impact of ict r&d on the deployment of electric vehicles
Post on 11-Sep-2014
449 views
DESCRIPTION
The European Commission, Directorate-General for Communications Networks, Content and Technology(DG CONNECT) commissioned AEA to undertake a service contract entitled "Impact of ICT R&D in the Large Scale Deployment of the Electric Vehicle”. This project'saim was to collate and analyse the growing body of knowledge in European efforts for the application of ICT and smart systems in fully electric vehicles (FEVs) to support policymaking in this area. The project started in November 2011 and is approximately one year in duration. The objectives of this project were to: A. Analyse the existing landscape of European R&D, manufacturing and deployment in the domains of ICT and smart systems and architectures for the fully electric vehicle, and draw comparisons with other world regions; B. Assess the future potential for these domains within Europe, and the enabling role of ICT and smart systems in the deployment of the fully electric vehicle; C. Identify barriers and hurdles to development and deployment of the fully electric vehicle in Europe, drawing on experience from trial deployments to date, and evaluate roadmaps towards overcoming these hurdles; D. Assess the environmental and health impacts of the deployment of electric vehicles compared with other types of vehicle, assess weaknesses and threats, and evaluate the role of ICT and smart systems in bringing about potential environmental and health benefits; E. Analyse the potential contribution of the fully electric vehicle towards achieving European socio-economic goals; F. Collate the above work in order to provide policy advice on European strategies for R&D in the area of ICT and smart systems for the fully electric vehicle, in particular for R&D “lighthouse” projects to accelerate the development and deployment of electric vehicles in Europe.TRANSCRIPT
Digital
Agenda for
Europe
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
Summary Report
FINAL REPORT
A study prepared for the European Commission
DG Communications Networks, Content & Technology
This study was carried out for the European Commission by
AEA Technology plc
The Gemini Building, Fermi Avenue, Harwell IBC, Oxon
OX11 0QR
www.aeat.co.uk
Internal identification
Contract number: 30-CE-0450923/00-51
SMART 2011-0065
LEGAL NOTICE
By the European Commission, Communications Networks, Content & Technology Directorate-General.
Neither the European Commission nor any person acting on its behalf is responsible for the use which
might be made of the information contained in the present publication.
The European Commission is not responsible for the external web sites referred to in the present
publication.
The views expressed in this publication are those of the authors and do not necessarily reflect the official
European Commission’s view on the subject.
The Publications Office of the European Union.
© European Union, 2012
Reproduction is authorized provided the source is acknowledged
Reproduction is authorised provided the source is acknowledged.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
Summary Report
Report for the European Commission,
Directorate-General for Communications
Networks, Content and Technology (DG
CONNECT)
AEA/R/ED57083 Ref: SMART 2011-0065 Issue Number 2 Date 05/11/2012
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
Ref: AEA/ED57083/Issue Number 2 iv
Customer: AEA Contact:
European Commission, Directorate-General for Communications Networks, Content and Technology (DG CONNECT)
Matthew Morris
AEA Technology plc
Marble Arch Tower, 55 Bryanston Street, London W1H 7AA
t: 0870 190 2844
AEA is a business name of AEA Technology plc
AEA is certificated to ISO9001 and ISO14001
Customer reference:
SMART 2011-0065
Contract start\end dates:
5th October 2011 – 5
th November 2012
Confidentiality, copyright & reproduction:
This report is the Copyright of the European Commission and has been prepared by AEA Technology plc under contract to the European Commission dated 6
th October 2011. The contents of
this report may not be reproduced in whole or in part, nor passed to any organisation or person without the specific prior written permission of the European Commission. AEA Technology plc accepts no liability whatsoever to any third party for any loss or damage arising from any interpretation or use of the information contained in this report, or reliance on any views expressed therein.
Authors:
Matthew Morris, Duncan Kay, Dan Newman, Lena Ruthner, Gena Gibson, James Norman, Stephanie Cesbron, Charlotte Brannigan
Approved By:
Nikolas Hill
Date:
05 November 2012
Signed:
AEA reference:
Ref: ED57083- Issue Number 2
Disclaimer:
This study has been produced by outside contractors for the European Commission
Directorate-General for Communications Networks, Content and Technology (DG CONNECT
)and represents the contractors’ views on the matter. These views have not been adopted or
in any way endorsed by the European Commission and should not be relied upon as a
statement of the views of the European Commission. The European Commission does not
guarantee the accuracy of the data included in this study, nor does it accept responsibility for
any use made thereof.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 1
Table of contents
1 Project Overview ........................................................................................................ 4
1.1 Aims and Objectives .......................................................................................... 4
1.2 Methodology ...................................................................................................... 4
1.3 Scope ................................................................................................................. 5
2 Summary ..................................................................................................................... 6
3 Objective A: landscape analysis ............................................................................... 9
3.1 The ICT opportunities in the FEV system ........................................................... 9
3.2 The anticipated value chain in ICT for FEVs ......................................................10
3.3 European value chain competitiveness .............................................................14
3.4 The European market for FEVs .........................................................................17
3.5 The FEV industry in other world regions ............................................................18
4 Objective B: the enabling role of ICT .......................................................................20
4.1 Patenting activity in ICT for FEVs ......................................................................20
4.2 R&D investment in the EU and Other Regions ..................................................23
4.3 Technical capabilities ........................................................................................25
4.4 Cross-industry fertilisation .................................................................................25
4.5 Feasibility of EU manufacture of FEVs and components ...................................27
5 Objective C: hurdles and roadmaps ........................................................................30
5.1 Barriers to electric vehicle deployment ..............................................................30
5.2 Solutions to overcome hurdles ..........................................................................34
5.3 Solutions offered by ICT ....................................................................................35
5.4 Roadmaps for FEV deployment ........................................................................36
6 Objective D: environmental and health impacts .....................................................39
6.1 The vehicle life cycle .........................................................................................39
6.2 Life cycle analysis for present-day vehicles .......................................................42
6.3 Future developments in environmental & health impacts ...................................43
6.4 The role of ICT in the environmental & health impacts of FEVs .........................45
6.5 The role of FEVs in decarbonising the European transport sector .....................46
7 Objective E: analysis of socio-economic impacts ..................................................48
7.1 Qualitative assessment of the socio-economic contribution of FEVs .................48
7.2 Quantitative assessment of the socio-economic contribution of FEVs ...............51
7.3 Socio-economic contribution of potential ICT applications .................................55
8 Objective F: conclusions and recommendations ...................................................56
8.1 Overview of recommendations ..........................................................................56
8.2 Recommended objectives .................................................................................58
Appendices
Appendix 1 Expert interviews
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 2
List of figures
Figure 1: Applications of ICT in the FEV ...............................................................................10
Figure 2: Shifts in the automotive value chain bought by FEVs ............................................12
Figure 3: Evolution versus revolution: two contrasting views on the future of electric vehicles
.............................................................................................................................................13
Figure 4: Automotive ICT for FEVs value chain ....................................................................14
Figure 5: Key competitive strengths of the European value chain for ICT in FEVs ................15
Figure 6: SWOT analysis for European value chain competitiveness in ICT for FEVs ..........16
Figure 7: Comparison of annual sales projections for FEVs in Europe .................................17
Figure 8: Sales projections for electric vehicles across world regions (source: IEA) .............18
Figure 9: Strengths and weaknesses of the FEV industry in other world regions ..................19
Figure 10: High-value EV-ICT patent applications by region of origin, 1998-2008 ...........21
Figure 11: SWOT analysis for European companies and their intellectual property
strategies 23
Figure 12: Sales vs. R&D spend for the top OEMs (data extracted from the 2011 EU
Industrial R&D Investment Scoreboard) ...............................................................................24
Figure 13: Seven success factors for European FEV manufacture .................................29
Figure 14: Resource risks associated with FEVs ............................................................33
Figure 15: Five insights into consumer reaction during field trials ...................................34
Figure 16: The role of ICT in overcoming hurdles to electric vehicle deployment ............36
Figure 17: Comparison of FEV deployment targets from different roadmaps ..................37
Figure 18: Different approaches found in FEV roadmaps ................................................38
Figure 19: Overview of a vehicle lifecycle .......................................................................40
Figure 20: Overview of energy chain efficiency in BEVs (top) compared to diesel ICEVs
(bottom). [Source: adapted from Swiss Federal Office of Energy] .......................................41
Figure 21: External cost for whole life cycle, split by stage in 2015 (€ per 1,000v-km) ....42
Figure 22: External cost for whole life cycle, split by emission type in 2015 (€ per 1,000v-
km) 43
Figure 23: Key factors affecting the environmental and health impacts of FEVs .............44
Figure 24: The role of ICT in improving environmental and health benefits of FEVs .......45
Figure 25: Abatement potential of FEVs under three scenarios (compared with business-
as-usual) 47
Figure 26: European flagship policies considered in this study .......................................49
Figure 27: Qualitative assessment of the socio-economic contribution of FEVs through
development of a strong European FEV market ...................................................................50
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 3
Figure 28: Qualitative assessment of the socio-economic contribution of FEVs through
development of a competitive European FEV manufacturing and service industry ...............50
Figure 29: Comparison of projections for growth in FEV registrations showing AEA’s
SULTAN scenarios ...............................................................................................................52
Figure 30: Quantitative metrics for the socio-economic contribution of FEVs in Europe ..53
Figure 31: Areas for recommended objectives and desired impacts ...............................57
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 4
1 Project Overview
1.1 Aims and Objectives
The European Commission, Directorate-General for Communications Networks, Content and
Technology (DG CONNECT) has commissioned AEA to undertake a service contract entitled
"Impact of ICT R&D in the Large Scale Deployment of the Electric Vehicle”. This project aims
to collate and analyse the growing body of knowledge in European efforts for the application
of ICT and smart systems in fully electric vehicles (FEVs) to support policymaking in this
area. The project started in November 2011 and is approximately one year in duration.
