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Article on Electric Vehicles demand and supply issues

The Rise of Electric Vehicles

I have an electric vehicle and there is a real inquisitiveness from people who ask  – “What do you think of it? How far can you go? Is it easy to charge?... the EV market is growing rapidly as adoption becomes more common. Last year there were over 2 million electric vehicles on the road. This figure is predicted to rise to 20 million by 2020, and 70 million by 2025. According to analysis by the Energy and Climate Intelligence Unit in the UK, electric car sales could outstrip diesel cars this year.

A Greener Future

Electric cars mark a monumental milestone in creating a greener, more sustainable future. Electric produce far less carbon emissions so don’t contribute as significantly to climate change, a massive concern in current developed Nations given the levels of toxicity in many of our urban areas.

Global car manufacturers are making major steps in the right direction, focussing development on environmentally-friendly vehicles; Volvo have promised that all new models will have an electric motor from 2019, Honda have pledged that all of their European models will be hybrid or fully electric from this year, Hyundai have said that by 2020 over 50% of their models will be powered by batteries, and Jaguar Land Rover have announced that all new launches will now be electrified to some degree. Tesla, who were key innovators in the electric car design, are now onto the development of a 100 kWH battery pack for their models S and X.

Environmental concerns are driving the legislative process: Norway will be banning the sales of new fossil fuel based cars by 2025, France and the UK have said the same by 2040, and Paris, Madrid and Mexico City have all said they will ban diesel vehicles in their city centres by 2025.

The charging Infrastructure network and supply

Massive opportunities lie in the charging infrastructure market. More charging points will be needed. Currently, there are 115,000 electric cars in the UK and 13,000 charging points spread across 4,500 locations and increasing. As the number of vehicles increases, charging facilities will have to follow suit, so the government are contributing £200m to a £400m fund to upgrade the electric car-charging infrastructure, as well as setting aside a further £40m for research and development into charging technology.

Many questions remain, such as are manufacturers paying lip service at the moment to EV’s? They have systems and processes set up for fossil fuel powered vehicles and massive investments in plant. We are in a period of change, and balancing the demand from consumers, legislative constraints and supply from manufacturers, particularly when they have vast numbers of produced diesel and petrol cars to sell, is not easy.

Are Car suppliers and dealers really on board?

With the mass of conflicting press that the industry is generating, it’s easy to see why consumers remain confused. Are diesel models a good investment? How reliable is the electric market going into the future? EV’s are expensive compared to their traditional counterparts, but will the cost of electric models lessen over the next few years? How will this change the price and supply of electricity? This latter question is a major factor for electricity production and distribution.

Also dealers are incentivised by two things – one to shift the backlog of diesel and petrol cars, and secondly they are worried there will be little requirement for dealer servicing from EV’s. Simply plugging the cars operating system into a laptop to conduct a service requires very little new parts and labour and hence diminished service plans and revenues. You may find when you visit a car dealer to enquire about an EV, you don’t get a quick response!

The Future of the Industry, and the Demand for Talent

That said, electric cars are destined to play a huge role in transforming our transportation, reducing emissions and creating new jobs. With new models and new designs come the need for new skills and expertise: people with the ability to engineer the cars of the future. The industry will need new technicians able to maintain the new models. A growing electric car industry will also generate new jobs within batteries and software companies. Whilst these newer roles will require a new breed of skills, old knowledge is not entirely redundant, especially in the hybrid market.

To contact Macallam, call 01423 900804


News posted: 24/06/2019 by Duncan Carter

+44 (0)1423 900804

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