Electric Cars – Global Trends
Results of Finpro ForesightInes Seidel, June 2009
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Electric Car Trends - Overview
1. Background & Methodology
2. Global Electric Car Climate
3. Related Trends
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Background
• The Ministry of Employment and Economy has established an official task force "Electric Vehicles in Finland“. The aim of the working group is to define the required measures for technology and innovation policy in order to strengthen the foundations of know-how and business aspects in Finland.
• Finpro Foresight has been asked to use Finpro global network to get a view on current trends related to the use of Electric Cars. Can we find signals that relate to the development outlook, impact, business possibilities, as well as future needs of the branch in terms of research and development activities?
• Finpro used the internal platform for sharing and discussing signals related to Electric Cars. The following presentations are an analysis of these signals, where appropriate, also developments that are only indirectly linked to electric cars have been included. – Deeper analysis into specific areas or regions could be a next step.
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Methodology: From Signals to Trends
Signal
collection
Pattern/Trend
Recognition
Analysis: What is
happening + samples
Spillover Effects
Deeper Analysis of
Options and
Opportunites can be a
next step
Do it Yourself
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Electric Car Trends - Overview
1. Background & Methodology
2. Global Electric Car Climate
3. Related Trends
Signals refer to various parts of the
electric car eco-system
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Society Context
Energy Crisis
Economic Crisis
Government Influence
Consumer Acceptance (Costs,
Mistrust, Convenience)
Manufacturing/R&D
Car Industry crisis
Battery R&D Progress
Competing Alternative Transport
Research Breakthroughs?
Enabling Infrastructure
Utilities
Retail/Ownership Models
Charging Infrastructure
Insurance
Questions that move the market
• How long before electric vehicles
become mass market?
While some car manufacturers are sure that
„the time for the mass-market zero-emission
car has come‖ (Carlos Ghosn, Renault-
Nissan), other experts believe that it may
take at least a decade before electric cars
enter the mainstream.
High purchasing costs and lack of
convenience are currently seen as the
main obstacles towards mass adoption.
Hybrid cars are seen as an interim solution.
There is a hope for research
breakthroughs towards better batteries or
other alternative energy that could change
the game completely. Financial incentives
like subsidies speed up mass adoption
already today. © Finpro ry / 7
Research firm Fuji Keizai Co predicts battery-
powered electric vehicles to go mainstream in
Japan only until late 2020s or 2030s
Questions that move the market
• Who will be Winners and
Losers?
Establishing leadership in electric
car technology is like the new race
to the moon – every one wants to
be first. There is a certain
desperation in that competition as
electric cars are seen as a way out
of the crisis for the car industry
and the economic crisis as a whole.
This competition will inevitably lead
to casualties – and potentially also
to conflict over resources. In
many cases, competition for
survival also leads to new
partnerships and also new value
chains/value networks are on the
horizon.© Finpro ry / 8
―The flurry of ruthlessly competitive diplomatic and
corporate overtures to Bolivia … is driven by the
same dream: ultimate control of the future global
market for electric vehicles. An ample supply of
lithium, at least using current technology, is the
critical weapon in that quest and Bolivia is to lithium
what Saudi Arabia is to oil, say geologists. ― Times
online, June 2009
―When the electric revolution final
comes, China's e-bike makers could
have the last laugh‖ – Time, June 2009
Questions that move the market
• Will electric cars make
transportation environmentally
save?
The concern that the electric car/battery
industry is not really solving the energy
and environmental problems of transport is
voiced especially from activists and
consumer groups. Being „a little less
bad“ is not seen as sufficient. Also
urban planning increasingly encourages
alternatives to cars.
As health and safety are generally
growing more important to consumers,
also electric vehicles need to address
these topics.
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―How is using electric cars considered
green technology? If you still are tied to
a nuclear power plant that produces
waste that can‘t be disposed of, how is
that green?‖ – Letter to the Editor, Northwest Herald
Feb 2009
The suburban district Vauban was
designed for living without a car. 70% of
households do not own a car.
Some worry that electromagnetic fields
generated by electric vehicles could
cause cancer.
―The delusion lies in the idea we can
continue to live the way we do (eat,
consume and travel) but do so in a
"sustainable" fashion‖. Sydney Morning
Herald, June 2009
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Electric Car Trends - Overview
1. Background & Methodology
2. Global Electric Car Climate
3. Related Trends
Government Influence
Countries like the U.S. or China have put
it on their national agenda to develop a
leading role in electric car technology.
Governments try to speed market
migration towards electric cars through
financial incentives such as subsidies,
taxes, investments. What will be the
impact of electric vehicles on tax
revenue?
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Only if the cost of ownership is
heavily subsidized will the cost
of electric cars be brought
down to an attractive level for
most consumers. - Comeback of
the Electric Car? BCG, Jan 2009
„Governments could …lose
tax revenues when drivers
spend less money on
gasoline … Will lawmakers
…be willing to sacrifice tax
receipts that pay for the
upkeep of roads in order to
help control climate change.
