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Why the E-Mobility industry has reached the tipping point

We are now in a transition period where battery prices are dropping by 20-30% each year. The consequences for the automotive industry are mindboggling

About a century ago the nascent automotive industry started out by producing electric vehicles. Even big names such as Porsche started their business on a pure-electric basis. In the hundred-year hiccup that followed we have burned billions of tons of fossil fuel, but the clean times of pure electric are returning.

The trigger to this all is simple: affordable batteries. Just as the television business was turned upside-down by the prices of flat-panel TVs in the 90’s and similarly the solar business by plummeting panel prices in the decade thereafter, we are now in a transition period where battery prices are dropping by 20-30% each year. The consequences for the automotive industry are mindboggling.

Battery prices are the main cost drivers of electric vehicles. Last year Volkswagen stated that it would be possible to manufacture a 100% electric vehicle more cheaply than a car with a combustion engine within three years.

Three years ago it was a challenge to produce an electric vehicle with a 300km range for an affordable price. Well, we have seen what happened to the stock price of Tesla Motors after the successful introduction of the Tesla-S – a 300-km range electric vehicle, which is outselling Porsche and Audi in California at the moment.

In China there is an additional market driver: megacity air pollution. The large metropolitan areas are turning into smog centers and the Chinese government has decided to invest massively and switch quickly to e-mobility. The result is the establishment of tens of new companies to produce e-bikes, e-cars, e-buses and batteries.

With the arrival of long-range affordable electric vehicles the challenges to the charging infrastructure increase proportionally. Charging power must go up, both at home and in public charging stations.

Over the last 5 years the e-mobility industry has converged around three global fast charge standards. Europe/USA have selected the ‘’Combo’’ standard, China has selected the ‘’GB/T’’ standard and Japan has selected the ‘’Chademo’’ standard. The selection of standards is the result of a five year political and strategic dance among governments and automotive players, but the dust has settled and the markets can begin to takeoff.

ABB is contributing to this critical stage in the market with its Terra 53 charging platform, the world’s first to meet all DC fast-charging standards. With its multi-standard architecture and near-term option to cascade the stations to higher power, the Terra 53 is ideal for highway and city centers, fueling stations, fleets, and other infrastructure investors who are interested in the growing EV charging market. In addition to that, ABB is launching high-power DC home chargers to enable overnight charging of large-battery vehicles, which would otherwise take a weekend or two to charge from an ordinary home-socket – times are changing.

National networks such as the one announced by the Netherlands this past summer will bring fast charging stations to within 50 km of all of the country’s 16.7 million people. To put that into perspective, 16.7 million people is about the size of Shenzhen, and that’s only one Chinese city…

The automotive industry has to switch, and switch quickly. Batteries will do to the automotive industry what flat panels did to TV and PV-panels to the solar business.

7 Comments

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  • BobnJoe JoenBob

    Hello Hans;
    Would you be interested in discussing a revolutionary way to increase the electrical efficiency of any electric vehicle? Real science
    Robert

  • Shivkumar Kalyanaraman

    Could you elaborate on details surrounding the 20-30% battery cost reduction trend? What is it driven by? How long could it go (irrespective of energy density gains) ?
    Shiv

  • Bob_Wallace

    Would you please flesh out your "20% to 30%" claim?

    Source? Prices? That sort of drop for how many years?

  • JolinarCZ

    ABB still can't charge Tesla cars with DC :(

    • https://plus.google.com/u/0/?tab=wX#109016704019682085950/about/ Gavin Hudson

      As I understand it, for DC charging Tesla has decided to make their cars only compatible with Tesla's proprietary charging stations, a little like Apple has decided to use its own charging cable instead of the standard mini-USB. For AC charging (ex. at home) you can use an ABB AC charging station with your fleet of Teslas (and send a Model S my way, please).

      • Bob_Wallace

        Other rapid charging systems didn't deliver enough juice, weren't fast enough.

        I believe Tesla has said that they are willing to let other EV use their superchargers. But best double check that.

        It will be a while before all this charging stuff is sorted out. This is a very new technology.

      • JolinarCZ

        I'm much aware of complexity of charging... I just wish that Tesla would not be so much proprietary about their DC charging protocol. ABB and other firms could make fast chargers too and whole EV industry would benefit from it.

        btw: do you know what is power limitation of SAE Combo DC charging? I've seen 170kW somewhere, but maybe you have better and more reliable info. We already know that Tesla SuperCharger is capable of 135kW (in Germany).

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