Despite mature technology and better cost structures, production forecasts for electric vehicles (EVs) and plug-in hybrid vehicles (PHEVs) are gloomy. That is the conclusion of the latest E-mobility Index by Roland Berger Strategy Consultants and Forschungsgesellschaft Kraftfahrwesen mbH Aachen (fka) for Q1 2013.
The index compares the competitive positions of the seven leading car-manufacturing nations (Germany, France, Italy, US, Japan, China and South Korea) in the field of e-mobility. Technology, industry and market are analyzed in detail.
The index shows that making EVs is still financially unappealing for OEMs. "OEMs earn much lower margins on the sale of EVs than on regular cars," says Wolfgang Bernhart, Partner at Roland Berger Strategy Consultants. "The total cost of ownership of EVs over their useful life is much higher than for conventional vehicles."
The resulting extra cost of making electric and hybrid vehicles dissuades OEMs from mass-producing them. This is a problem that will hit the e-mobility market even harder if further US fracking projects go ahead. "Extracting oil by fracking could stabilize the oil price over the next few years, " says Roland Berger Partner Thomas Schlick. "This would make the cost disadvantage for alternative drives even worse."
Battery safety and better infrastructure still key challenges
Battery safety also has a big impact on e-mobility development. The lithium ion batteries usually used in EVs can explode or burst into flames when damaged. "Battery makers have to sort out this safety problem fast with innovative security concepts, not rely on rigid, heavy safety structures as they did before. That is the only way to make sure safety is not detrimental to efficiency," explains fka Senior Engineer Markus Thoennes.
The lack of e-mobility infrastructure is another problem. The limited range of EVs will probably not improve until sometime after 2020, when more efficient storage technologies come onto the market. "E mobility cannot become part of public or personal mobility unless there is a comprehensive recharging infrastructure in place," Bernhart says.
Germany currently has some 2,200 public recharging points. But the goal of the National Platform for E-mobility is to have 150,000 public recharging points in place by 2020, plus another 7,000 rapid-recharging points and some 800,000 personal recharging points in people's garages, for example. But to reach this target, private investors still need attractive business models. Only joint, lasting commitments by the government and business can ensure more EVs are used nationwide.
Technology – Industry – Market: Rankings for each of these categories
The experts from Roland Berger and fka analyzed the seven most important carmaking countries in the categories of technology, industry and market. The resulting rankings were as follows:
Technology: South Korea is still the leader in technology, although the vehicles announced are not yet in showrooms. Germany comes a close second, having greatly improved EVs' value for money. By contrast, the US is becoming less competitive, with total EV sales falling and expensive models becoming more relevant. In all countries analyzed, public subsidies for e-mobility R&D are decreasing. The only exception is China, which is investing some EUR 7.7 billion in current programs.
Industry: Japan is still top of the industry ranking, but due to declining production forecasts for EVs and battery cells, the country is slowly losing ground. Between now and 2015, Japan will manufacture 283,000 electric and hybrid vehicles. South Korea, in particular, is gaining ground in the industry – the country is expanding its production of vehicles and batteries. Germany and France, too, are boosting their car production forecasts. But overall, EV production is declining worldwide. Due to market consolidation, future cell production will mainly be limited to Japan and South Korea. Experts expect cell production of over 7,000 MWh in Japan and over 4,200 MWh in South Korea by 2015, while Germany will play only a minor role in battery production with just over 200 MWh.
Market: The proportion of electric and hybrid models among total new car sales has risen slightly in recent months but is still tiny in the respective countries. Japan leads the pack, as the programs that ran until the end of 2012 have had a positive effect. China, South Korea and France, by contrast, have boosted subsidies for EVs to help e mobility achieve a breakthrough.
