Next-Gen Mobility: Building the EV Ecosystem

Transcript

STEVE HENDERSHOT

The rise of electric vehicles means more than new powertrains. It’s causing a rewiring of the transportation and mobility industry, and that could mean new ways of working and new—perhaps unexpected—project partnerships.

GAURAV BATRA

The transition to electric mobility is an ecosystem play where we’ve seen blurring of the traditional industry boundaries and creation of new bedfellows. As we move forward, the industry will need to display agility and embrace collaboration with peers and players across the industry value chain to help create the offerings for tomorrow.

NARRATOR

The world is changing fast. And every day, project professionals are turning ideas into reality—delivering value to their organizations and society as a whole. On Projectified®, we’ll help you stay on top of the trends and see what’s ahead for The Project Economy—and your career.

STEVE HENDERSHOT

This is Projectified®. I’m Steve Hendershot.

As the world grapples with the effects of climate change, government and corporate leaders around the world are taking action. One major headliner in the conversation is electric vehicles, and they’re hitting a tipping point: Automakers like GM and Audi aim to go all-electric by 2035.

The shift isn’t just about helping the planet—it’s also a shrewd business move that can create economic opportunities for companies and communities. Consumer demand is booming, with electric car registrations jumping 41 percent worldwide in 2020, according to the International Energy Agency. And companies are taking note. Ford and SK Innovation, its South Korean battery partner, will invest 11.4 billion dollars to build four plants to build an electric F-150 and the batteries that go inside—creating nearly 11,000 jobs.

Yet even with demand increasing, the International Energy Agency found EVs accounted for just a sliver of overall sales in 2020. There’s a lot of ground to make up—not only in terms of electric vehicles, but also the infrastructure needed to support them.

Today, we’re speaking with two leaders about EV efforts and the projects they see down the road. We start with Gaurav Batra, who leads the global advanced manufacturing and mobility analyst team at EY based in New Delhi.

MUSICAL TRANSITION

STEVE HENDERSHOT

It’s clear that the EV adoption timeline is accelerating. What’s less clear is exactly what that will look like in terms of the technologies that emerge and so forth. So what does this emphasis and shift mean for companies launching and managing projects in this space over the next handful of years?

GAURAV BATRA

Clearly, we are witnessing a new era of mobility, and there is an acceleration in the transition toward e-mobility across the globe. And this is primarily driven by the growing concerns around climate change, increased thrust in sustainability and the clamor to address the rising pollution levels. Now, this transition is also being enabled by the supportive government policy, some of the improvements that we’ve seen in the battery technology space, obviously the availability of products, which are better from before, and improving charging infrastructure, and, very importantly, declining total cost of ownership for EVs. In fact, within EY, we’ve analyzed sales for U.S., Europe, and China, and we believe that sales in the EV space will outstrip all other engines by 2033, which is about five years sooner than previously expected.

What we also imagine is that fleet electrification trends in commercial applications such as company cars, ride hailing, car rentals and last-mile delivery vans will lead the EV uptick as these are borne out of commercial considerations and make sense even now based on the total cost of ownership, and therefore can have a much more defined charging infrastructure plan for them given the fixed routes they ply on. We therefore expect to see EV shared miles outgrowing personal electric miles by about early 2030s, essentially pointing toward an increased uptick of EVs as part of shared fleets. Now, if you look at the government support behind all of this, I think vehicle electrification and transport decarbonization are now central government support policies.

STEVE HENDERSHOT

What role is the pandemic playing in all of this? This has obviously changed the way that people are relating to public transportation, modes of transportation, wanting to consider things differently in a way that disrupts the trends that were previously in place, and you can see some of this in EY’s Mobility Lens Consumer Index. How do you see this affecting mobility trends, both in the short and then more importantly, long term?

GAURAV BATRA

On this subject, we’ve conducted a very interesting study, and it was essentially driven by our interest to get a better understanding of the impact of COVID-19 on the mobility sector. So last September, we conducted the first iteration of the Mobility Lens Consumer Index, which was essentially focused on the changing travel patterns and preferences, and essentially centered around the rising working from home culture—reduced time on entertainment and socializing, and an increasingly digital consumer behavior. Then, we decided to follow up and conduct a wave two consumer research survey. And in the wave two research, we also looked at the changes that happened in mobility and which of them are likely to become a lasting trend.

