EVs: An evolving market segment finally comes of age
Auto industry readies for mass-market EV growth in 2020s
A decade after the December 2010 launch of the Nissan Leaf, "electric cars" (both battery electric vehicles and plug-in hybrids) continue to draw a disproportionate amount of media attention. But it's fair to suggest that 2010-2019 will be seen as the first era of EVs, while the 2020s will be the decade in which electric cars enter the mass market in noticeable numbers.
Three major factors are driving the wave of electric car introductions and propelling the industry rapidly along an electrified path.
First was the September 2017 news that China plans to set a date after which no sales of new vehicles with combustion engines will be permitted. Released in official state media, the story was little noticed outside the auto industry. But while it didn't set a date − and the country still hadn't released any regulations to that effect by 2019 − it pointed the direction to the future of the world’s largest auto market. Global automakers took notice.
To be fair, the EU's continuing efforts to reduce wells-to-wheels carbon emissions from vehicles, in light of steadily worsening news about the global impact of climate change, would have required at minimum lots of plug-in hybrids − at least under the lenient and unrealistic NEDC test regime. That has now been replaced with far tougher WLTP tests in the wake of the diesel scandals, making plug-in hybrids look rather less appealing as a cost-effective way to cut CO2.
Second is the continued decline in lithium-ion cell costs, at rates far faster than anticipated even in 2010. One noted global investment bank has reduced its cost projections for Li-ion cells three times since 2008, and the holy grail of US$100 per kWh now seems highly achievable by 2025 − and perhaps a few years sooner for certain makers.
Germans come round
Third and last factor is the radical change in outlook within the German auto industry. After much resistance, German makers have come firmly around to supporting electric cars in the wake of the VW diesel emission scandal. The country's largest automaker, VW Group, intends to become the world's maker of mass-priced battery-electric cars with ranges of at least 200 miles. It plans to build more than 1 million cars a year on its MEB architecture by 2025, under its multiple brands. Volkswagen says its 1D.3 − to be shown at the Frankfurt Show in September − follows the Beetle and the Golf to introduce the third major chapter of strategic importance for the history of the brand. 'ID' stands for intelligent design, identity and visionary technologies.
VW will be competing with the Nissan-Renault-Mitsubishi alliance, which collectively launched six separate electric vehicles in the light-duty passenger and commercial sectors from 2011 through 2018. The alliance crossed total production of 400,000 battery-electric vehicles in early 2017, and the 400,000th Nissan Leaf alone will be delivered in early 2019.
With a dedicated shared architecture to roll out starting in 2020 across all three brands and more than a dozen vehicles, the three companies will compete directly with VW Group for BEV volume laurels.
Together, these three factors ensure that the number of plug-in electric vehicles to be built starting in 2020 will soar. And it's clearer than ever that, aside from China, those cars will largely be built by existing OEMs along with Tesla, probably.
The days when the image of electric cars was small, flimsy, and unsafe − “glorified golf carts,'' as more than one auto writer dismissed them in years past − have vanished into the rear-view mirror with the success of the Tesla Model S. Now, electric cars with rated ranges of more than 200 miles are simply expected to meet all safety regulations and offer consumer amenities equal to standard cars in their segment.
The number of entries has soared since 2016, with new and relatively affordable battery-electric entries from Chevrolet, Hyundai, Kia, and more in the mass segment, and luxury BEVs from Audi, BMW, Jaguar, and Mercedes-Benz on the market by the end of 2020. No longer is the universe confined to the Nissan Leaf, Tesla Model S, and Renault Zoe.
The days when the image of electric cars was small, flimsy, and vehicles − “glorified golf carts,'' as more than one auto writer dismissed them in years past − have vanished into the rear-view mirror with the success of the Tesla Model S.
Basic definitions: battery-electric vehicle (BEV)
Pure battery electric vehicles, or BEVs, store energy in a lithium-ion battery pack sized from 24 to 110kWh, powering one or more electric motors that provide torque to the wheels. In dispensing with the combustion engine and its associated mechanical drivetrain, BEVs radically reduce the complexity and parts count of a typical vehicle, while offering designers new opportunities in both structure and packaging.