The objectives of this project are to:
A. Analyse the existing landscape of European R&D, manufacturing and deployment in
the domains of ICT and smart systems and architectures for the fully electric vehicle,
and draw comparisons with other world regions;
B. Assess the future potential for these domains within Europe, and the enabling role of
ICT and smart systems in the deployment of the fully electric vehicle;
C. Identify barriers and hurdles to development and deployment of the fully electric
vehicle in Europe, drawing on experience from trial deployments to date, and
evaluate roadmaps towards overcoming these hurdles;
D. Assess the environmental and health impacts of the deployment of electric vehicles
compared with other types of vehicle, assess weaknesses and threats, and evaluate
the role of ICT and smart systems in bringing about potential environmental and
health benefits;
E. Analyse the potential contribution of the fully electric vehicle towards achieving
European socio-economic goals;
F. Collate the above work in order to provide policy advice on European strategies for
R&D in the area of ICT and smart systems for the fully electric vehicle, in particular
for R&D “lighthouse” projects to accelerate the development and deployment of
electric vehicles in Europe.
The project is divided into six work packages, each of which addresses one of the six
objectives.
1.2 Methodology
The study team have the overall task of collecting and collating information from a wide
range of sources, analysing the information and presenting conclusions and
recommendations to decision makers and stakeholders. This is achieved through the
following processes:
Literature review of recent studies, publications and conference notes published by
academic, commercial and public sector sources in Europe and beyond. All literature
sources are fully referenced in this report.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 5
Stakeholder consultation by face-to-face and telephone interviews with key experts,
together with presentation of draft results at workshops/conferences. Further
information on the stakeholder consultation undertaken by the study team is provided
as an appendix to this report.
Analysis and presentation of the results in written reports such as this one, and in
presentations to stakeholders.
1.3 Scope
Fully Electric Vehicles (FEVs)
An increasing range of vehicle types utilise electricity for motive power and electrical storage
systems within their powertrain. This study focuses on ‘Fully Electric Vehicles’ (FEVs). The
project’s definition for FEVs as set out in DG CONNECT’s (formerly DG INFSO’s) 2011
report ‘ICT for the Fully Electric Vehicle’, as follows:
‘Fully Electric Vehicles (FEVs) means electrically-propelled vehicles that provide
significant driving range on pure battery-based power. It includes vehicles having an
on-board fuel based electrical generator (Range Extender based on Internal
Combustion Engine or fuel cells)’.
Furthermore, this study is restricted to passenger cars only. The study team have not
considered smaller (e.g. e-bikes, quadricycles) or larger (e.g. vans, trucks) vehicles.
Information and Communication Technology (ICT)
The particular technology focus of the study is on the role of ICT and smart systems in
the fully electric vehicle. We define ‘ICT’ / smart systems as any system or subsystem
utilising electrical or electronic components. This can include sensors and actuators,
electronic controllers, embedded systems, power electronics, and wireless
communications. Our study investigates the enormous scope for such systems in the
fully electric vehicle.
‘Vehicle-side’ technology
One particular feature of the fully electric vehicle is the potential for innovation and new value
chains in related areas such as smart infrastructure/grids, intelligent transport systems, and
interaction with an ever-increasing ‘cloud’. Whilst our study inevitably considers these
possibilities, the detailed technology focus is on systems and innovations within the fully
electric vehicle itself.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 6
2 Summary
This document summarises the research findings of the six work packages undertaken in this
DG CONNECT-funded project. Each work package also has an individual report that
provides more detail on the research and analysis undertaken. These reports are available
separately.
The project aims to provide substantiated advice on strategy for EU funding under the next
Framework Programme, Horizon 2020. Drawing on the analysis carried out under Objectives
A-E of the project, the study team arrived at twenty recommendations. The following diagram
and tables outline our headline recommendations; more detail is provided in the final section
of this report.
Desired
impacts
Recommended
objectives
ICT
for
FEVs
ICT for
FEVs
Developing
technologies
and services
Supporting
a European
value chain
Stimulating
innovation
in Europe
User
acceptance
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 7
Developing technologies and services
ICT in the fully electric vehicle
1 European OEMs to be amongst the leaders in the development of third
generation ‘ground-up’ designed FEVs with a revised ICT architecture
2
Maintain leadership in the research, development and manufacture of
automotive semi-conductors and power electronics for FEVs
3
Build on an existing strong communications infrastructure to become a world
leader in after-sales software and services, extracting the maximum value
from connected vehicle systems for FEVs
4
Establish a European value chain for the research, development and
manufacture of batteries, their management systems and their integration
into FEVs
5 Develop expertise in energy harvesting technologies
6 Become a leader in the application of vehicle health management for FEVs
Related technologies where ICT can play an important role
7
Become the acknowledged world leader in integrating range extender
technologies into fully electric vehicles, with advanced powertrain control
systems
8
Achieve the successful full integration of FEVs with the electricity grid
through the use of bi-directional smart charging
9 Ensure the environmental impacts of the production and disposal elements
of an FEV’s life cycle are minimised
Supporting a European value chain
1 Assist European OEMs to adapt to the electric vehicle value chain, keeping
inter-company collaboration within Europe to supply ICT in FEVs
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 8
2 Encourage and support innovative SMEs in the field of ICT for FEVs
3 Create regional centres of excellence for key FEV technology areas,
combining research, development and commercialisation activities
4
Address skills shortages in electrical, electronic and mechatronic
engineering disciplines
Stimulating innovation in Europe
1 Create a uniform single market for FEVs, components and services across
Europe by adopting common standards and harmonising incentives
2 Support later stages in the innovation cycle
3 Co-ordinate and streamline public R&D funding at a European and Member
State level
4
Investigate the role of patenting in FEV technology, with a view to
incentivising patenting if necessary
User acceptance
1 Ensure a continued strong development of a European FEV market as a
route to securing a European value chain
2
Develop business models and technologies that reduce the upfront cost
and/or total cost of ownership for FEVs
3 Educate the mass vehicle owner market on the realities of FEV ownership
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 9
3 Objective A: landscape analysis
The aim of Objective A: Landscape Analysis is to provide a picture of the current European
situation regarding ICT and smart systems in electric vehicles, in the context of what is
happening globally in this sector.
Three specific aims were identified within this analysis:
To examine the opportunities that exist in ICT for fully electric vehicles (FEVs), and to
review European commercial activities in this area;
To understand Europe’s current capability and global competitiveness in ICT for the
fully electric vehicle;
To identify where the strengths, weaknesses, opportunities and threats lie for Europe
when compared to other world regions.
