Despite its many critics, which since the 1990s have been vociferous in their claims that they will never amount to much – ever seen “Who killed the electric car?” – the march of the electric vehicle (EV) is gaining speed.
According to BloombergNEF in May, by 2030 EVs will make up 44% of all new vehicle sales in Europe, 41% in China, 34% in the United States and 17% in Japan. By 2040, it said, they will comprise a market share of over 55%.
Meanwhile, in its Energy Transition Outlook, released in September, DNV GL’s forecast was even more positive, stating that by 2033, half of all new car sales will be electric.
“This growth will follow an S-shaped curve of innovation, with Electric Vehicle (EV) sales increasing from less than 10% to more than 90% within a 10-year period, resembling the fast transition seen with technologies such as digital cameras,” said the report’s analysts.
Backing up these projections are the activities of various traditional and purely electric automobile makers around the globe.
Take the scandalous Germany-based Volkswagen Group, for instance. Perhaps in a bid to make amends for sneakily contributing to the growing level of emissions in our air – you will surely have heard the good news that this year will see carbon emissions increasing by around 3% (it would be funny, if it wasn’t so scary) – the manufacturing giant has said it will invest “over €11 billion in e-mobility, digitalization, autonomous driving and mobility services from 2019 to 2023, of which over €9 billion will be spent on Volkswagen’s electrification offensive.”
Specifically, it says its product portfolio will expand from just two fully-electric cars today to around 20 by 2025. Planned production of these is set to be over one million units.
It adds it is currently working on converting its Zwickau manufacturing plant in Saxony, Germany, to focus 100% on electric mobility, while there are plans to convert both its Emden and Hanover plants to EV production from 2022. In Zwickau, Christoph Adomat, leader of future technology communications at VW tells pv magazine, production of the first MED Model will start at the end of 2019. “In the course of the year 2020, we will gradually finish the production of the gasoline models Golf and Golf Variant in Zwickau – from 2021 we will then be producing all-electric vehicles in Zwickau up to 330,000 vehicles per year,” he continues.
Furthermore, in Anting and Foshan in China, VW is planning two EV manufacturing plants. In the former, production is scheduled to start in 2020, with a planned annual production capacity of 30,000 EVs, while in the latter, up to 60,000 cars will be produced per year. Finally, it says it is also looking at locations in North America and “plans to make a decision on a production location for electric vehicles soon.”
Adomat says that between 2015 and 2019, the group planned $7 billion in North American investment. It has “recently pledged another $3.3 billion by 2020,” he says, adding that he is unable to disclose any further information on the topic.
Overall, VW says it plans to deliver up to 1.5 million EVs annually by 2025.
Moving on to Tesla Inc., which may be good to go in terms of air pollution, but has nevertheless been plagued with numerous scandals of its own this year, Bloomberg has reported that the U.S.-based EV car and battery manufacturer’s Chinese plans are taking more concrete shape.
Indeed, citing a statement published on the city of Shanghai’s WeChat account today, it reported that Tesla will begin production at the Gigafactory 3 in the second half of next year.
While the EV pioneer apparently failed to comment on the news, Bloomberg writes that the mayor of Shanghai, Ying Yong, visited the project site in the Lingang development zone, where over 210 acres have been secured for the several billion dollar factory.
Back in May, it was reported that Panasonic Corporation may soon begin manufacturing lithium-ion batteries in China for Tesla. While no further details were provided at the time, it was announced in July that Tesla (and another naughty German car maker, BMW) had individually signed agreements to open EV manufacturing facilities there.
Representing its first manufacturing site outside of the United States, Tesla said at the time that it would set up the new Gigafactory, for the production of 500,000 vehicles per year in Lingang New City. According to the announcement, the new factory will reflect the production capacity of that of its main facility in Fremont, California.
The move came against the backdrop of the U.S.-China trade dispute, which among other industries, affects the EV sector; and China’s lifting of restrictive ownership rules on foreign factories in April, designed to attract foreign EV brands to produce cars in China directly.
Gearing up for an IPO
Also in China, BYD Co. is gearing up for an IPO of its battery business in an attempt to grow business, a separate Bloomberg report reads. According to an interview with Chairman Wang Chuanfu, the listing is set to occur “sometime by the end of 2022 and the company hasn’t decided yet where the shares will be trading.”
The report says that BYD will spinoff its vehicle-battery operations into a separate company before listing. However, it is not said to be clear yet whether the IPO will be for the car-battery business alone, or will also include other units.
Both BYD and Contemporary Amperex Technology Ltd (CATL) are China’s biggest makers of battery packs for EVs. In July, the latter said it would establish Europe’s first battery cell manufacturing facility in Germany’s Thüringen. With an annual capacity of 14 GWh, the battery cells are expected to be primarily produced for the EV industry. €240 million is set to be invested in the project by 2022, and 600 new jobs created.
Prior to the announcement, Reuters and a BMW blog both reported that car manufacturer, BMW had signed a €4 billion deal with CATL for the delivery of battery cells over the coming years. Reuters added a long-term cooperation contract, with a term of at least 10 years, has been inked, with €1.5 billion worth of orders coming from Germany, and €2.5 billion, from China.
In June, at Intersolar Europe, Maroš Šefcovic, VP for Energy Union, European Commission called on the continent to establish a European battery industry.
Not just good for transport
As we’ve previously reported, not only do EVs pose a solution to reducing CO2 emissions, but they also offer a real way to cope with the integration of intermittent renewables into electrical grids – one of the many arguments against the ramping up of renewables.
Moreover, second-life EV batteries are offering up numerous business cases in the stationary storage arena.
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V2G will come first to fleet operators, especially buses. The Shenzhen bus operator already has 16,000 e-buses, charging overnight in large depots. The mileage required the next day in a particular bus varies according to the route assigned. There must overall be very substantial battery capacity available to lend to the grid. The problem with buses (and in future trucks) is that the timing is suboptimal for the grid: the capacity is available at night, not in the daytime when it’s most needed.. That does not apply to school buses, where these are dedicated fleets as in the USA, or cars driven to work and left in the car park all day. Garbage trucks usually work in the morning and their batteries are available in the afternoon.
Note that grids need despatchable reserves, some spinning, even when they don’t actually call on them, as a safety margin. Having V2G battery capacity on call cuts the need for other backup.
Bloomberg and the other conventional analysts crack me up. Far closer to our future reality is “A RethinkX Sector Disruption Report May 2017 James Arbib & Tony Seba”, the best analysis I’ve seen of the future for EVs and autonomous vehicles.
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