Today, there are 5m electric vehicles (EVs) on the world’s roads, up by 2m from 2018, with China representing the largest EV market followed by Europe and the US.
Large scale commercial production of EVs by the big car makers is unlikely to take off until 2025.
Technological advancements are leading to substantial cuts in battery prices with major enablers being R&D in battery chemistry and scaling up of battery production for EVs in manufacturing.
GlobalData’s latest theme report, ‘Thematic Research: Electric Vehicles in Utilities’, highlights that the fall in battery prices is due to the economies of scale in the EV market with battery factories across the world up-scaling their EV battery production.
The fall in battery prices has, in turn, benefited the battery energy storage market and hastened the deployment of energy storage projects globally.
Power utilities use energy storage technologies in a range of applications such as time-shifts and supply capacity to meet the demand-supply gap efficiently.
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The EV value chain
Sneha Susan Elias, senior analyst of power at GlobalData, said: “Power companies are showing increased interest in EV programmes.”
EV schemes typically offer discounts and rebates on the purchase of EVs or charging equipment, free smart charge installation, along with EV time-of-use plans (on-peak and off-peak rate plans) for EV owners.
Increasingly, power utilities are collaborating with EV manufacturers to boost their offerings in areas such as EV charging, vehicle-to-grid (V2G) services, energy storage and renewable energy sources.
GlobalData’s report also found that V2G systems enable plug-in EVs, particularly their batteries to play a major role in balancing energy demand and supply and leads to a two-way power flow between an EV and the electricity grid.
Elias added: “Through this V2G concept, plug-in EVs could be used together with electricity storage during emergency conditions or extreme events such as supply shortages, for supplying power back to the electricity grid. Power utilities such as EDF, E.ON and Enel, are involved in V2G pilot or demonstration projects, either by itself or through partnerships.”
French utility giant EDF recently unveiled DREEV, a joint venture between EDF Pulse Croissance and Nuvve, a California-based green energy company, for the development and deployment of V2G technology.
EDF Group plans to operate around 4,000 smart electric charging points by 2020, according to a statement.
M&A deals are also behind the rising deployment of EVs worldwide. Recently, Engie, the French utility company, bought the British EV public charging network operator ChargePoint Services (CPS). The acquisition will boost Engie’s existing EV capabilities and set up Engie as an EV infrastructure company in the UK.
Another announcement came from energy provider Shell New Energies, with its acquisition of Greenlots, a leader in providing EV charging and energy management software and solutions in the US.
As a wholly-owned subsidiary of Shell, Greenlots is expected to strengthen Shell’s North American growth efforts and enable global expansion of its mobility services across utilities, cities, automakers, fleets and drivers.
Electric vehicle supply equipment (EVSE) deployment is also on the rise. China holds the top position in terms of EV charging infrastructure. Most of China’s publicly announced EVSE targets came from state-owned utilities. The State Grid Corporation of China (SGCC) recently announced a target of 0.12 million EV charging points by 2020 and China Southern Power Grid (CSG) aims for 25,000 for 2020.
Among automakers, SAIC Motor is planning for 20,000 EV charging points by 2020, while other players such as BAIC and NIO are aiming for 4,100 battery-swapping stations.
The US is also ramping up the installation of EV charging infrastructure by offering incentives in more than half of US states. Recently, the United States Senate Committee on Environment and Public Works, through S. 2302, America’s Transportation Infrastructure Act, consented to $1 billion in funding for EVs and natural gas, along with hydrogen-powered vehicles.
Governments across the world are keen to boost EV uptake and are offering incentives and subsidies for EVs, with the ultimate aim of decreasing dependence on fossil fuels and enhancing energy efficiency.
Also, stringent fuel-economy standards and regulations on carbon emissions, low- and zero-emission vehicle mandates, and other measures, such as a limitation on the circulation of internal combustion engine (ICE) vehicles, depending on their emission performance, have led to an increase in EV deployment.
Elias concluded: “In April 2019, the European parliament agreed to a tightened CO2 emissions reduction target of 37.5% and 31% by 2030 for new cars and new vans respectively. This is a boost to the previously adopted CO2 standards in 2017, which required new vehicles to decrease CO2 emissions per km by 15% in 2025 and 30% in 2030.
“In the US, the federal government along with several states provide financial incentives, including tax credits, for decreasing the up-front costs of EVs.”
The GlobalData study also reported the Chinese government has proposed a new energy vehicle (NEV) credit mandate, which sets a minimum requirement for the car sector regarding the production of NEVs, these include battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs) and fuel cell electric vehicles (FCEVs). The NEV credit mandate is 10% starting in 2019 and increases to 12% for 2020.
In India, in February this year, the union cabinet consented to a scheme known as ‘Faster Adoption and Manufacturing of Electric Vehicles in India, Phase II (FAME India Phase II), for boosting the country’s electric mobility.
Under this scheme, the government aims to provide support for around 10 Lakhs electric-two wheelers (e-2W), 5 Lakhs electric-three wheelers (e-3W), 55,000 four-wheelers (4Ws) and 7,000 buses. The scheme also aims to put in place around 2,700 EV charging infrastructure across metropolitan centres, smart cities and cities in mountainous Indian states.