Future of Electric Vehicles Remains Bright, Despite Detractors

BMW ActiveE, electric car based on the current 1 Series

Discussion on electric vehicles often seems to be polarized around two different worldviews. Advocates will point out they are the way of the future, a viable way to wean ourselves off oil, and with millions of miles driven in the hands of consumers already, a proven technology.

Detractors will assert they are an unworthy tax-payer subsidized experiment – as someone I know put it. Others cite manufacturers falling short of sales targets and the high expense and poor range of today’s EVs as reasons to doubt the technology’s longevity. In the case of the Chevrolet Volt, it has also become a political artifact – one which symbolizes the Detroit bail-out, and one which commentators often like to point out is struggling to gain traction.

The objective take on electric vehicles is a little harder to extrapolate. The “Charged: EV Symposium Silicon Valley 2012″ presented by the Silicon Valley Leadership Group and hosted by SAP last month, helped to clarify the health of the industry, by bringing together leaders within the EV industry, and the broader EV industry ecosystem.

Here are the main takeaways about the state of the industry today and what can we expect going forward:


First things first. Are electric vehicles going to make it, or are they a bust? Over the course of the two-day conference, the truth seems to be that EVs have neither won the day just yet, nor lost the fight. Some things are working, some things are not, and some things need to be viewed in the context of changing consumer preferences and technological progress.

The first take away is that the long-term success or failure of the EV industry can neither be evaluated by looking at today’s monthly sales figures, nor by looking at quarterly profitability. We see a fixation at the moment on sales volumes of the Chevy Volt and Nissan LEAF – which though interesting, and perhaps the best market indicators we have to go on, are not particularly useful for evaluating future EV viability.

Rather, EVs should be acknowledged as a disruptive technology, where today’s EV drivers constitute the “early, early-adopters” according to Mike Calise of Schneider Electric. He believes “the game will be won or lost in the next 9 years”, starting last year. The industry is only now moving from the experimental stage to the innovation stage, so the time horizon for evaluating success or otherwise needs to be pushed out.

We also have to consider what is right measure of success? The right measure IS NOT a take over of the internal combustion engine (ICE) – it won’t happen. Rather, it’s a matter of application. The ICE will probably do some things better for some time to come, if not indefinitely, but the EV can complement the ICE as part of the overall vehicle mix. There’s room for both – even in the same vehicle – and no car maker is ignoring EV technology.

For example, the OEM manufacturers attending the symposium: BMW, Nissan, and Mercedes-Benz, are all invested in EV technology – BMW with its forthcoming “i” series sub-brand due in 2013, Nissan with its existing LEAF and Mercedes with its Smart EV brand.

Yet each of these manufacturers are looking at a future where people will likely have a different relationship with their vehicles than they do today. A future where transportation will be increasingly networked, cloud-enabled, and connected to consumer mobile devices. This opens up the possibility of a shifting consumer preference  away from vehicle ownership altogether, and towards on-demand availability; these OEMs are preparing for that eventuality.

For example, BMW and Mercedes are backing the hourly rental business models. BMW has just launched their EV based DriveNow product while Mercedes-Benz is experimenting with an app-based integrated multi-modal system in Stuttgart, Germany – involving rail and road.

This potential shift away from vehicle ownership prompted BMW’s Dirk Rossberg to assert, “BMW is not just interested in selling premium cars, but premium mobility services”. EVs can be part of that.

As such, the question is not just whether putting electric motors in cars is going to happen or not, but rather, how will people want to interact differently with vehicles in the future. In turn, what are the right vehicles for that future? Networked, vehicle-to-grid (V2G) connected electric vehicles lend themselves to this vision.

Still, this is a future state that is likely some years away. Today it must be acknowledged that the EV still has its “Achilles-heel.” The battery. There is no “Moores law” in battery technology, and it will never be as fast to charge a battery as it is to fill a tank with gasoline, according to IBM’s Dr Winifried Wilcke. Lithium-Air technology offers a theoretical jump in battery energy density in future –  rendering range-anxiety irrelevant – but it remains only a theoretical possibility today.

And it seems impossible to deny that for the moment, mainstream consumers still want better range (whether they really need it or not) and cost is still a big deal. Schneider Electric’s Mike Calise points out the biggest car buying market consists of those people buying used cars for around $12K; a price point that EVs come nowhere close to today.

But as Joe Dooley from the Pew Clean Energy Program pointed out, 91% of Americans see our dependence on oil as a national security issue. And with the price of electricity more stable than oil, 9,600 public charging stations available in the USA and growing, and 2012 sales figures of EV’s already approaching total 2011 figures – there is undeniable traction in the market place.

If this is really a 9-year game and we’re only a year into it, there’s still plenty of time for this to play out. And while today the Chevy Volt comes nowhere close to selling in the volumes of Chevy’s own Cruze, if the panelists at the Charged EV Symposium are anything to go by, things are really only just getting started and an exciting future lies ahead.

Phil Covington holds an MBA in Sustainable Management from Presidio Graduate School. In the past, he spent 16 years in the freight transportation and logistics industry. Today, Phil's writing focuses on transportation, forestry, technology and matters of sustainability in business.