3.1 The ICT opportunities in the FEV system
Fully electric vehicles (FEVs) offer multiple opportunities for the application of ICT. In the
drive train alone, sophisticated systems will be needed for battery management, control of
electric motors and their associated power electronics, and management of range extenders
and energy harvesting. This can be achieved using a combination of separate control units,
embedded systems or new centralised architectures. A ‘ground-up’ redesign of the electric
vehicle, particularly the ICT component, could improve functionality and efficiency, reduce
cost and lead to entirely new vehicle concepts.
Electronics has been described as the enabler and driver behind 60% of all current
vehicle innovations1 and other sources suggest that for premium vehicles the figure is
80%.2
Electric vehicles are coming to market at the same time as technologies in other sectors,
which also make extensive use of ICT. The near future will be shaped by what has been
named ‘the internet of things’. Smartphones, tablets, laptops, buildings, personal vehicles
and other mobility solutions will all be connected and will be able to share location, status
and activity information to enable smarter and more efficient use of energy.
1 Oliver Wyman, 'A comprehensive study on innovation in the automotive industry', 2007. Available online at:
http://www.oliverwyman.com/pdf_files/CarInnovation2015_engl.pdf 2 Federal Ministry of Economics and Technology, 'The Software Car: ICT as an Engine for the Electromobility of the Future', 2011. Available
online at: http://www.esg.de/fileadmin/downloads/eCar-IKT-2030_Summary_en.pdf
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 10
Figure 1: Applications of ICT in the FEV
Notes: V2G = vehicle to grid; V2V = vehicle to vehicle; V2I = vehicle to infrastructure
Photo courtesy of GM
3.2 The anticipated value chain in ICT for FEVs
The most significant change in the automotive value chain over the last two decades has
been the impact of the introduction of ICT technologies.3 Customer expectations for high
technology, combined with the need to address concerns regarding range and recharging
availability mean FEVs are likely to have the highest ICT content and connectivity of any
vehicles on the market. ICT for FEVs is therefore likely to see strong growth in value in the
future.
ICT could account for up to 40% of value in a FEV
ICT currently accounts for perhaps 15-20% of the total vehicle value in an FEV. However this
figure could be substantially higher if battery costs reduce (ICT in the battery management
system makes up only a small proportion of total battery cost). Existing batteries add around
€6,000 to €16,000 to the cost of a vehicle, but in the longer-term this could decrease to
around €3,000 to €4,000.4 If this were to happen, it is expected that ICT could account for as
much as 30-40% of total vehicle value in the future.5
3 EC JRC, 'Is Europe in the Driver's Seat? The Competitiveness of the European Automotive Embedded Systems Industry', 2010. Available online
at: http://iri.jrc.ec.europa.eu/papers/2010_JRC60284_WP7.pdf 4 ETC, ‘Environmental impacts and impact on the electricity market of a large scale introduction of electric cars in Europe’, 2009. Available online
at: http://www.europarl.europa.eu/document/activities/cont/201106/20110629ATT22885/20110629ATT22885EN.pdf 5 Figures based on stakeholder interviews
Battery management• Thermal management• Electrical management – cell balancing, monitoring, switching • Failure and crisis management• Diagnostics – state of charge, battery ageing• Super/Ultra capacitor control and integration
Range extender integration• Range extender engine control systems• Optimising integration into vehicle powertrain system
Optimising charging• Optimising charging strategy• Ensuring charging safety• Enabling contactless charging• Billing and payment systems
Powertrain efficiency• Improved inverters / converters• System efficiency &integration• Motor control optimisation
Vehicle diagnostics• Condition-based maintenance• Servicing software
Active load management• Coordination and optimisation
Energy harvesting systems• Optimised energy capture from regenerative braking systems • Optimisation and control of energy recovery from suspension, tyres, solar photo-voltaics and waste heat.
Grid integration (V2G)•Bi-directional charging•Grid communication
Drive by wire / safety• Intelligent cruise control• Autonomous braking systems• Collision avoidance systems• Advanced driver assistance• Dynamic light assist• Pedestrian and cyclist protection systems• Fully autonomous operation
Transport system integration (V2V & V2I)•Cooperative driving•Integration into intelligent transport system
Driver interface• Intelligent routing / navigation• Range management information• Pre-booking recharging infrastructure• Infotainment systems / WiFi / 3G• User definable seating / control feel
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 11
Almost all FEVs will be ‘connected’ vehicles’
Plug-in electric vehicles are expected to lead the way in terms of use of telematics in the
automotive sector. Purchasers of FEVs in the next 5-10 years are likely to be more affluent
and technologically aware. 80% of FEVs are expected to offer connected vehicle telematics
with services such as live traffic information, weather, streaming of information from the
internet and cloud computing.6 Whilst connectivity of all vehicle types is expected to increase,
some connectivity opportunities are unique to FEVs – for example, communications for range
management and the location, reservation and use of charging infrastructure, and managing
the vehicle’s relationship with the electricity grid.
FEVs change the automotive value chain: from mechanics to electronics
FEVs introduce substantial changes in the value chain. The added value associated with the
conventional internal combustion engine and transmission – a key area of strength for
Europe’s OEMs – is significantly reduced or removed. At the same time, FEVs introduce a
new high-value electric powertrain that utilises many technologies outside OEMs’ traditional
core competences.
In an FEV, the battery is key for customer satisfaction
At present, the biggest single cost of a battery electric vehicle (BEV) is the battery itself.
Customer satisfaction will be strongly influenced by the performance of the battery. It is
fundamental to vehicle performance, range, reliability, degradation over time and resale
value. This is unlike the situation with conventional vehicles, in which petrol and diesel fuels
conform to universal quality standards, and owners can expect vehicle performance to be
largely independent of the fuel they use and its storage system (the fuel tank). As a result,
electric vehicle batteries could represent a severe reputational risk for OEMs.
OEMs must decide which key FEV components to bring in-house
The powertrain of a vehicle has traditionally been a key brand differentiator and source of
value for OEMs. Some have argued that for FEVs, this value may shift to battery
manufacturers and other suppliers of electric powertrain components, with global mega-
suppliers selling standardised products to multiple OEMs.7 It is important that OEMs build up
a detailed understanding of electric powertrains in order to ascertain which areas they wish
to develop in-house and which they can safely outsource without risk to their brand.
It is not clear which elements of FEVs will be standardised and which will be bespoke
FEVs could present a change in the balance of using large-scale standardised components
and subsystems and engineering bespoke elements using in-house know-how. It is not clear
which elements of FEVs will be used to differentiate the vehicle, or whether suppliers or
OEMs will provide these differentiating features, but the outcome will help to define the new
value chain.
New participants will enter the automotive sector value chain through FEVs
New participants will be attracted into the automotive sector by the growth in FEVs. This may
be particularly true in three areas:
6 Pike Research, ‘Electric Vehicle Telematics’, 2011. Available online at: http://www.pikeresearch.com/research/electric-vehicle-telematics
7 Deloitte, ‘Charging Ahead: Battery electric vehicles and the transformation of an industry’, 2010. Available online at:
http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/Deloitte%20Review/Deloitte%20Review%20-
%20Summer%202010/us_DeloitteReview_ChargingAheadBatteryElectricVehicles_0710.pdf
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 12
Power electronics equipment and high voltage equipment – companies with
experience in this area will see opportunities given the existing automotive sector’s
inexperience.
Control units and modules – as these become more standardised consumer
electronics companies may be attracted to start supplying the automotive sector.
Low-cost manufacturing countries such as India and China may take an increasing
share of this market.
Vehicle OEMs – designing and developing a BEV requires little of the engineering
know-how necessary for the internal combustion engine powertrain. This reduces the
barriers to entry to this market, although existing OEM know-how in other areas
(design for safety, long-term reliability and understanding the consumer needs)
remains important.
Software and service suppliers – the move towards software- rather than
hardware-based ICT will allow more interaction between different applications within a
vehicle, and combined with enhanced connectivity, facilitate a variety of mobility-
based services. If hardware and software platforms are standardised, new, innovative
players could enter the market.