The typical range for first-generation B- and C-segment BEVs was 50 to 100 miles (80 to 160km), which proved to raise fears of the dreaded 'range anxiety' among buyers, especially in North America. Updates and new entries from 2016 through 2019 boosted those ranges to 105 to 240mi.
This evolution was heavily spurred by the January 2015 announcement of the Chevrolet Bolt EV, a C-segment BEV with 238mi. of range that went on sale in December 2016 for a price of US$37,500 before incentives. It was followed by the July 2017 launch of the Tesla Model 3, of which more than 140,000 had been sold by the end of 2018.
Basic definitions: plug-in hybrid and range-extended EV
For much of the 2010s, the expected way for OEMs to alleviate buyer range anxiety was the broad grouping of plug-in hybrids. They include both the extended-range electric vehicle, or E-REV, and the more common parallel plug-in hybrids, or PHEVs. Both types use a smaller battery pack than a BEV, perhaps 8 to 33 kWh, that offers 25 to 90mi. of range, backstopped by a combustion engine and fuel tank for uninterrupted longer journeys.
The difference between the two types is that in a conventional PHEV, the car may or may not operate on electric power alone as its battery discharges. But once battery range is depleted, the engine clutches into the drivetrain to join the electric motor in providing power and recharging the battery. In an EREV, however, the engine serves solely to turn a generator that provides current to the electric motor(s) that power the wheels. It does not mechanically drive the wheels, and so the engine-generator set can be highly optimized for maximum output within a limited rev range while minimizing fuel consumption and emissions.
These designs offer range comparable to a combustion-engined car, which the first generation of mass-market BEVs simply couldn't do with the high cost of batteries. But the gain in range comes with a cost: plug-in hybrids carry the complexity and expense of a second powertrain − the combustion engine and all its plumbing and fuelling—that is only sometimes used by drivers. The highest-volume PHEVs are the Chevrolet Volt (two generations), the Toyota Prius Plug-In Hybrid (1st-generation) and Prius Prime (2nd-generation), and the BMW i3 REx.
Mitsubishi Motors has had much market success with its Outlander PHEV, which has achieved 200,000 global sales since introduction in 2013
Outlook for the 2020s: BEVs dominate?
Over the first 10 years of electric-car production, plug-in hybrids were seen as the higher-volume and more practical alternative to battery-electric vehicles. The cost of long-range battery packs to alleviate range anxiety was simply too high. Ten years on, with increasingly stringent emission reduction rules in the EU and China's anticipated ban on ICE vehicle sales at some point, BEVs are increasingly seen as the inevitable future.
In part, that's because major OEMs, especially in North America, have proven utterly unable to explain the benefits of plug-in hybrids to shoppers beyond early-adopter EV aficionados. Hybrids are understood, and battery-electric cars are understood, but a hybrid that's also an electric car requires more explanation than most dealer staff care to attempt. It can be viewed as an engineer's solution to a regulatory problem, rather than a concept that inherently attracts real-world vehicle shoppers with instantly graspable benefits.
While European makers especially are moving toward PHEV versions of all mass models, increasingly they expect the plug-in hybrid to be a transitional technology. Ultimately, and almost certainly by 2030, it will give way to pure battery-electric vehicles as costs for batteries that deliver 200 or 250 miles of range fall to today’s mass-market prices.
The marketing question
As carmakers tool up for higher volumes of electric cars, they will also have to figure out how to sell them. The secret may lie in touting not their environmental benefits, or low operating cost, but simply the better driving experience against cars with combustion engines. Simply put, they are quiet, smooth, and torquey. And the supposed reluctance of drivers to plug in their car will likely fall to the reality of a world of car buyers who plug in their mobile phones nightly without a second thought.
While public fast-charge infrastructure is not yet sufficiently ubiquitous to offer drivers confidence on longer trips, Europe and North America are now seeing aggressive efforts to provide charging sites that operate at 150 kw and even the upcoming 350 kw. The problem of overnight charging for the many drivers who live in multiple dwellings rather than private homes remains, but the future is coming into focus.
That future includes millions of battery-electric vehicles, and it is now more visibly in focus than it was in 2010. The 2020s promise to be even richer for electric cars than the 2010s were expected to be.