Electric Vehicles Taking Over the Roads, Seas and Skies
World Electric Vehicle Day is here, and, as an industry analyst, it presents a great occasion to take a retrospective look at the past decade of innovation and disruption.
Indeed, with cars alone, annual sales are on pace to surpass five million strong this year, with ~3.5 million battery-electric vehicles (BEV). If they do, it will mean an astonishing growth rate of ~86% CAGR since 2011.
It is fair to say that this has surpassed analyst expectations. IDTechEx has been writing about electric vehicles for two decades (see our full portfolio here - www.IDTechEx.com/Research/EV), and back in our 2011 report we 'bullishly' predicted 1.5 million battery-electric car sales by 2021, an underestimate by over half.
Perhaps more importantly, electric vehicle markets are proving they are robust: they can grow despite a global pandemic shutting down factories and are not so much unstoppable as inevitable. If you are reading this, you are probably considering one for your next vehicle purchase (and after some quick internet searching, probably still asking 'why do they cost so much?)'.
And even if not, you will be an electric vehicle passenger soon anyway as transitions unfold across our mobility services, seas, and skies, as well as our private vehicles.
Data includes battery-electric vehicles (BEV) and plug-in hybrid electric vehicles (PHEV). Source: "Power Electronics for Electric Vehicles 2022-2032", IDTechEx
The Drivers Behind Electric Cars
For the last ten years, electric car markets have been growing rapidly. 2019 is perhaps the exception, with sales dampened by a policy transition in China and lackluster governmental support in the US (ironically, Tesla and GM sold too many EVs and lost federal tax credit eligibility).
But in 2021, the momentum behind electric vehicle markets is greater than ever, and strong growth is present in all three top auto markets: China, the US, and Europe.
Over the past couple of years, global electric vehicle market growth has been underpinned by Europe, driven by new emissions targets (95g of CO2 per km). Essentially, these targets make it impossible for automakers not to sell electrified vehicles without avoiding large fines.
In the US, Biden has committed $174 billion into supporting electric vehicle uptake (from charging infrastructure to topping up the federal tax credit) and is proposing a new target for 50% electrification by 2030. Sure, this is behind countries like Norway (100% by 2025) or the UK (100% by 2030), but the US auto market is much larger. In terms of the volume of vehicles, this represents one of the largest official commitments by an individual country.
And in China, purchase subsidy schemes around for over half a decade are being extended to help break in the new energy vehicle double credit schemes moving forward.
Overall, the net effect is electric vehicle policy from around the world is pushing electric vehicles into the mainstream this decade, creating tremendous opportunities for those operating in the electric vehicle supply chain.
Critically, while Tesla still leads market share in Europe and the US, incumbent automakers have been increasing their skin in the game. This year alone there has been over 20 announcements related to increasing targets and electrification plans, as shown in the table.
Source: Automaker announcements
Tesla's target is characteristically bullish - 20 million by 2030 with two-thirds global market share. But, as IDTechEx has said before, the company achieves remarkable things on the way to missing its targets.
As the market becomes crowded, range will be a key area on how automakers compete for their slice of the pie.
It is often batteries that take the technology headlines - for good reason - but inverters and motors are very important areas too, where efficiency and weight improvements also improve vehicle range.
Batteries have ~20 - 30% of the overall vehicle price today, but as their costs fall, the value-add of other components is increasing, as found in the new IDTechEx report "Power Electronics for Electric Vehicles 2022-2032".
Indeed, technological innovations in inverters and motors, such as the shift to silicon carbide MOSFETs and high voltage platforms (over 800V), have an important part to play in price parity and product differentiation as the market matures, with the potential to increase WLTP range by up to 10% without touching the battery, as well as enabling ultra-fast 350kW DC fast charging.
Here Comes Hydrogen?
At the other end of the EV spectrum are large, long-haul heavy-duty trucks (HDT). Truck OEMs are under growing pressure to reduce emissions, as one of the largest on-road contributors to them.
Whilst we continue to wait on the highly anticipated Tesla Semi (whose launch has now been further delayed until 2022), the work of OEMs such as Daimler, Volvo, and Scania continues to move on at pace.
Unlike cars, serious concerns have been raised about the feasibility of deploying battery-electric trucks, especially in long-haul applications, as the energy density of current lithium-ion batteries becomes a limiting factor.
However, this challenge is promoting the development of fuel cell (FC) technologies that offer OEMs an avenue to a greater range in heavy-duty applications, whilst (in some scenarios) still achieving low or zero emissions.