If not, how will the tax burden
be migrated to the new fuel:
electricity?― - Electrifying cars.
McKinsey Quartlerly 2009, Number 3
Spillover Effects
As electric car and battery industry take a
center stage in plans for the future of
transport, this opens opportunities (and
challenges) to adjacent industries.
Lightweight construction of car parts
and overall sustainable design are
obvious examples. Other spillover effects
on new value chains are not so clear:
Who will own and operate charging
stations? Could electrified cars lead to
new revenue streams for utilities? Will
insurers see electric vehicles as more
risky initially?
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―Because they are not in
the mainstream yet we may
look at potentially a higher
rating for these cars. Part
of the group rating … is the
cost to repair the car. The
cost of repairing an electric
or hybrid car could be
higher because of the
specialist technology they
feature,‖ Norwich Union, Britain‘s
biggest motor insurer.
In the joined project, Vattenfall
provides charging infrastructure
Not just Cars!
When talking of electric vehicles,
typically passenger cars are being
discussed. But electric propulsion can
also make sense for other vehicles,
especially in an urban context.
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Cheap, green electric bikes are
more popular than cars in
China's
crowded cities, helping to offset
the country's pollution problems.
Last year, Chinese bought 21
million e-bikes, compared with
9.4 million autos.
R&D Wildcard
The search for the best future transportation
is going on. Hydrogen powered vehicles
seem to have lost the competition: Ford and
Nissan cancelled their hydrogen car plans
and the U.S. Department of Energy has put
the brakes on hydrogen fuel cell research.
Could other alternatives (such as
advanced internal-combustion engines
(ICE)) make battery powered vehicles
obsolete? Regarding batteries, R&D efforts
are for instance concerned with storage and
speed of charging. As lithium is difficult to
recycle, also advances in recycling or
alternative materials are needed.© Finpro ry / 14
Multi-fuel Cars: Technology that
will allow cars to run on petro,
ethanol, bio diesel, hydrogen,
natural gas or biomass based fuel
is developed at the German
Aerospace Center in Germany.
The various types of fuel are
turned into electricity and the
motor is in effect an electric motor.
BCG developed 3 scenarios
and found that ―internal
compustion engines will
remain the dominant
technology in 2020 ―- Comeback
of the Electric Car? BCG, Jan 2009
Alternatives to Ownership
As many consumers are less interested
in owning products but more in using
them, alternative ownership models
are gaining in popularity, especially in
the field of transport: car sharing, bike
sharing and even boat sharing programs
can be seen, with very different business
models (e.g. community ownership; or
company remains owner but sells usage
time). Similar service models are also
used for instance in solar technology.
Likewise, innovative business models
could make electric vehicles affordable
per use.© Finpro ry / 15
Vancity—Canada's largest
credit union (!)—kicked off
their free Bike Share program
in summer 2007 and has since
got a lot of positive feedback.
Sunlabob Rural Energy (Laos)
is renting solar panels to
communities and solar
powered lanterns to
individuals.
Do-it-Yourself
With collaboration and empowerment
becoming a way of life it is little wonder that
we see crowdsourcing /open source car
projects also in the terrain of electric cars.
Enthusiastic users hope to be able to
develop more innovative and less expensive
cars – ideally with support from carmakers.
Similar developments can be seen in relation
to energy: As energy prices become more
noticable in people‗s budgets, consumer
generated energy becomes an interesting
alternative.
The influence on electric vehicle market
remains yet to be seen. © Finpro ry / 16
Sustainable mobility is at the
heart of the motivation
behind c,mm,n (pronounced
"common"), an initiative from
the Dutch Society for Nature
and Environment along with
3 universities. Aiming to
provide an open source
model for cars in the year
2020, the first collaboratively
designed prototype car was
debuted recently at
Amsterdam's AutoRAI 2009
car show.
More radical, please!
Despite the enthusiasm of governments
and many consumers, whether electric
cars can fulfill the promise of being an
environmentally friendly transportation is
not certain. If involved industries cannot
address these issues convincingly and
with a holistic concept of sustainable
design, investments may turn into losses.
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„If you want a cheap
way to be fuel
efficient, buy a car
that‗s half the size.
Hybrids cannot
compete with that.― –BCG consultant Xavier Mosquet
in interview, Mar 2009
„(B)atteries at the end of
their lives may be
liabilities, not assets,
because of their recycling
costs.―– - Electrifying cars.
McKinsey Quartlerly 2009/3
Electric cars emit gases indirectly if
they use widely available power from
fossil fuel electric plants which burn
coal, natural gas and petroleum .-
International Business Times, Feb
2009
―If we accept the ―cradle to cradle‖
philosophy, there‘s no reason there should be
any garbage at all. No waste. Living systems,
ecosystems, don‘t waste.‖ – Justin Podur,
Canadian activist, Apr 2008
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Contact
Markku Vantunen – Foresight Process
00358 40 3433407
Ines Seidel – Foresight Projects
0049 8954264731
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