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Contents

executive summary ...... 1 introduction: beVs and electrification ...... 2 What’s preventing eVs from being profitable? ...... 3 Proposed strategies for beV success ...... 9 beV profitability? it’s going to take time ...... 11

Exclusive insight from:

• Jonathan Storey, director, Automotive Reports • Manuel Sattig, i Project manager, BMW • Tomoko Blech, representative, CHAdeMO Association Europe • Calvey Taylor-Haw, managing director, Elektromotive • Dr Andreas Schamel, director of global Powertrain, research and Power engineering, Ford • Gloria Esposito, head of Projects, Low Carbon Vehicle Partnership • Cosmin Laslau, mobile energy analyst, Lux Research • Luke Tonachel, senior Vehicles analyst, energy & transportation Program, Natural Resources Defences Council • Olivier Paturet, general manager, Zero emission strategy, Nissan Europe • Selda Gunsel, Vice President of global Commercial technology, Shell • Greg Archer, Programme manager – Clean Vehicles, Transport & Environment

Can battery EVs ever be profitable? automotiveworld.com 3 Executive summary

Executive summary

• battery electric vehicles (beVs) have failed to achieve sales anywhere near busier when gm’s bolt goes into production, followed by a reported eV the levels required to meet some of the ambitious targets set by oems and version of the opel Karl and tesla’s model 3 global leaders at the start of the decade; renault-nissan's Carlos ghosn promised 1.5 million eVs by 2020; angela merkel called for 1 million eVs on • government incentives are a proven route to encouraging faster beV the roads in germany by 2020; and barack obama called for 1 million eVs adoption and market growth on us roads by 2015 • infrastructure improvements are essential to encourage beV sales, including • one of the biggest financial hurdles that car manufacturers have to overcome a greater number of recharging stations, more consistent plug standards and in terms of making a profit with beVs is the cost of the battery itself; however, wireless charging technology in public spaces batteries are becoming more affordable, with some experts claiming a current cost reduction rate of 25% per year • the dramatic fall in global oil prices in the second half of 2014 - and the associated fall in consumer fuel prices - is likely to have a major impact on • luxury cars are currently the most lucrative market for beVs as oems can the business case for and interest in beVs; the true impact will be reflected factor the high cost of production into the vehicle’s premium consumer price in the 2015 calendar year sales figures for beVs tag • in addition to falling fuel prices, and continuous improvements in internal • oems are also pursuing mainstream success with a number of C-segment combustion engine (iCe) technology, fuel cell technology presents a genuine beVs; the Ford Focus electric, Kia soul eV, Volkswagen e-golf and the bmW threat to beVs; there is a renewed general interest in fuel cell vehicle technology, i3 compete with the well-established nissan leaf. and the segment will get spurred on by the launch of fuel cell vehicles by honda, hyundai and toyota

Can battery EVs ever be profitable? automotiveworld.com 1 Introduction: BEVs and electrification

Introduction: BEVs and electrification

electrification is widely seen as an inevitable part of future mobility. Whether two key factors holding the market back are range and infrastructure. this entails part-electrification, like mild hybrids or cars with range-extending technology, or full electrification, will depend on a number of factors, including electric cars are much more expensive to produce than those using iCes – oem corporate strategy, regulation, government incentives and fuel prices. electric components, notably batteries, usually raise production costs to around double the cost of equivalent car with an iCe. this cost is inevitably passed on regardless of the potential that internal combustion engines (iCes) have to to the consumer, or simply absorbed into the overall strategy of the oem. in improve efficiency, a degree of electrification is expected to be essential to meet many cases, oems have accepted these losses in the knowledge that they are increasingly stringent fuel economy standards around the world. but with a huge ultimately better off selling costly electric cars than being lumped with the hefty array of options for applying electrification to passenger cars, the automotive fines incurred due to a lack of compliance with fleet-wide emissions targets. industry will not decide on one dominant electric technology in the foreseeable future. instead, the market will become an arena for several different types of thus, making a profit with an expensive-to-produce beV continues to be electrified powertrain. targeted by development teams. it is therefore crucial to examine the problems that car manufacturers must address when trying to market a profitable beV Pure electric options are among the most commonly discussed, perhaps due to and assesses whether passenger cars using these powertrains will ever their complete independence from the vast infrastructure built around iCes. become profitable. using exclusive insight from leading executives from oems, however, there are many limitations that have so far prevented battery electric suppliers, consultants and trade associations engaged with the electric vehicle vehicles (beVs) from taking a meaningful share of the market. market, this report addresses the question of whether beVs can ever be profitable.