One of the top themes that emerged from the survey results is the increased consumer interest in electric vehicles and the overall sustainability as a subject. Around 41 percent of those looking to buy a car next year indicated they were looking to buy an EV. Interestingly, we also noticed that for the first time, environmental concerns topped the reason for considering an EV across all age groups. In fact, 53 percent of those looking to buy an EV feel that it is their responsibility to reduce the environmental impact, and an equal number feel that buying an EV is one of the ways to achieve it. What was also surprising for us was that around 66 percent of the consumers said that they were willing to pay a premium for an EV, and this increased to about 91 percent among those who were looking to buy an EV as their next car.

So overall, I think the COVID-19 pandemic gave rise to more consumers being interested in living greener lives and essentially purchasing electric vehicles. However, this newfound resolve to live a greener life and choosing a sustainable vehicle is countered by ingrained practical concerns around cost, range and charging infrastructure. And those are attributes that the industry, the government, need to address.

STEVE HENDERSHOT

So as you think about public transportation and how we might use mobility generally and what sort of electric vehicles are likely to emerge in this next generation and re-imagining of mobility, which of the pandemic trends do you see as temporary and which will endure?

GAURAV BATRA

We’ve been witnessing a lot of exciting developments in the mobility space in the last few years. Driven by the pandemic, I think some of the gains toward the transition toward multimodal and shared mobility alternatives have been lost. I think the car is getting cemented as the safest and most convenient mode of choice. Even as the immediate pandemic risk declines in many countries, public transport loses out to the car as expected.

Despite the widespread government efforts to get people walking and cycling more—for example, we’ve seen many new bike lanes created in cities such as New York, London, Paris, etc. during the pandemic—people’s stated intentions is to use their cars more often than they did pre-COVID and to walk and cycle less. In our survey as well, we found that 50 percent of those we interviewed stated that they expect to buy a car, and this was up from the September findings with about 65 percent of them saying that they would buy one in the next 12 months. With the number of journeys taken across the board expected to decline compared with the pre-COVID-19 levels, public transport has been the biggest loser when it comes to the mode of choice. It is down by about 11 percent, and only 33 percent in our survey agreed that public travel is a safe and convenient way to travel.

Now, what options does this situation present to us? Essentially, building in the last-mile urban options such as EV charging hubs, which are co-located with public transportation networks, could help revive public transportation networks across the countries post-COVID-19 and further add to the sustainability credentials of EVs in consumers’ minds.

And I think what we also feel is it’s not either/or. I think EV ownership and public transportation usage are not mutually exclusive. City authorities still have a major role to play in integrating public transport, but they will require support. By acting together, the OEMs, city authorities, and governments can demonstrate their commitment to sustainable mobility and help provide public transportation usage post-COVID-19. But the overall message from the survey is clear, which is more consumers than ever are now sold on sustainability benefits of EV ownership and are ready to join the club. I think the winners will be those who can offer them membership on the most affordable, user-friendly, and reassuring terms.

STEVE HENDERSHOT

So with this projected increase in demand, are electric vehicles ready for their big rollout?

GAURAV BATRA

Absolutely. There seems to be a lot of momentum building around the transition toward e-mobility. From countries to industry players, and also consumers, there’s a growing awareness and adoption. Countries like Norway and China are way ahead in their EV adoption and maturity curves and have really set an example of how government policies and better infrastructure deployment can motivate consumers to help drive higher EV adoption.

MUSICAL TRANSITION

STEVE HENDERSHOT

As the number of EVs on the roads increases, drivers will need the infrastructure to keep vehicles charged and on the move. I spoke with Dan O’Shea, director of utility strategy and business development in the U.S. e-mobility division of ABB. We discussed projects to build out EV infrastructure, the rapid pace of change in charging technologies and what’s next for the world’s electric mobility future.

MUSICAL TRANSITION

STEVE HENDERSHOT

Let’s start off by taking stock of the state of charging infrastructure around the world. What’s the current status, and what would it take to seed the world with the charging stations necessary to support a much greater share of electric vehicles?

DAN O’SHEA

If you talk about worldwide, one of the favorite places people look is Norway. They’ve done it by federal edicts and mandates where they’ve got an amazing percentage of sales—I think it’s something like 80 percent of vehicle sales are EVs—and the government started years ago putting in all sorts of chargers all over the country. So they are very well positioned.

In the United States, we’re going to finally have a very robust—hopefully, fingers crossed—federal EV charging infrastructure plan that will be trickled down to the states to mostly dole out that money. And then there’s also the private sector. Now, the private sector will benefit from the grants but also the benefit the private sector brings is a lot of innovation. And then in addition to this that really ties it all together are the electric utilities really jumping on board.

