Power sector accelerating e-mobility
The six essentials for e-mobility
In collaboration with
HOW CAN WE ACCELERATE
E-MOBILITY?
The 6 essentials
A lot has recently happened in the e-mobility space. Starting with the most significant – on 14 February 2023, the European Parliament voted to phase out internal combustion engines (ICEs) for new passenger cars and light-duty vehicles by 2035. In terms of drivetrain sales, electric vehicles (EVs) have been the big beneficiary of the automobile post-pandemic recovery, breaking records year after year.
2022 was a bumper year for e-mobility in Europe with electric car sales capturing over 20% of the market up from 17% in 2021. There are now 8 million EVs in Europe. Beyond that, there is also a European Commission proposal to reduce heavy-duty vehicle emissions by 45% by 2030 and by 90% by 2040.
Soaring energy prices and aggressive industrial competition have not stopped electromobility either. This year three-quarters of vehicle sales will be electric and by 2030 half of the vehicles sold globally will be either battery electric or plug-in hybrid. Suffice it to say, ICE age is in full retreat, and it is leaving a vacuum for e-mobility to flourish in Europe.
We need to be ready for this EVolution.
“The EU should not waver but master the leadership to drive change. We have identified six essentials to do just that and scale clean affordable electric vehicles across Europe”
The e-mobility future has
6 essentials.
What are they?
labour
These six essentials will fundamentally contribute to unique challenges and opportunities in the e-mobility system.
Why are they so important?
Essential 1: Critical raw materials
One of the most pressing bottlenecks to scale battery electric vehicles production in Europe is access to raw materials. EVs, in comparison to internal combustion engines autos, are significantly more resource intensive. Their massive batteries are packed full of raw materials such as nickel, lithium and cobalt, that Europe has constrained access to.
EV critical mineral demand compared to conventional ICE vehicles (minerals kg/vehicle)
No Data Found
Source: IEA 2022; Minerals used in electric cars compared to conventional cars, https://www.iea.org/data-and-statistics/charts/minerals-used-in-electric-cars-compared-to-conventional-cars, License: CC BY 4.0, International Energy Agency, 2022
Geopolitical developments in recent years have taught us the hard lesson of our dependence on less-than-reliable partners for essential supply chains. With scarce access to some of the most essential components, easing access is one of the most critical elements to keeping e-mobility on track.
Essential 2: Clean power generation
Reducing direct vehicle emissions by electrifying their drivetrain is great. Powering them with electricity generated from clean power is even better.
In 2022, roughly 25% of EU emissions came from the transport sector according to Eurostat. E-mobility can eliminate them in two ways.
01
Ridding vehicles – whether cars, buses, or trucks – of the need to burn fossil fuels eliminates emissions coming from the obsolete tailpipe of an EV and improve vehicles’ energy efficiency performance
02
Electrification through clean and renewable power generation eliminates fossil fuel emissions completely.
In Europe, the electromobility-driven demand for electricity is expected to increase by 200TWh, accounting for approximately 5% of total demand by 2030. But how do we handle so many electricity-intensive machines connecting to an increasingly distributed and variable grid?
Increased clean power generation for transport decarbonisation
2000
2021
2030
2035-2040
Essential 3: Grid management
Grids need to be reinforced. A good rule of thumb: for every €1 invested in clean energy, 50¢ should be invested in the low-voltage grid. Ensuring that we develop our grids is essential for a more modernised, digitalised and decentralised energy system complemented by the expansion of electromobility.
But EVs are also a solution. Vehicle-to-Grid (V2G) technologies present electric car owners an arbitrage option to store the variable renewable generation in a car’s battery when the grid cannot utilise it and sell it back during peak hours when energy demand threatens supply. Enabled by smart charging stations, this nascent technology yields a high potential to alleviate load congestion and create energy savings for consumers. A recent study by IRENA indicates that V2G can reduce grid reinforcements costs by 10%.
With this and other smart systems, clean power has an outlet for storage, transport has a speedway to decarbonisation and grids have another tool to help them manage peaks. But this will require significant cross-sectoral cooperation.
European total electricity demand for EV charging, by charger type (TWh)
The more charging infrastructure we install, the greater the demands on the electricity grid
No Data Found
Source: EY analysis – EV Charging Infrastructure Forecast, February 2023
Essential 4: Charging infrastructure
Today there are over 470,000 publicly accessible charging points in Europe. By 2035, we will need at least 2 million. The challenge is that 71% of all charging points were concentrated in just five European countries – France, Germany, Italy, the Netherlands, and the UK.
Meanwhile, 10 European countries have less than one charge point for every 100 kilometres of road, according to the European Automobile Manufacturers’ Association (ACEA).
Source: EU alternative fuel infrastructure”, European Alternative Fuels Observatory, European Commission, accessed 15 February 2023
Our report shows that the lack of public charging infrastructures is the first concern for consumers wishing to switch to an electric car. To ensure European e-mobility success, we need to guarantee hassle-free cross-border travel with EVs through even distribution among the Member States.