Can battery EVs ever be profitable? automotiveworld.com 2 What’s preventing EVs from being profitable?

What’s preventing EVs from being profitable?

Cost barriers aside from the problems with range and refuelling infrastructures for eVs, the high cost of producing beVs poses a major challenge for oems. Cosmin laslau, mobile energy analyst at lux research, explains that one of the biggest financial hurdles that car manufacturers have to overcome is the cost of the battery itself. the general metric for measuring battery cost is us dollar per kilowatt hour (us$/kWh). “as an oem you probably want a battery that can deliver 50 kilowatt hours inside your car,” says laslau. “right now, it costs around us$400/kWh for most oems. that means you need a us$20,000 battery pack just to give you a decent driving range. most cars cost about us$20,000, so you're effectively doubling the price of your car.” Tesla Gigafactory rendering and projected figures however, laslau does anticipate battery cost decreasing: “it will change over time due to greater volumes and, in part, due to dedicated scale up and price reduction rate. “they are coming down by about 25% per annum at the localisation efforts like the tesla gigafactory,” he says. “a battery production moment,” he says. “that's going to ramp down because they’ll reach a point facility of that scale, a magnitude larger than ever seen before, will help reduce where they can't make them any cheaper, but it's a huge game changer.” costs. The OEMs get plugged in “We're still never going to get to a place where oems really want the battery to be, but we'll get to a place where it's cheap enough to compete with some lower so far with beVs, the tried-and-tested route has been via the luxury car market, priced vehicles. a great example of that is the bmW i3, against which tesla is where consumers with more to spend can afford to invest in an expensive car, going to compete directly with its upcoming model 3. both will be around the therefore covering the high costs that would otherwise have to be absorbed by us$35,000 - us$40,000 price point. that's still not cheap, but it is better than the car manufacturer. however, a number of oems are also aiming to produce what tesla has had so far.” electric cars in other segments. With its i series, bmW hopes to create an entire range of electrified vehicles ranging from affordable to luxury. bmW has already Calvey taylor-haw, managing director at elektromotive, agrees that the cost of launched the full-electric i3 and plug-in hybrid sports car i8, and according to batteries will improve substantially, and offers an optimistic estimate about their manuel sattig, bmW i Project manager, all “i” cars are profitable.

Can battery EVs ever be profitable? automotiveworld.com 3 What’s preventing EVs from being profitable?

“bmW has embraced eVs as a different lifestyle means of getting from a to b,” says taylor-haw. “bmW positions them very differently in its showrooms, whereas some of the other oems position them as just another car.

“if you can get the volumes up and the price of producing the cars down, then that may well be the solution. if you go down the route that bmW has taken – that is, to build a car from the ground up, using lightweight plastics and carbon fibre and brand new manufacturing processes, the battery price comes down and those cars become cheaper at the manufacturing end to build. they can make them in high volumes and therefore make more profit on the car. that may offset their loss in the servicing further down the line.”

