Rapid cost reductions and performance improvements in battery and electronic technologies are changing the electromobility landscape and potential: a European view

The rapid development we have seen in the last years in the area of electric and autonomous vehicles is strongly linked to the rapid pace of innovations in ICT (in-circuit tests) and electronics.

In the last few years, alternative vehicle technologies have shown an exponential growth in sales and maturity with a significant decrease in cost. This is especially the case for electric vehicles and their components (batteries, fuel cells, range extenders or plug-in hybrids). These trends also apply to the development of autonomous vehicles.

The rapid development we have seen in the last years in the area of electric and autonomous vehicles is strongly linked to the rapid pace of innovations in ICT (in-circuit tests) and electronics. The improvement in (lithium) battery capacity has been an important factor for the emergence of electric vehicles. Autonomous vehicles were hardly on policymakers’ and most other stakeholders’ radar a few years ago but now they seem to offer great possibilities in the medium and even in the short term. This brings incredible opportunities in terms of city development and vehicle use. For example, we could soon have vehicles on demand, autonomous parking and charging, efficient delivery vehicle and car sharing plans just to list a few. Autonomous technology has the potential to drastically reduce the number of car accidents (Volvo has clearly made statements to that effect and 2020 is their target year). This in turn impacts the way we will design, use and safety test vehicles. Electric autonomous cars will be completely different products than the current ICE vehicles (to name the two extremes) with different supply chains and all this will probably occur within the next decade. The European Union needs to be prepared for these scenarios as they will impact consumers, employment, industry and society as a whole (an update of the WP for Transport should include this).

It is often stated that the electric vehicle market is stagnant. In 2014, about 95.000 EVs were sold in the EU-EFTA (European Union and Economic Free Trade Association) region, bringing the total to 200.000 EVs on the road. The growth rate was 50% overall and 70% for the pure electric vehicles. Although the market share for EVs in 2014 was still below 1%, the growth rate is very high. If this growth rate is sustained, by 2025, all passenger cars in the EU-EFTA region would be electric. In Norway, the market penetration at this moment is above 20% and in one region even an incredible 40%. However, electric vehicles are still too expensive and incentives are still needed. Furthermore, more EV car models are required as many segments do not have electric alternatives. It should be realized that the market is in its very early stages and that the current EV buyers are still the early adopters. Several OEMs state that EV customer satisfaction is the highest they have seen for any of their products.Estimates_0f_costs

EV battery costs are projected to go down from € 1,000 per kWh in 2010 to € 200 per kWh in 2020. And even this figure is now being challenged. A recent academic study comparing 80 different cost estimates with actual prices has demonstrated that past projections on battery price reductions have all been too pessimistic and the actual cost reduction is faster than predicted (ref 1). On top of this, due to the light weight and better performances of electric vehicles less kWh per km are needed. For example, Bosch has stated that by 2020 45% less kWh per km will be required than in 2010. The USA EV Everywhere Program has similar projections. The cost of EV technology is being reduced at a much faster rate than projected. At the same time the range of EVs is improving, with several models having a range exceeding 300km coming on the market in the USA in 2016 and 2017 at prices around $35.000 (the GM Bolt, the Tesla model 3 and, possibly, the Nissan LEAF). EVs are already cost competitive with ICE vehicles in many instances and AVERE projects that within the next 5 to 10 years EVs this will be the case most of the time, making EVs the vehicle of choice. To illustrate the silent revolution which has taken place since the conception of the WP for Transport, in 2010 there were about 1,000 EVs on the road in the EU+EFTA region with the Think and the Mitsubishi i-Miev as top sellers. In 2014, the number of EVs on the road has risen to 200.000 with top sellers being the Nissan LEAF (second generation), Tesla Model S and the BMW i3. Electric cars use 1/3 of the energy of ICE vehicles and are a perfect fit for the electric renewable energy sector since this will create a zero emission transport sector. No other technology can beat this today.

China is giving high priority to the development and deployment of electric vehicles and may already have the technological advantage. We have a tendency to downplay technological developments in China until it is too late. AVERE believes that it is important that the EU looks into a scenario whereby China opts massively for the manufacturing and use of EVs and would therefore threaten European car exports. Furthermore, the EU also has to consider the fact that electric buses and light vehicles will probably become competitive within 5 years. The problem is that Europe is doing trials with a few buses while China is already putting thousands of buses on the road (BYD, IDTech).

Special contribution from:
Bert Witkamp
Secretary General, AVERE
European Association for Battery, Hybrid and Fuel Cell Electric Vehicles

Ref 1: Rapidly falling costs of battery packs for electric vehicles, Björn Nykvist1* and Måns Nilsson1,2

1 Stockholm Environment Institute, Sweden. 

2 KTH Royal Institute of Technology, Stockholm, Sweden.