The future is electric

In the upcoming years, electro mobility will gain further traction and eventually replace combustion engine vehicles. Daimler is responding to this challenge with its new EQ brand.

In the upcoming years, electro mobility will become a mass phenomenon. Judging by the current situation, this statement may seem foolish, as electric vehicles comprise only a small niche in most countries and achieved a global market share of only 1.1 percent in the past year.

However, Norway provides a window into what the not-too-distant future of electro mobility could look like; in June, for the first time, more electric vehicles were registered than conventionally powered cars (53%). Many experts agree that by 2040 electro mobility will have penetrated the most important markets and relegated combustion engine technology to the fringe.

Mineral oil companies are also adjusting their figures

A study by Bloomberg New Energy Finance (BNEF) found that electric vehicles will surpass combustion engine models in terms of global sales before 2040. Even the OPEC countries, in spite of their interest in providing as many conventionally driven vehicles with fossil energy as possible, have revised their figures upwards. A year ago, countries producing crude oil estimated that there would be 46 million battery-electric vehicles by 2040. Now they have revised this figure to 266 million vehicles, which would mean a reduction in daily production of crude oil by eight million barrels—one million barrels more than Saudi Arabia’s exports daily, on average.

Mineral oil companies have also corrected their figures upwards. Shell calculates there will be 100 million electric vehicles in the year 2040, whilst BP believes there will be 71.4 million. In fact, Shell has gone a step further and has joined the association CharlN e.V. (Charging Interface Initiative e.V.). The goal of this initiative is for the Combined Charging System (CCS) to become the global charging standard. In the Netherlands the company has started installing rapid-charging stations at selected gas stations, together with the company Allego, to build a uniform charging network.

The brand will comprise a complete automotive ecosystem, ranging from cars to charging facilities and services, as well as energy storage units for homes

Daimler will serve this future market with the newly created technology and product brand EQ. Catering to the mobility requirements of its customers is only one aspect; the brand will comprise a complete automotive ecosystem, ranging from cars to charging facilities and services, as well as energy storage units for homes. The first EQ vehicle, an SUV Coupé, will be market-ready in 2019. By 2022, ten more electric models will follow. Furthermore, Daimler plans to gradually electrify its range of models through partial electrification by integrating a 48-volt on-board electrical system and ISG/RSG. An intensive roll-out of further plug-in hybrid vehicles is also planned. The first series model featuring a fuel-cell drive system and plug-in hybrid technology was presented this year at the International Auto Show (IAA) in Frankfurt.

The prices for lithium-ion batteries are going to drop sooner and faster than most people expect.

Colin McKerracher, Bloomberg analyst

According to experts at Bloomberg, sinking production costs will lead to the rapid expansion of electric vehicles. ‘It’s pure and simple economics. The prices for lithium-ion batteries are going to drop sooner and faster than most people expect,’ Bloomberg analyst Colin McKerracher explains. Since 2010 the prices for lithium have dropped by 73 percent. At the same time, Bloomberg experts anticipate battery manufacturers to come up with further innovations, which will cause prices to drop further over the next two decades. Based on these estimates, a battery which cost $1,000 in 2010 will only cost $73 by 2030.

Experts estimate that the prices of electric vehicles and combustion engine models will align in as little as eight years

Based on the current trajectory, experts estimate that the prices of electric vehicles and combustion engine models will align in as little as eight years. According to the study, these developments will result in a global fleet of some 530 million vehicles by 2040. At the same time, the energy required to operate this fleet will also increase accordingly. By 2040, it will reach 1,800 terawatt hours, which constitutes a 5 percent share of the global energy demand. Last year, the global energy demand was six terawatt hours. Additionally, the global battery production, which currently amounts to 90 gigawatt hours, will triple to 270 gigawatt hours in the year 2021, according to researchers’ studies. However, the authors of the study still fear that infrastructure problems could hamper the expansion of electro mobility up until the mid-2030s.

Global demand

In the next 25 years, China, USA and Europe—the most important markets, currently—will drive the demand for electric vehicles. India is also planning a new energy policy, in which battery-electric vehicles will play a central role. Here, the share of electric vehicles is supposed to reach 100 percent on the subcontinent by 2020. ‘India could be the first country of its size to operate 100 percent electric vehicles,’ Piyush Goyal, the Indian minister for Energy, Coal and Renewable Energies, said. Bloomberg expects a market share of 67 percent in Europe and 58 percent in the USA for these models. In China the experts expect a share of 51 percent. However, according to Bloomberg expert McKerracher, ‘the next six to eight years will be decisive. If sales do not meet expectations during this period, some cost reductions will not materialise, which would affect the development as a whole.’

In Germany electro mobility is also becoming more accepted. According to a survey carried out by the management and technology consultancy BearingPoint, two-thirds of all respondents would consider buying an electric car. However, many people feel they do not have sufficient information to make a decision, which explains the current reluctance. Besides the infrastructure being inadequate, the range being ostensibly insufficient and high vehicle costs, those interviewed criticise the lack of a uniform paying system above all.

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