according to tomoko blech, a representative of Chademo association europe, “Cost reduction through high volume production is the most effective way to do BMW i3 so, as eV production requires a great deal of capital investment. to achieve this, oems will need to bring to the market eVs that are attractive to a great many “the i3 and i8 are the book-ends,” says sattig. “We’re looking at potentials in potential eV users.” between, above and below. the mission is very clear: we will go on after i3 and i8. and our idea is to enlarge the bmW i family.” gm has already made a move into electrification with the Chevrolet Volt, explaining how bmW’s electric cars were able to make instant profit when they and a commitment to have 500,000 entered the market, sattig says, “We had a very clear investment strategy. of electrified vehicles on the road by course, every car project we do at bmW needs to be profitable. We are taking 2017. this target includes mild investment into the future. since 2007, investment in bmW i has been absorbed hybrids, such as cars with stop-start each year into the entire bmW balance sheet, which means being so successful technology. and at the 2015 detroit in the years 2010, 2011 and 2012 made it very easy for us to absorb all those auto show (naias), gm unveiled not investments. therefore, with every bmW i3 we sell, we’ll earn money.” only its second-generation Chevrolet Volt, but also the Chevrolet bolt in december 2014, bmW confirmed that it will electrify its entire model range, by concept, a battery eV with a 200 mile Chevrolet Bolt making its edrive technology available for plug-in hybrid versions of all bmW cars. range and a price tag of around us$35,000; the bolt is expected to go into production in 2017. While this is not directly relevant to a report on battery eVs, it does have various implications for battery eV sales and technology; firstly, it gives bmW customers Chademo’s blech: “oems will need to enlarge their eV product portfolio in a taste of vehicle electrification, and secondly, it helps bmW spread the cost of order to serve the needs of various consumers. they will also need to work on electrification technology development. taylor-haw believes that bmW has the performance improvement and cost reduction of eV products. in terms of right approach: by selling its electric cars as aspirational, lifestyle vehicles and collaboration, oems should by all means continue to work together to share the producing them in higher volumes to lower costs, it has proved that there is profit charging infrastructure to the extent possible for the convenience of users and to be made. for cost efficiency.”

Can battery EVs ever be profitable? automotiveworld.com 4 What’s preventing EVs from being profitable?

Better incentives could drive BEV adoption

the countries where beVs have Government incentives are essential. There needs to be a been most successful are those push from public office to incentivise the arrival of EVs, where strong government but it needs to be combined with a number of non-financial incentives exist for e-mobility. one “ or direct adoption incentives from customers of the world’s most successful electric cars, the nissan leaf, has performed especially well in - Oliver Paturet, General Manager, Zero Emission Strategy, Nissan Europe norway, where it was one of the top-selling cars in 2013 and 2014. Nissan Leaf norwegian eV drivers are gloria esposito, head of Projects at the uK-based low Carbon Vehicle rewarded both financially and Partnership (lCVP), also believes that incentives are fundamentally important practically for adopting a car that produces zero emissions; eVs can travel in bus to increasing the market share of electric cars, again citing norway as the prime lanes, for example, bypassing congestion. example of what rewarding initiatives can achieve. “robust government policy has a critical role to play in helping to increase demand for electric vehicles,” in other countries, state, regional and municipal authorities can offer monetary esposito says. “this is at both national and local level. Financial and non- and non-monetary incentives to help encourage people to adopt eVs, such as financial incentives are important to kick-start the early eV market. if we take the ability enter low emission zones in areas with high levels of air pollution. norway, for example, sales of eVs have reached 5% of the car market, compared to 1% in rest of the eu. this is down to the introduction of various olivier Paturet, general manager, Zero emission strategy at nissan europe, government policies such as attractive grants to lower the cost of eVs, zero road believes that support from governments is one of the most important factors for tax, free parking and access to bus lanes.” the growth of the eV market. a multi-faceted approach seems “government incentives are essential,” Paturet stresses. “there needs to be a to prove effective, says push from public office to incentivise the arrival of eVs, but it needs to be Chademo’s blech: “a combined with a number of non-financial or direct adoption incentives from combination of eV purchase customers. in norway, there is a great balance between the two: for top down, subsidies or preferential tax there’s a very good level of incentives and from the bottom up, there’s been a treatment, regulations to very early adoption of electric vehicles.” encourage eV adoption, as well as public deployment of eV indeed, financial incentives alone will not be enough to win over a new charging infrastructure, priority generation of beV drivers. “there are so many more intelligent incentives on eV lanes and introduction of car- eVs than just paying a subsidy,” agrees bmW’s sattig. “of course, from our side sharing schemes in urban areas, Electric priority lane concept by Studio Roosegaarde the product and the service we deliver need to be good enough to be absorbed just to name a few. in terms of anyway, but we don’t mind subsidies or incentives to support us at the very regulations, grid-eV connection requirements should be properly laid out and beginning.” deregulated in order to encourage eV adoption.”

Can battery EVs ever be profitable? automotiveworld.com 5 What’s preventing EVs from being profitable?

