10 steps to push electric vehicle adoption

Ernst & Young recently held various roundtables around the world focused on electric vehicle (EVs) adoption. The takeaway: EVs are ramping, but before any tipping point is reached a lot of collaboration and technology milestones need to be reached.

When will EVs hit the tipping point? Ernst & Young, which is trying to position itself in the clean tech market, reckons 2020 will see EVs hit the mainstream. In a report, Ernst & Young argues that EVs will fulfill their promise, but collaboration between vehicle and battery makers, governments and infrastructure providers is needed. General Electric has also made similar arguments for cleantech in general. The report summarizes roundtables held in Silicon Valley, Munich and Shanghai and features illustrations that sum up the talk. Below is the graphic from the Munich EV discussion.

Each region had a different take. Silicon Valley execs naturally focused more on the tech of smart grids and infrastructure. In Shanghai, the focus was on power generation and battery packaging.

A few highlights from the Ernst & Young report:

Market forces, including government support, the enabling infrastructure, customer attitudes and the EV’s value proposition, will determine the type of customer, as well as the timing and trajectory of EV sales. In Europe, take-up triggers include EV availability, pricing, convenience, safety and a continent-wide focus on sustainability; commercial fleets are likely to be the first adopters. In the U.S., the economics and availability of EVs are key drivers, but with a leading role for early-adopting consumers of new technologies. Winning over a mass market will be more difficult, and commercial applications will lag those in Europe because of lower gas prices and lagging commitment to sustainability. In China, by contrast, the primary driving force is the Government’s desire to reduce oil consumption and curtail pollution and its ability and willingness to mandate EVs for government and many commercial uses.

And.

Coordination between the automobile and utility industries — and their regulators — is crucial to developing an EV ecosystem as these two industries undergo rapid change. The shift will be transformative for both industries and open opportunities to new entrants. Clearly articulated and smoothly executed goals at each consumer interface point will bring faster payback and public acceptance of EVs.

And.

Batteries pose separate business model questions. A number of
factors related to batteries deter the purchase of EVs: their high cost; expectations of their rapid obsolescence due to continuing innovation; safety and performance risks; and the question of what to do with spent batteries. Various business models can shift these technological and financial risks of batteries to manufacturers or insurers. In addition, the residual value of batteries depends on what uses may be available for them at the end of their useful automotive life.

That last item is definitely worth pondering. Batteries are critical to the EV equation. What happens when a battery dies? Will customers fork over high four-figure to five-figure dollar sums to replace batteries? Will batteries lose their staying power over time just like they do in your laptop?

Simply put, Ernst & Young notes that a lot of EV moving parts need to come over. In fact, there are so many moving parts that you wonder how Ernst & Young identified 2020 as a tipping point. These tech turns always take longer than first proposed.

With that in mind, Ernst & Young distilled 10 steps that are needed for broad EV adoption.

1. Players need to invest in systems and infrastructure for EVs. Think smart grids. On the consumer front, there may also be some upgrades. Consumer Reports noted that you'll need 220 volt outlets in your home to get a proper charge.
2. Avoid showstoppers and make the transition seamless for the consumers. We'll get a feel for this one as all those early adopters get EVs next year.
3. Interests must be aligned at all parts of the EV chain.
4. Government needs to stay engaged. The government needs to take a roll in development, funding, standards and policies to drive EV adoption.
5. Standards are needed to encourage economies of scale.
6. Batteries need to improve on the safety, pricing and performance fronts.
7. Delight EV owners. Ernst & Young argued that word of mouth will be critical to drive EV adoption.
8. Cultivate first movers. That word of mouth marketing will come from business and government fleets as well as early adopter consumers.
9. Find new business models. EVs will require a redesign of how vehicles are built, sold and serviced.
10. Collaboration is key between government, industry and academia.

At least half of those 10 items will fall in the extremely challenging category. Batteries, the EV buying experience, infrastructure standards and business models are all going to be messy endeavors and could affect EV adoption. The good news is that EVs are moving into the marketplace and ultimately consumers will vote with their dollars.

Related:

• Plug-in electric vehicles to hit 3.2 million by 2015
• As the gas pump fades, a new infrastructure emerges for electric vehicles
• Large automakers eye startup collaboration for electric vehicle development
• Electric vehicles are arriving. What about the infrastructure?

This post was originally published on Smartplanet.com