Constant changes in modes and means of transport affect us all. Technological progress changes not only how we move from one place to another, but also the way goods reach us, how manufacturers acquire parts for these goods, and how the raw materials for these parts are hauled to suppliers. This profound transformation of trade will bring about a restructuring of the world economy, and a redrawing of the competitive landscape.
Looking to the future, PwC Hungary’s experts consider it important to show the way and give guidance to the widest possible range of stakeholders regarding this transformative change in mobility. In this series of articles, drawing on our expertise in digital & technology, automotive, energy and electromobility, we examine the key drivers behind the change in mobility and present our vision for the future of mobility. We hope to broaden our readers’ perspective and prepare them for the changes ahead.
In order to gain insight into the future of mobility, let’s consider the following example.
The year is 2030. Kate, 21, is a university student who uses public transport, or occasionally when she’s in a hurry, car sharing. On a weekday, she would like to get to her university at the far end of town, so she decides to use car sharing for a faster commute. Through the car-sharing app on her smart phone she finds there is a vacant self-driving electric car nearby, and she makes a booking. The car then picks her up at the specified address, greets Kate, sets the destination through voice commands, and calculates the exact travel time by communicating with traffic lights and sensors. During the 20-minute ride, Kate can surf the internet, chat, prepare for her class online, or stream the latest episode of her favourite sitcom through the on-board entertainment system. During the trip, Kate receives information online about another prospective passenger bound for the same destination, so the car offers her a discounted fare is she shares the ride with the new passenger. The new passenger’s profile is shown on the on-board computer screen – and Kate’s profile on the passenger’s smart phone – so they can even see each other’s areas of interest to identify potential conversation topics. Meanwhile, the car displays a list of local sights, restaurants, cafés and their daily specials. After arriving at her destination, Kate closes her booking and rates the trip, which allows the service provider to continually improve the service. Kate will not have to deal with payment, as the app automatically charges the fare to her registered bank account.
The car stores traffic data while driving, and at the end of the ride queries a cloud database about free parking spaces nearby, which is based on sensor readings. The car then independently finds the closest available parking space, parks itself, and waits for the next booking. During the day, the car receives a notification that the peak power consumption period has begun, and when the car is idle, it can discharge power back into the grid when demand peaks. After a few days of continuous service, when the car has driven nearly 600 km on one charge, the high-capacity battery is depleted and must be recharged. This can be accomplished within minutes at electric vehicle charging stations via inductive charging.
Some may doubt the viability of such an autonomous electric ecosystem, even amidst today’s rapid technological progress. This is hardly surprising, as no matter how much electromobility and self-driving vehicles are now in vogue, the underlying technologies are still in their infancy.
By the end of 2016, more than 1.2 million all-electric vehicles were on the roads, which is 0.2% of the total number of cars worldwide. PwC’s report “eascy – The five dimensions of automotive transformation” estimates that by 2030 the number of vehicles in Europe will decrease from 280 million to 200 million, and of newly registered cars, 55% will be all electric and 40% will be hybrid, and only 5% will be equipped solely with an internal combustion engine. The above report links the advancement of self-driving technologies to the spread of electromobility, and anticipates that by 2030 four out of ten kilometres will be travelled by self-driving cars.
Although electric cars with state-of-the-art battery technologies (such as the Tesla Model S) had a maximum range of 540 km in 2017, most electric cars today have a 150 to 200 km average (and actual) range on a single charge. This limited range is still the biggest concern when it comes to electric vehicles, so it is crucial to deploy a charging network with nationwide coverage. Technical capabilities such as charging speed are also important. At present, nationwide coverage of charging networks varies from country to country. There are few countries that have accomplished this (e.g. Norway), but the number of charging stations is increasing all over Europe, so nationwide coverage will soon be realised in other countries as well (e.g. Germany).
The large-scale use of electric cars depends on the extent of coverage provided by the charging infrastructure, faster charging technologies, significant reductions in the cost of electric drive systems and batteries, and the steady availability of materials required for battery manufacturing, and a change in automotive culture. As these factors also influence one another, we can expect a comprehensive transformation of the automotive industry.
The large-scale spread of e-mobility and the realisation of the above vision require an adequate support system, a drop in the price of electric vehicles, and a higher level of consumer awareness. Electromobility has to go through the following three main phases of development – from the emergence of innovators committed to championing new technologies until a solid market structure is in place – so that Kate and others can enjoy the benefits of electric vehicles in 10 to 30 years:
Hungary is currently between the first and second phases. In comparison, the United States, Germany and China are in the second phase, with China having sold more electric vehicles in 2017 than the rest of the world combined, while Norway is one of the few countries edging close to the third phase.
In the above scenario, we talked as much about electric cars as about charging stations and other infrastructure required to support them. This is because we consider electromobility as both a complex system and an industry whose state of development can be examined along three main pillars: grid-enabled vehicles, charging networks, and the underlying IT services. These three pillars, together with the regulatory and business environments specific to each country or region, are what we mean by electromobility.
By tracing Kate’s decisions concerning urban transportation, our series of articles is intended to stimulate discussion about e-mobility and the future of electric vehicles.
This series will give readers an overview of the current state of electromobility, and provide a glimpse into a possible future.
Manager, PwC Hungary