Figure 2: Shifts in the automotive value chain brought by FEVs
Large
increase
Large
decrease
Energy storage systems – up to 60% of the vehicle value for a BEV
and a key vehicle differentiator (range, charge time etc)
Power electronics and electric motors – with a high ICT content
Connected vehicle hardware and services – possible new after-
market value chains utilising connectivity, with software and services
adding value
Energy harvesting and energy management – enabled by a fully
electric powertrain and high ICT content
Internal combustion engines – still used as range extenders but
increasingly not key brand differentiator. A key strength for European
OEMs
Aftermarket components – FEVs have fewer moving parts and less
mechanical wear. Currently a significant source of income for OEMs
ICEV powertrain – gearbox, transmission etc – does not normally
feature in FEVs
The OEM landscape: Evolution or revolution?
The literature review and stakeholder interviews highlighted differences of opinion regarding
the likely nature of future uptake for FEVs. These can be broadly grouped into two
alternatives scenarios: evolution or disruption. These scenarios are described in Figure 3.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 13
The future is likely to contain elements of both these scenarios, and it will be important for
Europe to ensure that it adopts policies which will allow it to remain competitive regardless of
how the market develops.
Figure 3: Evolution versus revolution: two contrasting views on the future of electric
vehicles
Evolution Revolution
Traditional OEMs continue to dominate,
leveraging their brand power and
gradually moving into the FEV market
OEMs use brand power, experience and
consumer understanding to repel
challenges from new entrants and strong
suppliers to maintain control over the
value chain
OEMs initially produce FEVs that are
adapted from existing vehicles and share
production lines to minimise risk and
maintain flexibility
As demand increases, there is a gradual
transition to fully redesigned FEVs with
their own production lines
Models evolve from hybrids to plug-in
hybrids and finally to battery electric
vehicles, as technology performance and
cost improve
New innovative vehicle concepts using
electric powertrains emerge, first in the
small city car segment
New market entrants are quick to
innovate with new business models and
novel vehicle concepts enabled by
electromobility
Innovation creates entirely new services
and value chains with a rapid pace of
development
Major OEMs struggle to keep up,
hindered by their size and large
investment in ICE technologies
Major OEMs lose significant market share
as the value chain rapidly changes
structure
A graphical presentation of the overall value chain for the ICT in FEVs sector is presented in
Figure 4 below.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 14
Figure 4: Automotive ICT for FEVs value chain
3.3 European value chain competitiveness
A review of the European value chain in ICT for the fully electric vehicle yielded the following
key findings:
Europe has companies operating in all sections of the FEV value chain, many of
which are market leaders or have unique added value offerings.
There are two broad categories of company in today’s value chain: major automotive
players who are moving into the sector (by technology cross-over, acquisition etc.),
and smaller companies who are currently niche players overall but who have a focus
on ICT for FEVs.
The majority of European companies involved in this sector are large enterprises
(over 1000 employees), but for most of these, FEV/ICT is only a small part of their
overall business.
There are several examples of small or medium-sized European companies that
specialise in FEV and ICT technologies and have world leading solutions.
In terms of company headquarter locations, three European countries dominate:
Germany, the UK and France. However, the majority of companies identified operate
multi-nationally if not globally.
Our research highlighted key competitive strengths that give European companies an
advantage over their international competitors in ICT for electric vehicles. However, the value
chain also has weaknesses and threats to its competitiveness. These are outlined below in
Figure 5 and Figure 6.
Tier 1 suppliers• Provide vehicle sub-
systems
• Integrate functions,
systems and
components
• Work with OEMs to
introduce innovations
• Drive out cost
Tier 2 suppliers• Provide components
for sub-systems
• Cross-fertilise
innovation from other
sectors
• Can sometimes act
as both tier 1 or tier 2
Telecoms suppliersProvide data transmission networks
Location based service suppliersProvide location-specific data to support telematics, V2I,
V2V and ADAS services
Connected vehicle service suppliersSupply services across vehicle lifetime via mobile
networks or cloud computing solutions
Semiconductor suppliersSupply semi-conductors to tier 1, 2 and 3 suppliers
OEMs• Understand
customer needs
• Specify vehicle
characteristics
• Integrate vehicle
systems
• Manage brand image
Tier 3 suppliers
• Provide specialist
components and
knowledge in niche
areas
• Highly innovative
• Smaller, regional
operators
Consumer
• Purchase vehicles &
mobility services
• Feedback
satisfaction to industry
• Ownership
experience shared
with social networks
Software suppliersSupply software products to tier 1 to 3 suppliers, OEMs and connected vehicle service suppliers
Energy suppliersProvide energy services (via charging
providers) and smart charging markets
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 15
Figure 5: Key competitive strengths of the European value chain for ICT in FEVs
Europe
Large OEMs with powerful brands: Volkswagen Group is the
world’s second largest vehicle manufacturer
Very strong presence in the (ICT-rich) premium vehicle
segment: BMW, Mercedes-Benz and Audi are major players
Brands willing to commit to FEVs: Renault-Nissan has
shown the greatest commitment to BEVs of any major OEM
World-class Tier 1 suppliers: Bosch is the world’s largest,
Continental and Magneti Marelli are in the top five
Leading automotive semiconductor suppliers: ST Micro,
Infineon and NXP are three of the largest in the world
Five of the top 10 automotive sensor suppliers are
European
Four of the top 10 mobile phone network operators are
European
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 16
Figure 6: SWOT analysis for European value chain competitiveness in ICT for FEVs
Europe
Strengths Weaknesses
• Strong FEV market growth projections due to
long-term policy direction and incentives
• Strongest Tier 1 suppliers of any world region,
with higher electronics capability than OEMs
• World-leading in premium OEMs with a strong hi-
tech product offering and buoyant exports
• World-leading in automotive semiconductors and
automotive sensors
• Electricity Utility companies that understand the
potential of FEVs
• Very strong on combustion engine technology
(for range extenders) – especially diesel
• Flexible value chain with close OEM - Tier 1
relationships
• Widespread ownership of smartphones
• Automotive industry invests more on R&D than
any other world region
• Very strong academic centres leading to high
quality research and strong tech skills base
• World-leading standard in safety, quality and
reliability
• European auto market saturated so net growth
must come from other world regions
• Lagging behind in both the development and
manufacturing of battery technology
• Having to catch up or partner on hybrid
technology, particularly for intellectual property
• Most connected vehicle services are provided by
non-European companies
• OEMs are relatively weak at co-ordinating R&D
activities throughout global centres
• Extreme weakening of the small supplier network
plus the threat of further consolidation
• Weak consumer electronics industry
• Slow decision making processes (including public
strategy, regulation and technical standards)
• Low co-ordination of Member State export policies
• Non-integrated EU market; regional competition
versus complimentary networks
• Complicated and dispersed R&D funding
processes, historically not commercially focussed
Opportunities Threats
• Build on success of AUTOSAR to develop leading
position in automotive software development
• Trade/ IP and skills in ICEVs / form alliances to
rapidly gain battery capabilities
• Potential to demonstrate EVs in combination with
renewable electricity generation and smart grids
• Build on academic battery R&D to establish future
battery industry
• Supply of sensors to foreign OEMs
• Utilise EU telecoms / ICT expertise to focus on
high-value ‘connected vehicle services’ sector
• Encourage greater industry cooperation / reduce
concerns about anti-competition laws
• A healthy mix of existing experienced OEMs and
dynamic new players specialising in FEVs
• Development of new services and business
models to generate growth
• Other regions adapt, develop standards, and
support nascent industry players more quickly
• Asian consumer electronics companies acquire
significant part of EV-ICT value chain
• Locked out of key battery and hybrid technologies
due to Japanese / Korean / US patents
• Continuing reliance on importing batteries and
rare earth elements
• Chinese government encouraging foreign OEMs
to make FEVs in China (in partnership with
Chinese OEMs) leading to gradual offshoring
• Foreign OEMs targeting European market
• Foreign investment funds acquiring European
companies to gain expertise and access to the
market
• European OEMs manufacture in growth markets
and export back to the EU
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 17
3.4 The European market for FEVs
In 2010, FEVs plus hybrids accounted for less than one per cent of European
passenger car sales
The current market for FEVs as a percentage of total passenger car sales is very small.
Including hybrid vehicles (which dominate the figures), total 2010 sales in Europe were just
0.7%. The markets with the largest shares are Japan (11%) and USA (2.5%). China’s market
lags considerably at less than 0.1% of 2010 sales.
As with any disruptive technology that has yet to hit the market fully, predictions of future
sales are difficult as they depend on future policy support; infrastructure deployment; speed
of technology innovation and cost reduction; and economic drivers such as oil prices. Despite
these uncertainties, experts generally agree that electric vehicles will represent one of the
key options for individual mobility in the future. Where disagreements arise is in the timing of
this development.
