The EV Market of Tomorrow

The electro-mobility market is growing at a rapid pace. Numbers suggest, that by 2030 there will be about 200 million electric vehicles (EV) [1] on our roads. Since such a growing market offers various lucrative opportunities, plenty of players are joining the market in order to get their slice of the pie, i.e. start-ups with new business ideas, cross-sectoral collaborations, mergers and acquisitions (M&A) as well as joint ventures are all shaping the EV market of tomorrow.

In order to get an overview of the trending topics and buzzwords in the e-mobility industry, we have made an effort to cluster and analyze the market over a twelve-month period, ranging from October 2017 to September 2018. This analysis included more than 3000 headlines of the German electrive.netnewsletter and additional data from other sources like the European Parliament. The following infographic shows the findings that should give a first hint at the trending topics in the e-mobilitymarket.

The Electric Vehicle Market of Tomorrow Infographic

Our findings show that the community is developing the EV experience of tomorrow by concentrating efforts on two main factors: First, drivers want to be able to use EVs that fulfill their mobility needs as well as well-developed charging station infrastructure must be provided to allow for seamless travel. We identified three main trends that are shaping how the industry is tackling those challenges.

When taking a closer look at the current development of EVs it can be stated that the driving experience of EVs is rapidly increasing and challenges that hinder the mass adoption of EVs are constantly being tackled[2]. Our findings show that heavily decreasing production costs per unit[3] and the increase of range capacity[4] are the primary factors for the astonishing increase of EVs on the road. Taking into consideration the announcements made by original equipment manufacturers (OEM s), a further rapid increase in the quantity of EVs can be expected. Chinese OEMs aim to produce about seven million EVs by 2025, the Renault-Nissan-Mitsubishi-Alliance around four million by 2020 and the Volkswagen Group two to three million by2025[5]. Our findings also show that collaborations, acquisitions or joint ventures between various players in the value chain are another crucial factor, influencing the attractiveness of EVs. Besides the increase in quantity, there will be an increase in quality and user experience as numerous companies test different approaches in autonomous driving and convenient charging services. This supports our first identified trend that vehicles will not only be a means of transport in the future, but they will also become a whole new service (MaaS).

This development is further enhanced by partnerships and joint ventures of OEMs and industry experts in Internet-of-things (IoT) services to develop for instance connected and autonomous vehicles. However, such collaboration does not only take place in the research, development and manufacturing of EVs but also in the charging infrastructure for EVs. Cross-sectoral partnerships and M&As lead to an increasingly intertwined and consolidated charging infrastructure market, the second big trend that we’ve identified. The acquisition of NewMotion, supplier for EV charging infrastructure, by the oil and petrol multinational Royal Dutch Shell is just one example. Within this dynamic environment, the market is not yet dominated by a small number of players but is still in the process of establishing itself. This gives room to different approaches for solving the technical challenges ahead. In the case of charging infrastructure this might include plug types, communication protocols or different backend systems.

Even though the great potential of the market attracts various players with different core competences and from different sectors, this development comes along with several downsides, particularly leading to a highly fragmented market (our trend three). In Germany for example, there are about 12,500 charge points operated by more than 700 different entities. Many of them make use of different methods for accessibility and payment (RFID, Credit/Debit Card Reader, Smartphone Apps etc.) and other technology operating out of sight for the end-user (backend systems, communication protocols etc.). These cause trouble when using the existing infrastructure or even becoming an entry barrier for potential new users as many industry standards still need to be agreed upon.

As a summary we try to give you a first interpretation of the three trends we’ve identified (we invite you to further interpretations and discussions in the comment section): At a first glance the second trend, market consolidation and the third trend, fragmentation may sound contradictive, however both are complementary of one another. For example, in the case of charging infrastructure, we need multiple large-scale networks to add further charging stations to each platform to extend coverage and to reduce the overall costs. However, we will not see a single charging network being able to combine all the charging stations worldwide as, in the end, charging is a very local problem. The EV drivers’ need to charge along their route or exactly at their intended destination, and not make a detour to reach the next station of their respective charging network. To achieve the Mobility-as-a-Service future, which trend one is proclaiming, we need to continue establishing seamless access to all charging infrastructure and adding convenient payment solutions like direct car payments. Let’s jointly work on this together.

[1] based on the 2BDS scenario of IEA Global EV Outlook 2017

[2] Statista Mobility Market Outlook — Trend Report

[3] https://www.statista.com/statistics/617815/average-international-car-battery-pack-price/. Lower battery prices + more production volume + economies of scale = lower production costs per unit

[4] https://de.statista.com/statistik/daten/studie/443614/umfrage/prognose-zur-reichweite-von-elektroautos/

[5] Statista Mobility Market Outlook — Trend Report

 

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