A need for infrastructure... “Probably the biggest challenge is just having consistent standards,” says laslau. “not having a single, consistent standard for charging is really hurting the Without the right infrastructure to support them, experts agree that beVs will not customer experience. there’s also the issue of reliability and inconsistent be able to reach their full potential as profit-making, greenhouse gas (ghg)- payment standards. if you’re planning your cross-country trip and you need that reducing vehicles. While gasoline and diesel both have widespread station to work, a malfunction could seriously damage the customer experience. infrastructures in which drivers can easily refuel their vehicles and access other it is a similar problem if your card for one charging service doesn’t work at a necessary services, the same cannot be said for beVs - yet. With a limited different charging station.” number of charging points available, the range anxieties that dominate discussions around e-mobility remain prevalent, meaning that hybrid options Do we really need plugs? are continually seen as a better option than pure electric cars. in order to get around the problem of inconsistent charging standards, “a key concern for consumers has been range anxiety and the lack of public infrastructure providers including Qualcomm have developed wireless charging electric vehicle charging infrastructure,” says esposito. “this matter is being systems that only require an eV driver to park their vehicle above an energy addressed by various governments internationally through the installation of source for it to be charged. this not only negates the need for travelling with slow and rapid charging points at a variety of public locations and on motorways. several plugs to ensure charge point compatibility; it also improves the driver’s a consequence of the advancement of battery technology will be an experience as it prevents them from having to physically plug in their cars. improvement in the energy density of batteries. this should assist in increasing the range of beVs and improving consumer confidence over time.” Proponents of wireless charging say that taking the plug away makes the charging process much easier, increasing the likelihood of a driver boosting a bmW’s sattig believes that the challenge of creating a sustainable infrastructure car battery with shorter charges of five to ten minutes - something they would for eVs has not been properly addressed. “the need for a viable ecosystem was be less likely to do that if they had to plug in every time. Qualcomm, for example, underestimated at the beginning,” he says. “there was the idea that everything believes the deployment of public infrastructure becomes easier as there is no would come into place quickly, but in reality it has taken longer than expected need to install charging bollards. to develop the necessary charging infrastructure and the beV technology.”

...and a need for standards

a wide variety of technology exists that can support electric cars, but it has not always been deployed in the most sensible way. For example, lux research's laslau believes that using different plugs for eV charging around the world is a flawed system, and a mistake CHAdeMo plug BMW inductive charging that will take time to resolve.

Can battery EVs ever be profitable? automotiveworld.com 6 What’s preventing EVs from being profitable?

We need plugs – many more plugs Chademo and Combined Charge standard (CCs) connectors. of great significance is the outcome of the eu directive for alternative fuels infrastructure despite the wide variety of options that are available to governments for embracing such multi-system chargers. endorsed by the eu, in addition to the introducing a viable electric vehicle infrastructure, many experts do not believe ardent support from the eV users, multi-system chargers have become the de that e-mobility will be sufficiently supported for electric cars to be profitable in the facto standard for fast chargers sold in europe today.” near future. dr andreas schamel, director of global Powertrain, research and Power engineering at Ford, says that he views hybrids as the most likely option in January 2015, at the Washington auto show, Volkswagen and bmW due to the infrastructural challenges that continue to affect beVs. announced an initiative to build ‘express charging corridors’ along popular routes on both the east and west us coasts. the ‘corridors’ will include level 2 charging “i see a much brighter future for significant electrification in the sense of a plug- stations and fast charging solutions, both of which will be delivered by in hybrid, where you get the best of both worlds,” says schamel. “you have local ChargePoint, a third partner in the initiative and the world’s biggest eV charging emissions-free driving and a decent range. it means the city commute is entirely network supplier. feasible, daily commutes from plugging in at home are perfectly doable, but you still have a versatile, all-capable vehicle when you need it. i view plug-ins as initially, the plan is to create approximately 100 direct current (dC) fast chargers being a much more natural customer pull success vehicle than the full eV.” across both coasts. however, ChargePoint’s Chief executive, Pasquale romano, hinted that this figure is flexible, suggesting there may be potential for Chademo’s blech adds the voice of the infrastructure side of the business: developing more charging stations further inland: “our goal at ChargePoint is to “other than for users that need long distance travel on a daily basis, we believe get everyone behind the wheel of an eV and provide eV charging everywhere that electric cars can be a valid replacement option for iCe cars, as long as a they go.” full battery can provide an autonomy of close to 300km and the fast charging infrastructure is in place. there are two main barriers: the battery cost and the eV charging infrastructure deployment. With regard to the battery cost, it is demonstrably decreasing and realisation of the iCe parity, where the sum of initial and running costs of an eV is equivalent to that of iCe vehicles, is a matter of time. For the fast charging infrastructure deployment, the development of multi- system chargers is paving the way for the coexistence of different charging protocols that used to be considered exclusive rivals. almost all fast chargers these days are multi-system, CCS connector equipped with both