Estimates for European sales of FEVs in 2020 vary between 0.5 and 3 million
Figure 7 compares predictions of annual FEV sales in Europe. By 2020, at the bottom end of
the scale, ACEA’s lower estimate assumes that 500,000 units will be sold. In comparison,
Roland Berger’s ‘The future drives electric’ scenario estimates annual sales could reach 3
million. This scenario foresees higher oil prices, accelerated battery cost reductions, stronger
government support and a broader product range in the next five to ten years, making
electric vehicles a very attractive alternative by 2020.
Figure 7: Comparison of annual sales projections for FEVs in Europe
Europe may account for 25% of global FEV sales in 2020
Europe’s share of the total global car sales market is expected to decline in the future due to
growth in car sales in developing regions. Its position for FEVs may be different, as electric
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2015 2017 2020
FE
V a
nn
ua
l s
ale
s, m
illi
on
s
Roland Berger *
Roland Berger **
ACEA Communication SanSebastian
ERTRAC
Sum of Member State targets(IEA 2009)
Frost & Sullivan
Strategy Analytics (pessimisticscenario)
Strategy Analytics (optimisticscenario)
*Potential EV customers based on car buyers who have access to infrastructure and a compatible mobility profile** "The future drives electric" scenario - higher oil prices, accelerated battery cost reduction, stronger government support and a broader FEV product range in the next five to ten years
8
8
8
6
6
4
4
4
4
77
7
5
5
3
3
1
12
2
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 18
vehicle sales in the short and medium-term are more likely to be concentrated in wealthier
countries. This is in part because of their cost premium compared to internal combustion
engine vehicles, and in part because of demand-side policies driven by regulatory pressure
to address carbon reduction and air quality issues.
Figure 8: Sales projections for electric vehicles across world regions (source: IEA)8
These projections suggest that Europe will experience amongst the strongest growth in sales
for FEVs of any world region to 2020, despite stagnating growth in overall car sales. A strong
domestic market would likely benefit European OEMs and stimulate a European FEV
manufacturing capability. However the strong growth of emerging markets, particularly
China, may counterbalance this.
A conservative estimate of the global market value for ICT in FEVs is around €15
billion by 2020.
Combining the various projections of FEV sales with predictions of the expected value of ICT
content in all types of future vehicles, it is possible to derive an approximate estimate for the
market value of ICT in FEVs of around €15 billion by 2020. However, this could be
conservative. FEVs are likely to be the most connected vehicles on the road and expert
estimates of the total ICT value within a next-generation FEV range from 15% to 40% of the
total vehicle value. At the upper end of this estimate or with higher deployments of FEVs, the
total value of the sector could be several times this.
3.5 The FEV industry in other world regions
Our analysis suggests that four world regions stand to compete most strongly with Europe in
the emerging FEV market. This section gives brief summaries of strengths and weaknesses
of the FEV industry in these regions.
8 IEA, 'Technology Roadmap: Electric and plug-in hybrid electric vehicles', 2011. Available online at:
http://www.iea.org/papers/2011/EV_PHEV_Roadmap.pdf
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 19
Figure 9: Strengths and weaknesses of the FEV industry in other world regions
Japan
+ Third largest producer of motor vehicles in the world, one of the most
successful exporters
+ Leads the world in hybrid vehicle systems with dominant IP,
manufacturing and brand position – particularly Toyota
+ Strong internal market for efficient vehicles and new technology
+ World leader in battery technology design and manufacture
- Strength of the yen makes inward investment unattractive
USA
+ Substantial government funding has stimulated FEV industry
+ Strong track record in high tech R&D with silicon valley hub
+ Startup OEMs and component (esp. battery) suppliers targeting FEVs
- Support at the state level is inconsistent
- Consumers still favour larger gasoline vehicles with long range
China
+ The largest global growth market for passenger cars
+ Attractive conditions for manufacturing vehicles and components
+ Strong government intent to support the FEV industry
+ Industrial policy that favours domestic producers
- Low FEV demand today with a cost-constrained consumer base
- Lower vehicle quality standards currently leads to weak exports
S. Korea
+ Strong in Li-ion battery R&D and manufacturing industry
+ Second only to Japan in Li-ion intellectual property
+ Strong government support for industrialisation of FEVs
+ Free trade agreement with the EU since 2011
- Low FEV demand today with a cost-constrained consumer base
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 20
4 Objective B: the enabling role of
ICT
The aim of Objective B: The Enabling Role of ICT is to build on the work in Objective A by
examining the future potential for a fully electric vehicle (FEV) industry in Europe, and the
enabling role for ICT. The specific aims were:
To understand how ICT and smart systems might feature in the future FEV industry in
Europe, both in their enabling role in vehicles and as a contribution to Europe’s
industrial economy;
To analyse the R&D spend, and emerging results, in Europe compared with other
world regions;
To investigate Europe’s potential in the future in terms of infrastructure, skills, and the
potential for cross-industrial fertilisation.
4.1 Patenting activity in ICT for FEVs
Patenting activity (both applications and granted patents) in the cross-over area between
electric/hybrid vehicles and ICT (EV-ICT) was analysed. Key conclusions are presented
below.
4.1.1 Patent applications
Patent applications can take anything from three to eight years to reach grant stage. Analysis
of recent applications can be used as a measure of productive research activity. National
patent applications are influenced by many factors, including differences in culture, local
industry, government incentives, economic climate and intellectual property laws. Due to
these issues, our analysis focused primarily on high-value patent applications. These are
defined as applications that are either:
1. Made through the Patent Cooperation Treaty (PCT); or
2. Triad applications (made at the European, US and Japanese patent offices).
Figure 10 below shows the change in volume of high-value patents in EV-ICT by the region
where the patents originated, over the decade to 2008 (the latest year for which data are
available in this detail).
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 21
Figure 10: High-value EV-ICT patent applications by region of origin, 1998-2008
Note: The apparent drop in applications from Japan in 2008 is likely an artefact due to translation delays.
Japan accounts for 45% of high-value patent applications in EV-ICT (1998-2008)
A major portion of this activity is from Toyota, which files over a third of Japanese
applications. The other two major Japanese OEMs are some distance behind. Honda files
11% of Japanese applications and Nissan 9%.
The majority of EV-ICT applications from European companies originate in Germany
From 1998 to 2008, around 17% of high-value patent applications originated from Germany,
with Tier 1 suppliers Bosch and ZF Group registering the most applications in EV-ICT.
Despite growth in German applications, the number is on average only half that of Japanese
applications. France takes a distant second place at 5%, led by Renault, Peugeot and Valeo.
The US accounts for around 16% of applications, China for only 2%
Although US activity has shown a gradual increase, the rise has not been as steep as in
other countries. Chinese applications are mostly limited to the domestic market, and
therefore do not feature strongly in the analysis. Overall, applications from China account for
only 2% of the total high-value applications, and mostly originate from R&D facilities owned
by non-Chinese OEMs (Toyota and Mitsubishi are the top two companies). Other regions
including Korea, India and Brazil each account for less than 1% of applications.
Toyota is pursuing an aggressive patenting strategy in EV-ICT
Toyota dominates the number of patents in this area. All other applicants lag behind by a
significant margin. Honda and Bosch, in second place and third place respectively, each
have only one third of the number of applications. Toyota’s patenting strategy could create
barriers to other firms that wish to enter the EV-ICT value chain.
China has joined Europe, the US and Japan as a key market for patent applications
Between 2000 and 2004 the proportion of patent applications seeking protection in China
grew very strongly. Since 2004, China has joined Europe as the third most popular region in
0
100
200
300
400
500
600
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Hig
h-v
alu
e p
ate
nt
ap
pli
ca
tio
ns
Other
EU-272005-08
(drop likely due to delay in translation)
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 22
which to register EV-ICT patents, after the US and Japan. This reflects China’s growing
market importance.
4.1.2 Granted patents
Granted patents will have been originally filed around three to eight years ago, so do not
include the latest innovations. However, they can provide an indication of market advantage.
Triad patents (covering US, Europe and Japan) were analysed as these are typically of
higher value.
