Tipping Point To Mass Scale Adoption Of Electric Vehicles

Tipping Point To Mass Scale Adoption Of Electric Vehicles

Will Electric Vehicle growth Mirror Mobile Phone Market

Source ITU - key Global Telecom Indicators

It is not surprising how the electric vehicle growth story mirrors mobile phone growth but about 30 years later. It was in 1973, when Martin Cooper, a Motorola researcher made the first analog phone call using a heavy prototype device. Then came the first generation of mobile cell sites, with ability to transfer calls from one site to next in 1979.

It was in 1981 when 1G network was launched by Nordic Mobile Telephone and then in 1984, Bell Labs launched commercial cellular technology which employed multiple centrally located cell sites each providing service to a small area. It was in 1990 the second generation 2G mobile phone emerged using GSM standard. Although 2G digital technology was sufficient to grow mobile phone market, it was the talk time due to battery limitation that stopped the growth of this emerging market.

It was not until 1996 where Nickel Metal Hydride and then Lithium batteries were introduced in cell phones reducing their size while increasing the talk time that exploded the market into triple digit growth. The market grew from 11 million handsets to 91 million overnight and now at 5.4 billion in short 10 years. Being an early adopter you can always count me in the 11 million handsets sold during early 1990.

Although historians may argue that the exponential growth was result of improved networks, infrastructure and software development, yet from consumer standpoint it was the talk time and reduction in number of daily charge time made it a practical device. It was the high rate of adoption by consumers that resulted in investment into infrastructure, software and digital technology.

Similar is the story of Electric vehicles, although 30 years later. In electric vehicle history, it was in 1992 when we sold 400 electric delivery vans to subsidiary of Frito Lays in Mexico (a single largest deployment of electric vans in single location) yet it was the lack of battery technology that did not allow exponential growth anticipated. During the past decade lot has been done in terms of development of motor, transistor, charger technologies to set the stage for this predicted growth in next five years. Today with three times more battery energy than five years ago, with newer generation of batteries on the horizon which will triple the range in next 2-3 years, is what leads us to the question "Will EV market growth match growth rates of Mobile Phones?". I know its an odd question on surface yet both industries were waiting for newer battery technology.

Electric Vehicles - Tipping Point To Mass Scale Adoption

Mass adoption of Electric vehicles might only be a few years away. The key to adoption of electric vehicles is the acquisition cost, infrastructure and range of the vehicles. Current range of most Electric Vehicles (EV's) in the market is equivalent to having a 2 gallon fuel tank. Although most of us do not use 2 gallon of gasoline in our everyday commute, we would all have a range anxiety if our cars had only 2 gallon fuel tanks. We would immediately demand gas stations be built near our workplace, shopping centers, airports and homes, before we purchased an automobile.

Similar is the case of range anxiety with electric vehicles. Lot of consumers, are not aware that we are only one generation of battery chemistry away from a six (6) gallon fuel tank equivalent. The next generation battery will also solve the infrastructure issues related to electric power grid. Imagine a 6 gallon tank equivalent EV, which would be equivalent to 250 mile range on a single charge, sufficient for EV users to come home charge their vehicles during off-peak hours. This would require much smaller home chargers that do not need upgrade of home infrastructure, and does not impact electric grid during peak hours. Similarly, businesses will be able to adopt EV's for distribution applications, charging their trucks, vans or other vehicles at their business facility during the night.

Mass adoption of this next generation of electric vehicles will result in investment capital moving away from innovation phase of EV's (and batteries) to integration phase of EV's. Flow of capital investment will increase towards construction of new manufacturing plants, hard tooling of components and assembly automation resulting in cost reduction of EV's below gasoline vehicles.

This scenario of rapid transition (within 10 years) to EV’s has been proven before in the industry. Let us take for example the golf cart industry that started in 1954 where all golf carts introduced were electric powered. In 1970’s golf cart industry transitioned from electric golf carts to gasoline powered golf carts due to lack of control and charger technologies. It was in early 1990’s where solid state controllers and automatic chargers were introduced, leading to rapid reversal of the industry from gasoline powered golf carts to electric golf carts. Today, it is very rare to find a gasoline golf cart globally, resulting in over 90% of the golf cart market controlled by electric models. Today, not only electric golf carts control majority of the market, but also electric golf carts are 25% lower in price than its gasoline competitors.

Similar stories can be found in forklift, ground support airport equipment and industrial equipment industries. One thing common in all these industries was that the transition to electric technologies was very rapid (within 10 years), once the relevant technological issues were resolved. Another thing common in these transitions was that the price of electric vehicle was always lower than the fossil fuel powered vehicles once some scale was established.

Most automotive pundits that predict demise of electric vehicles, fail to recognize that repeatedly consumers and businesses have adopted electric vehicle technologies once relevant technological issues are resolve. Electric vehicles are inherently energy efficient, lower costing and reliable when produced at certain scale. With lower operating costs of up to 80% when compared to diesel or gasoline vehicles, the adoption will be led by economics and not by environmental concerns alone.

Similar to computer industry, electric vehicle battery technology has doubled its energy density every 24 months. It was only five year ago, industry was using 50 whr/kg lead acid batteries and today 200 whr/kg lithium batteries are available at reasonable cost with prices dropping every six months. With promise of technologies such as Lithium-Thionyl Chloride at 750 whr/kg only 24 months away; and Lithium Air at 1100 whr/kg only 60 months away from commercialization, it is clear that the range issue will be solved shortly. 

Due to efficiency of electric drive train, energy density of 2300 whr/kg would result in energy density parity with diesel fuel, which means 100% of the industry can convert to electric drive trains without any weight penalty. Considering improvements made in past five years in battery technology, it is certainly conceivable that during the next 10 years majority of the products will be electric powered.

Meanwhile car companies like Nissan, Ford, GM, Toyota, BMW continue to invest into propulsion systems and vehicle platforms that will reap the benefits of these innovations. Similarly companies like Navistar, Protera and Balqon Corporation continue a similar effort towards development of zero emission solutions for heavy and medium duty commercial truck and bus markets.