An overwhelming share of charging will also take place at home or in the workplace (above 80%), so there must also be a focus on connecting charging infrastructure to the grid where it is needed most. Right now, optimised EV charging determines the cheapest time for EVs to charge, creating an incentive for owners to shift their energy consumption to price signals. This demand-driven flexibility helps lessen the risk of overloading transformers or transmission lines and mitigate the costs of grid upgrades.
Essential 5: Digitalisation for consumer acceptance
The other essentials are underlined by the fact that unless consumers feel comfortable making the switch to electric, there will not be a full turn to e-mobility.
“Driving an EV is an entirely different ballgame to driving an ICE vehicle. You’re dealing with kilowatt hours, not gallons or litres. You don’t fill up at a designated location, but charge at home, in the street, wherever you park, whenever you want. It requires a very different mindset. People are not yet aware of the possibilities; they don’t know what the new system will look like in the future. But whatever it looks like, it must work for the customer.” – says Andrew Horstead, lead analyst at EY.
Supportive regulation, better vehicle choice, improved range, shortened charging times and better understanding of e-mobility technology are winning over customers. So, too, is the environmental argument. For the first time, more than 50% of car buyers want their next purchase to be electric or hybrid. The challenge is now to reach the mass market.
Innovation and current value-added solutions like smart charging, financial benefits, digital tools and interoperability will be vital to this paradigm shift. To be relevant to consumers, e-mobility must be affordable, simple, seamless and frictionless, while being powered by data that optimises, monetises and maximises the customer experience.
Source: Adapted from CERRE energy data sharing the case of electric vehicle (ev) smart charging (cerre.eu), EY analysis
Essential 6: Skilled labour
Although they require fewer workers to manufacture, an electric engine requires vastly different skill sets than a traditional internal combustion engine motor. To design and roll 130 million EVs off the production line by 2035, manufacturers will need workers with the requisite skillsets to make that happen. The European battery industry alone will need 800,000 qualified workers by 2025.
This means re-skilling and upskilling those already in the sector and recruiting from parallel sectors to fill the gaps An electrician can now learn how to fix an electric car or maintain cities’ charging infrastructures.
Many companies are teaming up with technology partners, universities, community colleges, industry experts and learning platforms to design tailored training offers. Governments, however, must get behind this educative effort too. Investment in apprenticeships, retooling and retraining, as well as recognised qualifications, are fundamental to making this transition happen.
Source: EY analysis
These challenges are also opportunities.
All these challenges can be translated into opportunities as well. The opportunity to develop secure supply chains for the energy transition. The opportunity to roll out sustainable energy sources en masse. The opportunity to foster more efficient and effective grid management. The opportunity to connect new parts of Europe to a more interconnected grid. The opportunity to drive new digital products and embryonic technologies’ to full scale. The opportunity to shape consumer sentiment and learn how to cater to their changing needs. And the opportunity to drive new jobs and skills to the people of Europe.
The benefits of getting this equation right are clear. A decarbonised road transport sector powered by clean and renewable electrification would not only drastically lower overall emissions, but also improve European cities’ air quality, reduce noise pollution, and enhance Europe’s energy independence from polluting fossil fuel imports.
The stakes are high but the willingness to find solutions is higher.
OUR POLICY RECOMMENDATIONS
Ensure resilient supply chains
2. Foster recyclability, sustainability and responsible extraction as well as consideration for environmental and social impacts through international cooperation.
3. Support research and development (R&D) for alternative battery technologies, improve the efficiency and performance of batteries, and ultimately reduce the overall cost of electric cars production.
Decarbonise
power supply
2. Establish a clear national target for renewable energy deployment, as well as stringent measures for national governments’ compliance with specific targets for electric cars to become the biggest consumers of renewable energy.
3. Increase investment in R&D for the grid of the future, including energy storage technologies, smart charging infrastructures and optimised EV charging to improve performance and reduce peak demand.
Expand charging infrastructures
2. Streamline permitting and approval processes to reduce delays in installing charging infrastructure.
3. Incentivise businesses to install charging stations, beyond cities, in areas where there is a lack of infrastructure and along major highways needing DC fast-charging stations.
Develop smart grid technologies
2. Encourage vehicle-to-grid technology to push and pull low-voltage electricity current to and from connected vehicles when demand threatens supply, or even to balance the electricity grid.
Improve customers’ experience with digitalisation
2. Harmonise open protocols to support a neutral and seamless data exchange between different stakeholders in the electromobility eco-system, such as manufacturers, charging point operators, and utilities.
3. Invest in the creation of a digital twin for the grid to improve electricity networks’ efficiency, performance and smart capabilities as a way to make the entire energy system more intelligent, and hence create better services for consumers.
Upskill
workforce
2. Offer tax incentives to companies investing in employee training and upskilling.
E-mobility is a shared vision. One that is only possible if policymakers, regulators, energy companies, charge point operators, payment providers, technicians, data gatherers, automakers, software creators, and the relative supply chain converge to provide the structural components – or as we call them the enabling essentials of e-mobility. Together, they will make EVs work in a functional, efficient, and sustainable way, so that people benefit from the energy transition, irrespective of geographic location or income demographic. Eurelectric is committed to this vision and will continue to facilitate cross-sectoral knowledge sharing across Europe with its EVision Business Hub.