Japanese companies hold the largest EV-ICT triad patent portfolios
Toyota has accumulated a significant patent portfolio over the past two decades, which
makes it more difficult for competitors to patent similar technologies. It holds 1,500 high-
value patent family applications in EV-ICT areas. Honda is in second place, with 420 and in
third, the highest-ranking European company was Bosch, with around 380 patents. Japanese
companies hold around three-quarters of total ‘triad’ grants over the past two decades. Even
in patents covering Europe only, Japanese companies are more active than European firms,
accounting for just below 40% of total patent grants.
Germany and France have the most triad patents of European countries
German companies hold 11% of total triad grants and France holds 3%. The European
companies with the biggest portfolios are: Bosch (a supplier); Daimler (an OEM); Renault (an
OEM) and Siemens (a supplier). US companies hold around 8% of triad grants.
Number of patents held does not directly translate into market power
Large patent portfolios can be an indicator of strength in the market, but the advantages of
patenting must be considered in light of the significant costs incurred during patent filing and
prosecution, investments in research and litigation costs against infringers. It appears that
Toyota’s extensive patent portfolio has slowed or excluded other manufacturers from the
hybrid market, enabling Toyota to gain a majority market share of hybrid vehicle sales.9 It has
also enabled Toyota to license and cross-license hybrid technology. Experts we interviewed
acknowledged that Japanese firms have the strongest EV-ICT patent portfolios, but many
thought that the ability to trade IP and the fast pace of technological development would
mean that European firms would not necessarily be disadvantaged as a result.
4.1.3 Position of Europe compared to other world regions
Europe remains behind Japan in terms of patent generation, but there are other
opportunities to ensure access to intellectual property
In the automotive sector, it is very common to cross-license (trade patent rights) and litigation
over patent infringement is relatively rare (compared to, for instance, the recent spate of
high-profile mobile technology patent cases).Given the speed of technological change and
the faster rate at which competitors can bring imitations to market, it may be that firms are
choosing other strategies. Alternatives may include keeping trade secrets or public research
disclosures.
9 Griffith Hack (2009) Who holds the power?
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 23
Figure 11: SWOT analysis for European companies and their intellectual property
strategies
4.2 R&D investment in the EU and Other Regions
Europe has the highest automotive industry R&D spend of any world region
The European automobiles and parts sector spent almost €30 billion on R&D in 2011. Japan
is close behind with €23.6 billion and the USA is third with €11.6 billion. Figure 12 shows a
clear correlation between sales and R&D spend, but it is not clear whether there is a causal
link between the two.
OEMs spend more on R&D than suppliers; Toyota spends the most, followed by VW
OEMs spend more on R&D than automotive suppliers. Eight of the top ten automotive
company R&D expenditures globally are OEMs, Bosch and Denso being the only suppliers.
Toyota spends the most on R&D at €6.7 billion in 2011, with the Volkswagen Group close
behind with €6.3 billion. However Toyota’s R&D spend as a percentage of sales revenue is
3.8% - less than VW, which spends 4.9% of its sales revenue on R&D (see Figure 12).
It is not possible to identify private sector R&D spending on ICT for FEVs
Companies do not divulge specific information on R&D strategies or how their R&D budget is
split between different priorities. As a result of the development cost and diversity of new
technologies, OEMs are increasingly forming joint ventures.
TO
WSIP generation
Strengths Weaknesses
• European companies appear to be focussing
on their home markets, where they hold
around a third of grants.
• Germany, in particular, shows strong activity
being the country with the second highest
number of ‘high value’ patent applications in
‘EV-ICT technology’.
• European companies hold a relatively small
patent portfolio compared to Japan, both
domestically and globally.
• Recent research trends indicate that despite
increased effort, European companies
remain well behind Japanese companies in
filing patent applications.
Opportunities Threats
• Forming alliances. The Renault-Nissan
alliance is an example of past success.
• Opportunities to license or buy technology;
the market is highly dispersed, with many
small start-ups who could be open to
collaboration.
• The fast-moving technology areas of ICT
may lend themselves more to strategies
other than patenting, which may undermine
the apparent lead of Japanese companies.
• Expensive new technologies such as these
are normally first introduced in premium
brands where Europe has a strong position.
• Toyota’s extensive patent portfolio could
present a challenge for European
companies. In the past, it has slowed or
excluded other manufacturers from the hybrid
market, helping Toyota to gain a majority
market share of hybrid vehicle sales.
European companies must be mindful of
infringement risks.
• Current and past activity appears to focus
more on hybrid technology as opposed to
fully electric vehicles, which could be
problematic if the market moves towards
electric vehicles
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 24
Figure 12: Sales vs. R&D spend for the top OEMs (data extracted from the 2011 EU
Industrial R&D Investment Scoreboard10)
The US provides €1,658 billion public funding for automotive R&D, closely followed by
Europe at €1,611 billion
Public sector automotive R&D funding was investigated by the FP7 project, EAGAR
(European Assessment of Global Publicly Funded Automotive Research). The US spends
the most globally, followed by the Europe. Japan, China, Korea and India are far behind.
Automotive companies are locating new R&D centres in growth regions such as China
and India. Silicon Valley is becoming a focus for telematics R&D
Many automotive companies are opening R&D centres in China and India. This is primarily to
ensure they understand customer requirements in these growing markets, and not to
outsource R&D for European markets. Silicon Valley in the US is a growing location for
telematics R&D due to the existing ICT expertise located there.
Industry experts voiced a number of suggestions for improving R&D investments
The experts we interviewed believed that European R&D is world class, but is under threat
from emerging economies, which are quickly developing their capabilities. They suggested
several options for improving the quality of R&D:
Further use of public-private partnerships (PPPs) to manage public R&D funding;
The creation of regional centres of excellence for key technology areas;
‘Foundation manufacturing’ facilities for use by SMEs to reduce development costs;
Specialist research centres with close academic and industrial ties;
10 EC JRC, The 2011 EU Industrial R&D Investment Scoreboard, 2011, Available online at:
http://iri.jrc.ec.europa.eu/research/scoreboard_2011.htm
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
0 50,000 100,000 150,000 200,000
R&
D S
pen
d (
€m
)
Sales (€m)
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 25
Facilitate funding projects closer to market by facilitating partnerships that represent
likely supply chains rather than pre-competitive research partnerships.
4.3 Technical capabilities
Europe’s automotive industry has some of the best technical skills in the world
European automotive technical and engineering skill levels are comparable with the
developed automotive nations of Japan and Korea. Experts believe that on average, Chinese
engineers do not currently exhibit the same skill levels, but they are improving.
Some key automotive nations in Europe currently have a skills shortage in electrical,
electronic and mechatronic engineering which is expected to increase
The shift to electric vehicles will require a different skill base in the automotive industry: from
mechanical engineering to electrical, electronic and mechatronic engineering. The UK and
Germany currently have a shortage of skills in these areas; this shortage is expected to
increase as the industry develops in this direction. There are expected to be an additional
193,000 engineers employed globally in the electronics element of the automotive industry
by 2030. Some 50,000 of these are likely to be in Europe.11
Europe needs to attract young talent into automotive engineering
Europe is suffering from an ageing engineering workforce. One suggestion to combat this
trend is to adjust immigration policy to remove the barriers to allow skilled foreign engineers
to gain employment. To attract emerging talent, the automotive industry needs to become an
appealing career option for a young, diverse new breed of ‘Generation Y’ engineers.
Along with a skilled workforce, Europe possesses ‘FEV friendly’ infrastructure
Many European countries (particularly in North-western Europe) rank highly in assessments
of their ‘network readiness’.12 An existing network and communications infrastructure is a
prerequisite for ‘V2X’ (vehicle to vehicle, grid, and infrastructure) communications. This
makes it more likely for a V2X market to develop early in Europe, particularly compared with
emerging markets that have less well developed communication infrastructure, standards
and regulations.
4.4 Cross-industry fertilisation
Technological synergies exist between the automotive, aerospace, microelectronics,
microsystems and embedded systems industries. Europe is one of very few regions in the
world to have players in all these industries. Examples of potential cross-industry fertilisation
that could benefit the automotive sector include the following:
A move to a new modular architecture for ICT could improve quality and reduce costs
The aerospace industry has moved away from segregated, function-specific electronic
control units towards a new modular architecture. This move was motivated by the potential
for the use of commercial off-the-shelf components, increased reliability and fault tolerance
and reduced maintenance requirements. A similar move could benefit the automotive sector
in FEVs.