Can battery EVs ever be profitable? automotiveworld.com 7 What’s preventing EVs from being profitable?

Would you like ICE with that? regardless of the innovations in electric vehicle technology, most experts agree that the iCe will still be around for many years to come. this is not only because I see a much brighter future for significant electrification consumers have grown accustomed to the act of refuelling their empty tanks in the sense of a plug-in hybrid, where you get the best with gasoline or diesel – according to Ford’s schamel, there are still significant “ improvements to be made that will allow iCes to meet increasingly stringent of both worlds. You have local emissions-free driving standards and deliver notable emissions reduction. and a decent range

“electrification and alternative propulsion systems like fuel cells will play a role - Dr Andreas Schamel, Director of Global Powertrain, Research and Power Engineering, Ford in the future, but that transition will not happen overnight,” comments schamel. “there’s nothing wrong with burning Cng in a combustion engine, and nothing wrong with burning liquid fuels in diesel or gasoline engines. it is a sustainable that for consumers to buy more electric cars, a cultural shift will need to take pathway, very affordable and very flexible in terms of using the available hold. this could begin by introducing more e-mobility to public transport. infrastructure.” “the iCe has been around for over 100 years,” says esposito. “We are looking it is unsurprising that car manufacturers continue to back history’s most popular at quite a huge change in technology and mindset here. not only is the driving fuels; oems’ production and marketing strategies are commonly built around experience different, so is the method of refuelling the vehicle. iCe architectures and their strong relationships with suppliers of more traditional fuels. selda gunsel, Vice President of global Commercial technology at shell, “Consumers need time to adapt and familiarise themselves with new driving believes that while the powertrain environment will continue to diversify, behaviour. increasing the opportunities for consumers to experience beVs is increased electrification does not mean the end of the iCe. important, and this can take place via increased access to eVs in cities such as electric buses, taxis and car clubs.” “We recognise that by 2050, two thirds of the vehicles on the road will likely use advanced iCes,” says gunsel. “therefore, we need smart innovations fostered rather than attempting to monopolise the industry with electric cars, it is more by partnerships in the industry to find ways to improve fuel economy and reduce likely that oems will be targeting specific applications with specific e-mobility emissions by improving existing technologies. strategies, according to greg archer, Programme manager – Clean Vehicles at lobby group transport & environment (t&e). “hybrid, electric and natural gas engines are being developed. the energy challenge we are facing is very big, so we believe that there is not a single “it’s almost impossible to predict which technology will come to dominate, or, solution. We have to work on all these solutions and we have to look at a diverse indeed, if any technology will come to dominate,” says archer. “it may be that portfolio of solutions to meet the energy challenge.” we see different technologies dominating in different market segments. it will depend upon how the technologies improve and how their costs come down. Leap of faith looking out at least another 20 years, you’re looking at a multi-powertrain environment with electrics, plug-in hybrids, conventional vehicles, hybrid and moving away from traditional iCe cars and towards less familiar electric hydrogen vehicles all competing to a greater or lesser extent in different technologies requires drivers to be willing to change. lCVP’s esposito accepts market segments.”