STEVE HENDERSHOT

So when it comes to creating this infrastructure, what should that look like? Is the idea to replicate the current service station infrastructure and to serve both individuals and families as well as fleets?

DAN O’SHEA

Petrol stations in the U.S., some of them are across the street from each other. Some of them, there’s four corners and four different stations. The question is, do we need that for electrification? The answer is mostly no, and that is because of the ubiquity of electricity as a fuel, right? Pretty much everyone has it at their house and pretty much anyone with a single-family home is going to be able to plug in a vehicle. So at this point, the super majority of EV drivers can wake up with a full battery. The petrol stations are that third place that you need to go—is for the trip that you need to take across state with a vacation or to go visit someone who’s further away than your battery can get you.

So the landscape of choosing where the real estate is going to be for these high-speed stations is going to be based more on the services. It’s a little bit like the gas station model. You want to park somewhere; you’re going to be there a little bit longer. You want somewhere nice to hang out and grab a coffee, grab a sandwich, do what you need to do and get back on the road. And so I think you’ll see some other players, like the convenience stores, get into this, where they may actually redesign their stores. And this is happening in Norway where convenience stores have completely redesigned what they look like so that it’s actually an attractive place to hang out because you’re going to be there a little bit longer. That’s a form factor of the retail aspect that is going to have to happen because the revenue models for the fast chargers are similar to petrol in that the margins and the business model is not in the fuel, it’s in the place that you go to hang out. It’s in the coffee and the food and the other things that you’re going to pick up on the way.

STEVE HENDERSHOT

What about EV drivers residing in large cities? What does the charging infrastructure look like for city-dwellers with street parking?

DAN O’SHEA

Populating existing high-rise buildings with EV chargers is probably one of the most difficult tasks in our business, and it’s really not likely to happen at any scale in say New York City or London or Chicago. Now this can be addressed with new builds, right, or revisions with building codes, parking codes, and government requirements. And this has to happen. It is happening in a lot of cities that they’re mandating that new construction have X number of either capacity in the panel or spots electrified in order to actually get their permit. So that’s very, very important for any new builds.

I think at some point all residential will have 40 amps available for EV charging in home. In apartments and new construction, it’s going to trend in that direction. The technology is there actually to take an old building in New York with some limited electrical service and provide chargers in the garage. The technology is not the problem—it’s the political will. You’ve got the garage manager, you have the building owner, you have the tenants, you have a whole lot of other things that have to all fall in place in order to install that technology in those garages. And it’s difficult.

So what you need in the city are infill quick chargers. So in Manhattan or in London, you need a place to go that you can pull in and park and charge for 10 or 15 minutes every few days. That’s a part of the urban infill plan that needs to happen. Technology is addressing it—the power electronics are getting smaller. The chargers are smaller and more high-powered today than they were five years ago. You can actually install a fairly high-powered charger in a tight urban environment that would solve this need.

But it’s important to understand that that technology is changing pretty rapidly because it has to, and so to take a step back, like, where’s the technology going and how fast can we get there, right? I liken it to in 1960, we couldn’t get to the moon and by 1969, we were on the moon. The technology didn’t exist to get us there, but we focused people and resources and money and vision and momentum into that and we got there.

STEVE HENDERSHOT

Let’s forecast ahead, whether it’s 2030, 2040 or beyond. Where do you think we’re headed in terms of what will be possible with charging infrastructure, and what kind of electric mobility future might we experience at that point globally?

DAN O’SHEA

I think by 2050, the majority of vehicle sales will be electric globally, without a doubt. The other things that need to happen in transportation, aside from light duty, are medium and heavy-duty and long-haul trucks. Commercial transportation actually is a pretty significant section of all of transportation. And so it can, and should, be electrified. There’s projects right now happening that are rolling with class eight trucks that are electrified. And so this is also happening faster, I think, than expected. And I think that by 2030, we could see a fairly significant number of medium and heavy-duty trucks out there.

MUSICAL TRANSITION

STEVE HENDERSHOT

For a long time, EVs seemed like something in the far-distant future. But climate change is forcing corporate and government leaders as well as consumers to face the reality that mobility needs to change.

Getting there will require some serious collaboration. Elon Musk may have single handedly built buzz around EVs with his Tesla line, but it’s going to take a whole lot of teams working across disciplines and borders to deliver the kind of vehicles and infrastructure we need to put EVs in the fast lane. That’s good for the planet—and the bottom line.

NARRATOR

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