11 McKinsey & Company, 'Boost! Transforming the powertrain value chain - a portfolio challenge', 2011. Available online at:
http://autoassembly.mckinsey.com/html/resources/publication/b_Boost_Transforming_powertrain_2011-02.asp 12
INSEAD, 'The Global Information Technology Report 2010–2011, Transformations 2.0', 2011. Available online at:
http://www3.weforum.org/docs/WEF_GITR_Report_2011.pdf
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 26
Increased use of virtual testing could reduce vehicle development costs
Virtual testing is an industry norm within aerospace, where full physical testing is often cost
prohibitive. Advanced simulation and modelling technologies are widely used for mechanical
and electronic systems, shortening development cycles and reducing the cost of prototyping.
While virtual testing already occurs in the automotive sector, greater use could boost overall
industry competitiveness and exploit synergies with the EU computing industry.
A systems approach to diagnostics could reduce costs and address battery concerns
The aerospace industry focuses on on-board diagnostics, where an on-board maintenance
system computes information to give relevant warnings. This significantly reduces the need
for additional complex off-board diagnostic systems and services. Automotive diagnostic
troubleshooting focuses on individual components, but a systems approach could give cost
advantages, increase vehicle utility and improve the overall ownership experience. A
prognostic approach could be of particular benefit to FEVs, where the battery’s health and
future value represents a significant risk to the owner.
Further integration of ‘X-by-wire’ systems will enhance active safety capabilities
’X-by-wire’ has reached a significant level of maturity within the aerospace industry, but wide
use of control with no mechanical connection in the automotive sector still faces cost,
regulatory and acceptance barriers. Further development of steer-by-wire offers improved
crash response of vehicles, optimised design of the engine bay and improved ergonomics.
Replacing other mechanical components with electronic counterparts can eliminate high-cost
components, reduce vehicle weight and introduce active safety functionality
Improved microelectronics will increase FEV efficiency and range
The insulated gate bipolar transistor (IGBT) is a critical component for high-voltage, high-
current coupling between the power source and traction motor in an FEV. The frequency at
which IGBTs can perform high-voltage switching and the temperature limits at which they
can operate will be a key determinant of efficiency. Component manufacturers are
developing composite semi-conductor materials that offer increased thermal performance
and a reduction in energy consumption.
Multicore microcontroller units (MCUs) may simplify architectures and improve safety
Automotive microcontroller units (MCUs) for vehicle systems may be integrated into a single
controller. New functions demand greater computing power and OEMs are gradually shifting
to multicore MCUs in their electronic systems architectures. These offer the ability to
consolidate control of multiple systems, and for more segregation between safety critical
functions and general-purpose functions to enhance vehicle safety.13 A similar transition has
already been seen in the telecoms industry.
Improved MEMS technology will improve driver safety and navigation systems
Micro-electro mechanical systems (MEMS) are miniaturised sensing and actuation devices,
including gyroscopes, accelerometers and electronic compasses. The huge appetite for
smart phones and tablet devices is spurring rapid innovation and driving down component
costs, with Europe at the forefront of development. The implications of these developments
for automotive applications include enhanced offerings to predictive and adaptive cruise
control, advanced driver safety systems and navigation. However, new safety standards in
13 Monet, A., Navet, N., Bavoux, B. & Simonot-Lion, F. ‘Multi-source software on multicore automotive ECUs - Combining runnable sequencing
with task scheduling’ 2012. Available online at: http://www.loria.fr/~nnavet/publi/ECU_TIE_2012.pdf
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 27
the automotive industry means that manufacturers of MEMS for consumer electronics may
face regulatory barriers to supplying into safety-critical automotive applications.
Model-based software development can reduce development time and costs
Embedded systems are forecast to grow to 35% of total vehicle value by 2015, with
development costs outstripping all other vehicle R&D areas. Software development time is
growing because of the rising number of functions, whereas development time in all other
vehicle areas is decreasing. Model-based development has the potential to shorten
development times but large investment requirements may pose a barrier to uptake.14
4.5 Feasibility of EU manufacture of FEVs and
components
Electric vehicles will continue to be manufactured within Europe if a market exists
There is a trend for expanding vehicle assembly facilities in growth regions such as China,
but analysis suggests vehicle assembly within Europe is secure and the concern that
manufacture will move exclusively to emerging economies is overstated.15 However, the FEV
value chain shifts the value-add activities upstream, particularly with batteries, and it is not
clear how much of this will occur in Europe. Automotive manufactures increasingly aim to
manufacture vehicles in the target market. Europe’s medium-term FEV market growth is
predicted to be as strong as any world region, despite overall flattening of car sales volumes.
Europe needs to increase battery manufacturing capabilities
Most European OEMs currently import batteries. Domestic manufacturing would have the
advantage of shortening supply chains, reducing risk and the capital tied up in shipping.16 In
the long term, battery and motor production is expected to be highly automated, meaning
highly skilled labour is more important than a low cost workforce. Large investments will be
needed for Europe to become a major manufacturing centre for FEV batteries, but
participation is important to keep the FEV value chain in Europe.
European OEMs are expected to increase in-house motor production
Most European manufacturers currently outsource their electric motors from suppliers but
many are now looking to develop them in-house. Analysis indicates that about 60% of the
OEMs that are outsourcing motors are planning to bring the capability in-house.17 Examples
include a Daimler-Bosch joint venture to manufacture electric motors in Germany, and a joint
venture between BMW and Peugeot-Citroen to produce FEV components in France.18
Europe leads the automotive semiconductor industry but faces growing competition
As the home of three top suppliers, Europe has a strong position in automotive
semiconductors, holding 36% of the market in 2008. This advantage was developed due to
the presence of luxury automotive brands, which lead in introducing new ICT technology.
14 Kirstan, S. & Zimmermann, J. ‘Evaluating costs and benefits of model-based development of embedded software systems in the car industry –
Results of a qualitative Case Study’. 2010. Available online at: http://www.esi.es/modelplex/c2m/docum/Paper_ECMFA_Altran.pdf 15
IBM, 'Automotive 2020: Clarity beyond the Chaos', 2008. Available online at: http://www-935.ibm.com/services/us/gbs/bus/pdf/gbe03079-usen-
auto2020.pdf 16
Roland Berger, 'E-Mobility – a promising field for the future: Opportunities and challenges for the German engineering industries', 2011.
Available online at: http://www.rolandberger.com/media/pdf/Roland_Berger_E_Mobility_E_20110708.pdf 17
Frost and Sullivan. ‘Hybrid and Electric Vehicles to boost market for Electric Motors’ 2011. Available online at:
http://www.frost.com/prod/servlet/market-insight-top.pag?docid=226755664 18
PSA Peugeot Citroen. ‘BMW Group and PSA Peugeot Citroën to Invest 100 Million Euros in Joint Venture on Hybrid Technologies’ 2011.
Available online at: http://www.psa-peugeot-citroen.com/en/psa_espace/press_releases_details_d1.php?id=1226
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 28
However, competition is increasing as new players enter the market, stimulated by sales
growth in China and India. Much of the hardware is small enough to be shipped economically
across the globe, so production could move to lower-cost regions. Semiconductor suppliers
have tended to keep their hardware and first level software in the same region. However,
beyond 2015 European suppliers could move their hardware design out of Europe to reduce
costs. There is a further risk that the embedded software competence will follow.19
Europe’s automotive telematics sector is under threat
The telematics market is changing rapidly, with the consumer demanding the same
functionality from their car as they can get in the consumer electronics products. Consumers
are used to smart products with common operating systems, and expect automotive
telematics to work in this way. The greatest added-value will be in the services that can be
accessed, hardware specification being less important to consumers than the software
interface.20 US companies are producing some of the most advanced telematics systems.
New entrants into this market include connectivity companies such as Airbiquity, Qualcomm,
and Hughes Telematics. Hughes Telematics is currently producing the telematics for some of
the major German OEMs - Daimler, Volkswagen and Audi. If Europe is to succeed in this
sector, it is likely that this success will come from new automotive industry players such as
TomTom / Octo Telematics or WirelessCar, rather than the traditional Tier 1 suppliers. These
companies are flexible and entrepreneurial enough to adapt to the marketplace and can
produce products within short timescales.
