Identifying and Addressing the Challenges to Mainstream Electric Vehicles

In the past few years, governments and carmakers set ambitious goals for electrification. Governments have introduced incentives such as lower-emission zones, emission limits, and aggressive goals to ban the commercialization of internal combustion engine (ICE) vehicles in the next decade. Meanwhile, carmakers announced an estimated US$515 billion in investments in Electric Vehicles (EV)-related technologies within the next five to ten years. Still, despite consistent growth, EVs only made up for 4.2% of new vehicle sales in 2020. The disparity between electrification efforts and EV sales poses the question: What hinders wider EV adoption?

ABI Research found that, from a customer perspective, the lack of accurate range information, limited access to home charging, and a below-par public charging experience are the main obstacles preventing mass EV adoption. Inefficient power allocation and storage are bottlenecks from a grid perspective. Finally, carmakers struggle to reduce production costs and consequently EV prices, largely due to the use of ICE electrical/electronic (E/E) architecture and little use of electric components to improve battery efficiency.

Range Anxiety: Range anxiety, i.e., the fear that the EV battery will run out of power before the vehicle reaches its destination, was the primary concern of prospective EV buyers, justified by the limited range of easily EVs. Today several mass-market models offer a range above 200 miles. Still, range anxiety remains the primary inhibitor of EV adoption. Rather than a battery technology issue, which still has room for improvement, range anxiety is presently driven by the unreliability of carmakers' range metrics.

Charging Anxiety: As public charging infrastructure expands, and the EV market matures, consumers' focus is shifting to the pain points on the charging user experience, including charging speed, charge point findability, reliability, and interoperability. Today, carmakers offer a sub-par user experience that forces drivers to rely on several different applications, with different levels of reliability, from different vendors that are often not linked with their in-vehicle embedded navigation systems or phone navigation apps. While early adopters are more tolerant of these flaws, they must be addressed to bring EV into the mainstream.

Grid Capacity: The challenges that EVs posed to the grid today are not related to the amount of power produced (the energy produced in advanced countries is enough to support EV expansion until at least 2030 without grid expansion) but how energy is distributed, stored, and managed. Germany, for instance, wastes 6,500 gigawatt-hours yearly from energy generated mainly on windy days by its turbines in the North and Baltic Seas due to insufficient storage capacity.

Home Charging: While not an issue when EV ownership was a prerogative of wealthier drivers living in self-owned detached houses that could accommodate a charger, home charging will become a critical obstacle to mainstream EVs when ownership filters down to drivers living in rented houses, apartment blocks, and houses with no fixed parking space.

Price: As most EVs available today fall within the luxury and premium categories, the higher production costs have not been an impediment. However, with the automotive industry moving towards a fully electric future and the sales ban of ICE vehicles in the next decade, carmakers must bring costs down for mainstream EVs.

A good EV user experience depends on accurate journey range estimation with constant visibility of the battery reach and available and compatible charging points on the way. To address range and charging anxiety, carmakers and mapping and navigation software developers must partner with charge point operators (CPOs) and e-mobility service providers (eMSPs) to bring charge point data and EV routing in-vehicle and to companion app interfaces. An integrated and seamless EV-centric experience inside the vehicle and other touchpoints such as the smartphone can drive loyalty in existing drivers and instill trust in electrification in prospective EV buyers. Fast charging solutions, such as battery buffered DC chargers or even battery swap, along with dynamic price models, are efficient solutions to decrease charging time (critical in long journeys) and tackle congestion in charging stations.

From a grid perspective, utility companies must use input from energy management platforms offered by eMSPs for better planning and distributed energy resources (DERs) (i.e., small-scale electricity generation and storage devices), including EV batteries via bi-directional charging (V2G), for efficient energy allocation and storage. By distributing the load more evenly between the grid and DERs, utility companies can foster renewable energies and save costs on grid expansion. The US Federal Energy Regulatory Commission (FERC) Order No. 222, issued in September 2020, paves the way for that by enabling aggregations of DERs to compete on a level playing field in the wholesale markets operated by regional grid operators.

The easiest and most affordable way to address the home charging challenge is by expanding the public Level Two (L2) charging infrastructure into residential areas and places where vehicles sit parked for most of the day. Additional measures include V2G players funding charging points in exchange for the V2G revenue home charger sharing platforms and legislation, which will require wider availability of V2G-enabled vehicles. The UK, for instance, will mandate new residential and commercial buildings to install EV chargers from 2022.

Pricewise, carmakers can significantly reduce productions costs by implementing E/E architectures optimized for EVs (e.g., centralized and zonal architecture). The lower ECU count and interconnection wiring system reduces BoM and weight, inherently improving battery range and preventing investments in bigger batteries. Moreover, the reduced design complexity facilitates the automation of the assembling process. Additional electronic components, such as Battery Management Systems (BMS), can also improve the efficiency of existing batteries while providing more accurate range estimation to final consumers. Furthermore, new business models that separate vehicle and battery (e.g., battery subscriptions or Battery-as-a-Service (BaaS)), can lower the price entry point and make EVs more price competitive.