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What the Auto Industry is Grappling with (Pt. 2): Electric Vehicles

Last week we took a quick look at driverless vehicles. This week we’ll review the evolving automotive powertrain.

While it would be easy to look at Tesla and what that company has done to generate interest in battery-powered vehicles, that’s not what I’m out to do here. Tesla was not the first to offer an electric vehicle (EV), or the second. What they did do is develop a compelling and interesting product, generate significant hype, and initiated a competitive market reaction.

Oversimplifying a bit, sure, but let’s move on.

But first, some background. The electrification of personal transportation can take many different flavours. When hybrids first came to market, one of the key messages I had to deliver was that you didn’t have to plug them in. At the time, it was explained to me that this was a common misunderstanding (which seems quaint now), or at least one that needed to be often communicated.

Today, there are a range of options, but I’m going to focus on the vehicles that use only electricity to move down the road and emit zero tailpipe emissions. There are two main categories: battery electric and hydrogen fuel cell electric (I covered this here). Electric vehicles are both compelling and challenging for consumers, auto makers, and governments. They also, like most things, generate healthy populations of supporters and detractors that plant their flag on the type of electric powertrain they believe will dominate, if they believe that will happen at all.

To be clear: I like electric vehicles and see a role for both battery electric and fuel cell powertrains in our broader transportation system by virtue of the advantages and disadvantages the technologies display in their current form. Ultimately, the market with decide if VHS or Beta will win (or Blue Ray vs. HD DVD, if you prefer) a spot in your driveway.

Having said that, here are a couple of the bigger issues facing automakers in the electrical vehicle space that I find most interesting:

Why aren’t there more electric cars on the road?

While they hit above their weight class in terms of media coverage and chatter, there are only a small number of electric vehicles on the road, accounting for about two of every 100 vehicles sold globally. That figure ranges by country with places like Norway, with significant incentives on offer, at the forefront.

More are coming, but it’s not entirely clear how quickly, and sales are certainly growing. Most automakers are working on new electric vehicles, but there isn’t consensus on the approach

They’re also expensive (although Tesla has been able to occasionally generate some quarterly profits). Developing a new vehicle can cost automakers billions - with a “B” - of dollars, and that’s when they’re leveraging existing technology like the internal combustion engine. This is why you see companies crossing traditional competitive battle grounds to form partnerships.

Could we transition to electric cars tomorrow?

Before that happens, we will need to sort-out the infrastructure question. If you’ve ever plugged too many electrical devices into a power outlet in your home and blown a fuse or circuit breaker, that’s an oversimplification of what could happen to your neighbourhood power grid if everyone on your street tried to recharge their battery electric vehicles at the same time. That’s assuming you live somewhere that can enable home charging. Still, if you’ve ever been late for an appointment only to notice your gas tank is nearly empty, always having a fully-charged vehicle by virtue of at-home charging is appealing.

However, electrical utilities will need to be ready for EVs by upgrading the grid and encouraging people to charge when demand for power is lower. Thankfully, research is being done now so there’s data to be able to make long term decisions about how to prepare publicly-owned infrastructure.

Similarly, hydrogen vehicles will need to be supported through investment in infrastructure, with many options are on the table. While generating, storing, and transporting pure hydrogen admittedly adds another step in the supply chain relative to battery electric vehicles, one of the advantages of hydrogen is that it could leverage existing gas stations to serve the public. Further, in places where there already is surplus electricity, like in Ontario where i live, producing hydrogen could be a way to normalize power demand and make better use of public assets.

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What I left off the table here are things like incentives (where political perspective can influence opinion), zero emissions regulations (same reason), and the profitability of the technology (they’re supposedly not but costs are expected to come down). Perhaps those are topics to examine at another time.

Next week, we look at the evolving customer purchase and ownership experience.

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