Using hydrogen as fuel, fuel cells generate electricity on-board a vehicle, providing the primary power source to drive the electric traction motors, or alternatively, acting as a range extender that charges the traction battery during operation.
But fuel cells are not a silver bullet for heavy-duty transport: significant hurdles need to be overcome for them to become viable. Aside from the typical technical and economic challenges that accompany any new automotive technology, critical to the success of fuel cell vehicles will be the rollout of hydrogen refueling infrastructure and the production of cheap 'green' hydrogen - low carbon hydrogen made from renewable electricity and water.
IDTechEx Estimate of gCO2/km Emission for Different Truck Powertrains. 2030 BEV-HDT uses an electricity mix including renewables and fossil fuels, whereas 2030 green H2 FC-HDT uses 100% renewable electricity. Source: IDTechEx
This is not currently happening - a vast majority of the world's hydrogen is derived from fossil fuels (so-called "grey hydrogen") and has a carbon footprint which, considering the intended goal is to reduce emissions from the transport sector, means grey hydrogen makes little sense as a transport fuel.
Nonetheless, today Hyundai are leading the way in fuel cell truck deployment, with 46 of its XCIENT fuel cell trucks operating in Switzerland as part of plans to introduce 1,600 FC-trucks by 2025. Hyundai have also announced future FC-truck deployments in the US and China. Toyota, Hino Motors, Daimler, Volvo, and Kenworth along with start-ups Nikola and HYZON are also investing heavily in this space.
Making Waves With Electric Boats and Ships
Electrification is also taking place on the waterways with electric boats and ships, a market-driven by technological innovations and falling battery costs rather than policy.
For example, in August this year, Swedish start-up Candela released a new electric hydro-foiling boat, with plans to release a small water bus and passenger ferry later, initially in Stockholm.
A hydrofoil is an 'underwater wing' which generates lift when a vessel moves. At speed, the vessel is raised out of the water, which greatly reduces friction. The innovation has more than halved the battery size required to travel 50 nautical miles for electric vessels of a similar size - 45kWh, instead of 120kWh.
The release of the new model - the C8 - made improvements to the design to help improve mass production, amongst other things. The company matched its three-year order book from the previous C7 model in one month.
Others also have momentum. Torqeedo, the market-leading supplier of electric outboard and inboard drives for leisure boats and small fishing boats, has surpassed 100,000 electric boat drive sales in a milestone that marks steady progress for the industry.
Source and full data: IDTechEx - "Electric Leisure & Sea-going Boats and Ships 2021-2040"
What is remarkable about the achievements in this sector is that it has largely been met with little to no financial incentives or regulation on outboard or inland vessel emissions, which are both key drivers for other electric vehicle segments, as we have seen (the limited emissions regulation that does exist is highly local: a handful of lakes in Germany and Amsterdam's central canals).
Back to the Future: Electric Air Taxis
October 21, 2015 came and went, yet nearly six years later we have yet to see flying skateboards or cars as experienced by Marty McFly in the 1980s. Will we ever see electric air taxis or cars in our cities?
The short answer is yes. In the right applications, electric aircraft can offer cheaper, safer, quieter, and more environmentally friendly air travel, at speeds that offer customers a vastly improved journey time.
Recent advances in battery technology and electric motors have facilitated the design of electric vertical take-off and landing (eVTOL) aircraft, with distributed electric propulsion architectures, that can alleviate many of the issues which have prevented helicopter travel from becoming more mainstream.
There is a lot of activity here, and some exciting progress. The IDTechEx report "Air Taxis: Electric Vertical Take-Off and Landing Aircraft 2021-2041" finds that the closest to market is the Joby Aviation S4 Air Taxi.
Joby has over 10-years of experience in eVTOL design and 1000+ test flights in a full-scale production prototype, beginning FAA certification in 2018. However, the activity in this space should be tempered by the fact that even Joby, with all their experience, say they have "several years" more testing before approval.
While this market is coming, IDTechEx believes it will be at least a decade before we see any widespread deployment of air taxis. One of the major barriers is regulation, rather than technology. From IDTechEx's sample of the most promising eVTOL companies, timelines are highly dependent on the final flight certification process and regulation around flight operations in each geographical market.
The past several months have seen a number of orders for these innovative new aircraft, with American Airlines, Virgin Atlantic, United Airlines, UPS, and aircraft leasing company Avolon, having all placed pre-orders. It is increasingly clear that the demand for these aircraft is there.