Can battery EVs ever be profitable? automotiveworld.com 8 Proposed strategies for BEV success

Proposed strategies for BEV success

Shared vehicle schemes Government incentives one way to introduce (potential) consumers to electric cars is to encourage “in the short term, governments should be looking at encouraging e-mobility shared vehicle schemes. t&e’s archer believes that the industry should be rather than simply trying to encourage people to buy electric cars. if they were focused on spreading the benefits of electric vehicles in this way, as it will mean to do that, i think you’d see a big growth in e-mobility, without necessarily that cars spend more time on the road. needing to sell huge numbers of electric cars to deliver a very good level of zero carbon mobility.” “What governments need to do is to move the focus away from trying to get people to buy electric cars and get the focus on to integrating e-mobility into esposito agrees that oems should offer greater flexibility to potential beV other forms of public and private mobility,” says archer. “i think there’s huge drivers so that they can experience the benefits of driving an electric car without potential for eVs in terms of shared use schemes, in the way that we’re seeing having to buy one outright. “oems could offer consumers innovative means of with drivenow in germany and owning a beV through flexible financial solutions,” she says. “instead of the autolib’ scheme in Paris. consumers having to purchase a vehicle, they could offer consumers leasing options and the opportunity to borrow a vehicle with a longer range when they “these are the opportunities wish to go on longer journeys. this could make beVs more affordable more for electric cars, because their quickly, thereby increasing demand and production.” high capital costs are offset by their lower running costs. olivier Paturet explains that nissan’s successful approach to selling beVs has therefore, they can be more involved forming government-funded partnerships to actively grow the commercially viable. For most infrastructure for electric vehicles. “We have a number of strategic partnerships private car users, your car is co-funded by the european union,” he explains. “this includes a number of FP7 stationary for 95% of the day. projects [the 7th Framework Programme for research and technological you just don’t get enough value development in europe, with a budget of over €50bn], including green emotion, out of it to be able to a european Commission-led eV promotion initiative. green emotion looks at appreciate the lower running the success factors for the introduction of eV passenger cars, and there is a costs of the vehicle. if you’re in freight vehicle equivalent too. nissan is a project leader on an at&t rapid a shared use arrangement, Charging network project, which is looking to deploy a multi-standard eV then clearly that vehicle is charging infrastructure in the uK.” being used for a much higher Autolib, Paris proportion of the time.

Can battery EVs ever be profitable? automotiveworld.com 9 Proposed strategies for BEV success

Improved infrastructure and the battery pack costs are going to fall in price dramatically,” says lux research’s laslau. “if you look at vehicles like the Ford Focus eV or the Fiat luke tonachel, senior Vehicles analyst, energy & transportation Program at 500e, these are compliance vehicles. they're only making a couple of hundred the us natural resources defences Council, shares the belief that improving of them for California to meet regulations. they're not making a serious push and infrastructure is important for incentivising greater beV sales. “there’s a they're essentially sitting on the sidelines until technology gets cheaper. tremendous opportunity to better align vehicle charging with electricity generation,” tonachel suggests. “electric utilities should be required to establish “that's fine, although they could be losing some early mover advantages. For programmes, such as variable rate structures, that encourage people to charge example, the toyota Prius is iconic. When you think of hybrid, you think of toyota. at times that are most beneficial to the grid, avoiding stress on components and What essentially was a money losing effort initially is now paying dividends. but providing electric vehicle owners with the cheapest electricity. With proper rates, if you're just concerned about making money, then yes, just wait until the eV owners should be fuelling up their batteries at the equivalent of us$1 per technology gets cheaper. Wait until 2025 and eVs will be a lot more compelling gallon of gasoline. such low operating costs shorten the payback of an eV to develop and to sell.” compared to conventional internal combustion vehicles.” For those oems keen to make profits in the beV market, laslau recommends Lower-cost, higher range batteries that pursuing the luxury car market is still the most likely route to success. “some of the players decided they're going to try to make this as affordable as possible, and that meant cutting corners in terms of quality,” he reflects. “you'd be having other experts believe that for eVs to be profitable, the best thing that oems can an economy car which should cost us$10,000 to us$15,000, but because of do is simply wait for batteries to become more affordable. “Wait five or ten years the expensive battery pack, it's more like us$30,000 to us$35,000.”

