The big EV collaborations

According to e-mobility consultants PRTM, the lifetime cost of ownership of EVs will be be less than that of conventional ICE cars for the first time by 2017.

2017 is effectively the tipping point therefore for the EV market, the date by which time regulation, price, technology and business models should be driving the market, rather than incentives. 

Working back from this date, we should now be starting to understand the market and see the partnerships being put in place that will enable this to happen.

And we are. We can see alliances being formed, with announcements by:

•  Volvo and Siemens
• General Motors and LG Chem
• GM and SAIC
• VW and Sanyo
• Smart with  BASF
• Fisker with BMW
• Toyota and Ford
• Daimler and Renault-Nissan 
• Toyota and  First Automobile Works 
• PSA (Peugeot-Citroen) and GE 
• Ford and Changan Automobile Group
• and Coda and Great Wall. 

These companies have the financial clout to make things happen on the key vehicle, battery, charging and leasing areas, and although we may not see the results for a couple of years, it is another clear sign that the market is moving.

There have been many calls for charging infrastructure in what is portrayed as a chicken and egg scenario. When they examined the charging infrastructure market, PRTM predicted that an average of 1.3 chargers will be needed per EV by 2020 - combination of home, work and public infrastructure, a cumulative investment of $50 billion. A lot of investment, but not significantly more than the single home charging unit that each electric car will require. In other words, a solvable challenge.

According to PRTM's estimates, a 70% plus utilsation rate will be required for profitable operation of public charging stations however. With high consumer price sensitivity, high investment and operational costs, low margins (typically 10% - 11% EBITDA) and long payback periods (7 - 10 years), this means that new business models with better technologies, lower costs, flexible pricing, scaleable deployment and bundled added value services will be required. This in turn will almost certainly drive out the smaller local players unless they have a clearly identified and protectable niche. The risk is too high, the return is too long. 

To me, this looks like we are now starting the second phase of the EV market. The first phase, typified by the start-up technical explorers and innovators, is giving way to the established automotive, power, energy and hi tech companies as they enter the market and pick their partners. 

This should fast forward technological innovation and bring the much needed price reductions that will ensure market maturity by the end of this decade.