings the automobile one step closer to being a consumer appliance. Marry EV technology with compelling industrial design and a revolutionary interface to create a vehicle mass consumer appeal — call it an “iCar.” Consumers are willing to pay more for cool and will become evangelists for cool products.

Solve the residual battery value riddle. An industry-level effort involving OEMs, researchers, utilities and entrepreneurs is needed to facilitate baseline projections for residual battery values. This could involve the creation of design standards to enable today’s heterogeneous and purpose-built batteries to be packaged together for new uses or materially recharged (akin to printer cartridges) for reuse.

Educate the general public. Beyond industry stakeholders and early adopter enthusiasts, few people understand the true state of EV development. OEMs, governments and industry associations must develop communication strategies to increase mainstream consumer awareness and address misconceptions about EV technology. As long as the majority of consumers consider the EV to be tomorrow’s technology, it will remain so.

Incentivize fleet adoption effectively. Corporate fleet managers are the ideal early adopters of EVs, given the predictability of fleet routes, the total cost of ownership advantages of EVs and the intangible corporate benefits of driving electric vehicles. The higher up-front costs of EVs are a barrier, however, and government incentives for fleet adoption, if they exist, are often aimed at corporate taxes with minimal impact. Fleet managers need incentives that reduce the price of EVs at sale so that they can make a business case for choosing them over ICE alternatives.

Think differently. The systems, infrastructure and business models designed to support ICEs have developed over a hundred years — the assumptions and modes of thinking that accompany them are hard to escape. With the advent of EVs, now is the time to take a fresh perspective on the automobile, whether it is placing it in the context of a mobility concept, thinking about new business models or welcoming new players into the EV ecosystem.

Engage the whole ecosystem. As one participant observed, “This is the starting stage of a long journey, and the market needs people from different parts of the ecosystem to work together.” At this critical stage for the EV industry, OEMs, integrators, battery makers, utilities and infrastructure developers must work together to bridge gaps in the value chain and forge creative partnerships to create a sustainable EV ecosystem.

Collaborate across borders. EV trials and production are taking place around the globe. Sharing experiences and lessons learned will benefit the entire industry; so will finding opportunities for partnerships based on comparative advantage.

Closing exercise: what does the EV industry need to achieve to ensure continued market growth?

Participants in each of the three Ignition sessions were asked to suggest, and then vote on, the milestone or action items that the EV industry needs to achieve in the next 12-24 months to ensure continued market growth. Below is a comparison of the top three areas of needed progress identified in Bonn, Detroit and Beijing:

  1. A greater volume of EV production and more diversity in vehicle available vehicle types.
  2. Agreed upon standards and protocols for charging infrastructure
  3. CO2 emissions standards for OEM fleets in the major markets (US, EU, China).
  1. Make more EVs available, both in production numbers and diversity of vehicle types.
  2. Successful performance of installed batteries and continuing performance improvements.
  3. Streamline installation of residential EV chargers.
  1. Consensus between OEMs, component providers, power companies and users on EV infrastructure.
  2. Widespread adoption of EV technology in public transportation.
  3. Increase awareness among consumers of EV performance capabilities and reliability.

Among the groups, two areas of commonality can be seen: 1) the need to increase the volume and model diversity of current EV production; and 2) the need to accelerate EV infrastructure deployment, whether through the creation of industry standards and consensus or through improved processes for residential consumers.

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