Nissan Leaf battery pack Ford Focus EV

Can battery EVs ever be profitable? automotiveworld.com 10 BEV profitability? It’s going to take time

BEV profitability? It’s going to take time

While infrastructure and range remain limited, and battery costs remain high, it is unlikely that the beV market can be profitable. however, the growth potential OEMs will need to enlarge their EV product portfolio in is exciting, with some forward-thinking oems having shown that money can be made with the right approach. “i believe beVs will succeed once the upfront order to serve the needs of various consumers. They will cost of an eV reaches parity with iCe vehicles,” says esposito. “Countries need “ also need to work on performance improvement and cost to develop a network of charging points combined with improved public reduction of EV products awareness and acceptance of beVs. at the moment, there is insufficient demand for eVs, hence low sales globally. - Tomoko Blech, representative, CHAdeMO Association Europe

“however, the market is slowly growing. analysis of provisional car sales data in Ford’s andreas schamel concludes that while electrification has significant 2013 supplied by the european environment agency shows the sales have potential, it will be a long time before beVs compete directly with iCes. “i think approximately doubled annually since production vehicles were first marketed in they will ultimately be a profitable offering, but within the near or mid future they 2010. in 2013, nearly 50,000 plug-in vehicles were sold in the eu, representing are not an alternative to the versatility of the bread-and-butter passenger car around 0.4% of all cars.” that most people buy,” schamel states. “they will be absolutely valid in special applications – for example, in congestion zone situations where anything that While esposito thinks that beV sales forecasts over the last five years have been creates local emissions is locked out. there will be a number of niche markets overly ambitious, she explains that the market’s biggest stumbling block, the high for battery electric vehicles, but i can’t really see where they fit in diesel territory.” cost of batteries, is becoming less of an issue as development progresses. “the dominant factor influencing beV price is the cost of producing the lithium battery,” Paturet’s forecast suggests that while more conventional technologies will still she says. “however, the price of lithium batteries is forecast to drop quite sharply dominate, beVs will make impressive strides within the decade. “the view at by 2020, which will assist in lowering the purchase costs of beVs.” nissan is that zero emission eVs or beVs will probably represent about 10% of the industry by 2020. While it’s a long way from making 50% or 70% of the market, whether you want to qualify 10% as niche is another matter. in certain instances however, the 10% barrier could be met and surpassed for the urban environment.”

Our goal at ChargePoint is to get everyone behind the wheel tonachel’s final advice for oems and their suppliers is to continue their of an EV and provide EV charging everywhere they go investments in innovative electric driving technologies. “second-generation eVs are coming to market that have increased efficiency and range without adding “ costs, which is the right path to be on,” he says. “electric drive is the future for - Pasquale Romano, Chief Executive, Chargepoint better efficiency and lower emissions. We expect eV sales to grow steadily into the next decade and beyond.”

Can battery EVs ever be profitable? automotiveworld.com 11 BEV profitability? It’s going to take time

Notwithstanding the fact that in “ most markets where BEV sales are gaining traction their purchase price is subsidised by the state, my best guess is that during those five years, no major player will be making a commercially viable return on BEVs

- Jonathan Storey, Director, Automotive Reports

Tesla Model S

Can beVs make money? Clearly, there are scenarios under which this is a beV, and that beVs are becoming increasingly viable substitutes for possible, says automotive industry consultant, Jonathan storey, adding that the conventional iCe models in some segments. the big question for the long term likelihood of such favourable scenarios materialising has been boosted by the is whether that pool of consumers will continue growing or whether demand positive market reception for high-end models like tesla's model s and bmW's will leak away to fuel cell vehicles. Five years hence, the answer to that question i3. and in the mass-market sector, sales of nissan's leaf are estimated to have should be apparent.” been approaching 60,000 units in 2014. storey concludes with a note of caution for battery eV stakeholders: “eV critics will see their position buttressed by the fact that sales have “notwithstanding the fact that in most markets where beV sales are gaining undershot the levels forecast by eV promoters, continuing a 40-year tradition traction their purchase price is subsidised by the state, my best guess is that of such under-performance,” says storey. “however, it seems fair to say that during those five years, no major player will be making a commercially viable there is a growing pool of consumers prepared to contemplate the purchase of return on beVs.”

Can battery EVs ever be profitable? automotiveworld.com 12