5 minute read 8 Sep 2021
Electric car lead plugged into an electric car at home

The five focus areas to accelerate eMobility growth

By Randall Miller

EY Global Advanced Manufacturing & Mobility Leader

Passionate about manufacturing, mobility and disruption. Champion for women and diversity & inclusiveness in the Advanced Manufacturing & Mobility industries.

5 minute read 8 Sep 2021

Electric vehicles will be a critical element in any vision of a sustainable future. Here’s how to make eMobility a reality.

In brief
  • Effectively transitioning to electrified transport requires a fundamental shift in thinking on value propositions and business models across multiple sectors.
  • Key challenges revolve around infrastructure, customers, ROI, supply chains and delivering on eMobility’s promise of greater sustainability.
  • Organizations in the rapidly evolving eMobility ecosystem must be strategically nimble approach and collaborate to share risk and capitalize on opportunities.

To build a sustainable world, organizations in every industry must change the way they work. Legacy industries must evolve, and new industries must be created that deliver new sustainable products and services and build long-term financial and societal value. Industries, investors and governments must work more closely together to support, incentivize and reward the visionaries who are thinking big, committing early and moving fast.

The emerging eMobility ecosystem is a case in point. The electrification of road transport represents the most radical transformation in mobility since the introduction of the internal combustion engine (ICE) in the early 19th century. As a consequence, the way the world works is being turned on its head.

The potential gains for business and society are vast. Electrification offers local and national governments an opportunity to make transportation more sustainable and improve their citizens’ lives, with cleaner roads and redesigned electric vehicle (EV)-friendly cities. Automotive companies have a chance to transform their own businesses and reimagine their entire supply chains. And in the power and utilities sector, there is potential growth not just in the volume of electricity sold but also in associated EV products and services.

But as new entrants scale and sector boundaries blur, legacy players – from vehicle manufacturers to power and utilities companies, fuel suppliers to governments – must adapt to thrive.

This is too substantial a change to society for any one industry to be able to tackle the challenge alone – which means players will need to fundamentally rethink their strategies and business models to successfully reframe their future within the new ecosystem. Organizations are learning that they must collaborate to share risk and capitalize on growth opportunities.

For companies on their eMobility journey, we have identified five key challenges threatening to slow the rise of electrified transport – and how to overcome them.

1. Electrifying infrastructure

The challenge: Deploying new eMobility infrastructure represents an enormous logistical challenge. It must be both sufficient and efficient, designed and deployed in a way that anticipates consumer demand and generates returns on investment – without risking existing assets.

The solution: A smarter, more adaptable grid will facilitate the growth of the eMobility sector, while innovations such as vehicle-to-grid storage will help manage variable load. Organizations must collaborate on structure, planning and execution to roll out the fast-charging infrastructure required. Data and insights can inform where and how to build, but this requires technology platforms and back-office operations that are fit for purpose in the new eMobility ecosystem.

2. Winning customers

The challenge: Whether individuals or fleet owners, customers want value for their money and ease of use, from brands they trust. Individuals want an EV that is also a smart device, while fleet owners need logistical help to transition from internal combustion engine (ICE) vehicles.

The solution: Companies and regulators should work together to create common standards and platforms to engage with customers. This would facilitate an integrated eMobility experience that seamlessly connects the vehicle to charging infrastructure, adds value for the customer and helps manage the costs of ownership.

3. Driving returns

The challenge: In a rapidly changing market, organizations need to find ways to raise capital, minimize risk and deliver growth from eMobility over both the short and long term.

The solution: Financial modeling can cut through the complexity to identify the best opportunities in the emerging eMobility ecosystem. To boost return on investment, organizations should take advantage of tax breaks and incentives, use innovative financial structuring such as fractional ownership, and find ways to spread the costs of investment over time.

4. Linking the supply chain

The challenge: EVs require new raw materials, new components and new standards, especially for batteries and fast-charging infrastructure. It is essential for the new eMobility supply chain to be effectively integrated and resistant to disruptions.

The solution: Shortages and bottlenecks must be addressed, especially in raw material extraction and processing. Standardization will help lower the costs of research and development as well as production. And by collaborating, organizations can design a supply chain that is efficient, robust and profitable for all.

5. Advancing sustainability

The challenge: Citizens and consumers expect both governments and businesses to help make progress toward lower-carbon mobility. Vehicle availability must be matched by infrastructure rollout and vice versa. “The pressure from consumers and from regulators is not going away. And those that have done the work and are prepared, and have electrified their operations, are here to survive,” said David Borland, EY UK&I Automotive Leader.

The solution: Alone, neither sustainability regulation nor innovation from business is enough. To help minimize the environmental impact of transportation, governments and companies must align on regulatory frameworks and policy goals. In this way, they can deliver an eMobility ecosystem that benefits the whole of society.

The pressure from consumers and from regulators is not going away. And those that have done the work and are prepared, and have electrified their operations, are here to survive.
David Borland
EY UK&I Automotive Leader

The acceleration toward eMobility is being driven by a multitude of factors, including climate change, the COVID-19 pandemic, shareholder activists, changing government policy and consumer demand. No one should underestimate the scale of the challenge, but what is clear is that those who don’t act fast enough now will find it impossible to act later. Finance, talent and opportunities are already gravitating toward businesses that are building a sustainable future, not clinging to an unsustainable past.

Summary

Electrification in mobility is gathering pace, demanding the reinvention of strategies, operating models and supply chains across multiple sectors. The challenges are too big for one sector to solve alone. Only through collaboration can organizations thrive in the emerging eMobility ecosystem, win customers, and drive returns while advancing sustainability in transport.

About this article

By Randall Miller

EY Global Advanced Manufacturing & Mobility Leader

Passionate about manufacturing, mobility and disruption. Champion for women and diversity & inclusiveness in the Advanced Manufacturing & Mobility industries.