Success factors for European FEV manufacture
Collating opinion from industry stakeholders and automotive literature, a number of potential success factors for European manufacture have been established. These are shown in Figure 13 below.
19 EC JRC, 'Is Europe in the Driver's Seat? The Competitiveness of the European Automotive Embedded Systems Industry', 2010. Available
online at: http://ftp.jrc.es/EURdoc/JRC61541.pdf 20
Tech Crunch. ‘The Death of the Spec’ 2011. Available online at: http://techcrunch.com/2011/11/14/rip-spec/
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 29
Figure 13: Seven success factors for European FEV manufacture
Factors that can help secure a European FEV manufacturing industry
1
Europe must ensure that it retains its position at the top of global automotive
R&D; the industry must invest heavily in new FEV technologies, and public
R&D spending should be comparable with, if not leading, the other major
automotive regions.
2
Europe needs to create a strong single market for electric vehicles by
harmonising incentives and acting to address the barriers to their
deployment (discussed in more detail in Objective C - barriers to FEV
deployment). This includes issues with market and regulatory fragmentation
in Europe due to varying Member State regimes.
3
Europe needs economic stability, and the Eurozone to remain in place, to
create the right conditions for private investment in the region.
4
Europe needs to support SMEs that specialise in electric vehicle solutions.
These small companies are sufficiently flexible and innovative to adapt to the
new mobility challenge and are likely to drive growth into new value chains.
Support could be in the form of early or late-stage investment project
financing.
5
To be able to compete with the low labour cost economies, Europe must
ensure that its factories are highly automated and supplied with highly-skilled
labour that cannot easily be found in emerging economies.
6
To close the skills gap, Europe needs a recruitment drive to encourage
students to study engineering, in particular electrical, electronic and
materials engineering. This could also involve employing skilled non-
European engineers.
7
Europe should aim to create favourable conditions for automotive companies
looking to develop manufacturing facilities in Europe (likely if the European
FEV market is strong). This may include financial incentives, as offered in
the US and China.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 30
5 Objective C: hurdles and roadmaps
The aim of Objective C: Hurdles and roadmaps is to identify barriers and hurdles to
development and deployment of the fully electric vehicle in Europe – drawing on experience
from trial deployments to date – and evaluate roadmaps towards overcoming these hurdles.
The specific aims are to:
Identify barriers to development, industrialisation and deployment of electric vehicles,
both in terms of their successful deployment on Europe’s roads and the forming of a
competitive electric vehicle industrial value chain in Europe.
Identify and assess possible solutions with a particular focus on the potential role of
ICT and smart systems in mitigating or overcoming the hurdles identified;
Review existing roadmaps to overcome the identified hurdles, prioritizing solutions
with realistic targets, milestones and timescales.
5.1 Barriers to electric vehicle deployment
Many independent research studies foresee a major role for electric vehicles in the long-term
decarbonisation of the road transport sector, reducing dependence on fossil fuels and
meeting local air quality targets. However, without government support, electric vehicles are
unlikely to gain significant market share. There are a number of barriers that prevent mass
uptake; some of the most important factors are discussed here, including:
Vehicle costs;
Battery charging solutions;
Standards and regulations;
Access to raw materials; and
Consumer expectations
5.1.1 Vehicle costs
The biggest barrier to consumer take up of electric vehicles is the high upfront cost
Current FEVs are substantially more expensive to buy than an equivalent petrol or diesel
vehicle. However, studies have found that few private car purchasers are willing to pay a
significant premium for an FEV.21,22 For fleet managers, who have a higher focus on the total
cost of ownership, high capital cost is a less significant barrier.
Higher upfront costs for FEVs are primarily due to the current cost of batteries
For current FEVs, the battery can represent up to 50% of the cost of the vehicle.21,23,24 Future
reductions in battery costs may be hampered by the high cost of skilled labour for
21 Deliotte, 'Unplugged: EV realities versus consumer expectations', 2011.
22 CENEX, 'The Smart Move Case Studies', 2011. Available online at: http://www.cenex.co.uk/consultancy/vehicle-deployment-trials/smart-move
23 An exchange rate of 0.76 has been used throughout the report to convert US$ into €.
24 AEA (2010), Market outlook to 2022 for battery electric vehicles and plug-in hybrid electric vehicles (report for the Climate Change Committee)
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 31
manufacture and the rising cost of material inputs. Expected reductions in battery unit costs
may also be offset by manufacturers offering larger batteries to increase vehicle range.
The total cost of ownership (TCO) for an FEV is expected to reach parity with
conventional vehicles in between one and five years’ time in some regions.
Studies of vehicle TCO indicate that in some countries, the higher purchase cost of FEVs
could be offset by lower running costs compared to a conventional ICE vehicle in one to five
years’ time without subsidies.25,26 More conservative estimates indicate TCO may not be
comparable for electric and conventional vehicles before 203027. Calculations depend on the
future prices for fossil fuels, electricity, and FEV batteries, all of which are highly uncertain.
Private consumers do not consider the total cost of ownership, are concerned about
depreciation and expect FEVs to have high running costs.
Private car buyers typically only take the first three years of fuel use into account when
making purchase decisions.28 This means that they are less likely to purchase vehicles with a
higher upfront cost, even if the total cost of ownership is lower. Uncertainties about long term
value and depreciation are mentioned as a barrier for purchasing an electric or plug-in hybrid
car. Consumers also tend to assume the maintenance costs of electric cars to be higher,
although experts anticipate the contrary.29
5.1.2 Charging solutions
Successful business models for charging infrastructure need to be developed
Financing charging infrastructure (particularly in public places) is a major challenge.
Significant capital expenditures are needed to provide sufficient density of charging points.
The high capital costs, low energy prices and initial low utilisation for FEV charge stations
require a completely different business model to petrol refuelling stations. The payback time
can exceed the lifetime of the outlet (typically 10 years).30
Total grid capacity is not a major issue, but unmanaged peak loading could be
Even a complete electrification of the European vehicle fleet (which is not predicted in even
the most optimistic scenarios to 2050) would only result in additional electricity demand of
10-15%. It is very likely that generating capacity will be able to meet the additional demand,
at least in the short to medium term.27 However, uncontrolled charging can significantly
increase peak load, with effects at the distribution and generation level. In member states
with relatively weak electricity infrastructure, even small scale EV introduction can cause
local power-outages if charging is uncontrolled. Fast charging applications, which place
greater strain on electricity grids, could lead to bottlenecks in all Member States.31
25 The Boston Consulting Group, 2011: Powering Autos to 2020: The Era of the ElectricCar? Available online via:
http://www.bcg.com/documents/file80920.pdf
26 International Energy Agency’s EV Technology Roadmap
27 CE Delft, 'Impacts of Electric Vehicles (5 separate deliverable reports + summary)', 2011. Available online at:
http://ec.europa.eu/clima/news/articles/news_2011051701_en.htm
28 EU DG for Internal Policies, 'Challenges for a European Market for Electric Vehicles', 2010. Available online at:
http://www.icarsnetwork.eu/download/NewsEvents/itre_ep_report_electric_cars.pdf
29 LEI, CE Delft, Fraunhofer ISI 2011: Behavioural Climate Change Mitigation Options Domain Report Food 30
Electrification Coalition (ELCOA). Economic Impact of the Electrification Roadmap
31 Grid for Vehicles (G4V), Work package 3 / Deliverables 3.3. List of identified barriers and opportunities for large scale deployment of EV/PHEV
and elaboration of potential solutions. Available online under:
http://www.g4v.eu/datas/reports/G4V_WP3_D3_3_list_of_barriers_for_deployment.pdf
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 32
There are technical and cost barriers to smart charging of FEVs
Smart charging of FEVs, where charging is automatically scheduled to take place at an
optimum time for grid energy and power balance, faces several barriers in Europe according
to stakeholders. This includes technical barriers to implementing the required market
systems, and high costs preventing a viable business model from being developed.
5.1.3 Standards and regulations
Further work is required on standards and regulations for data protection and safety
European standardisation and regulation for vehicle charging and type approval has made
significant progress but there is still work to do in areas such as data protection, safety
requirements; communications between vehicles and the grid; and other communications
standards. Industry experts were concerned that overregulation and slow progress could
hamper European competitiveness.
5.1.4 Raw materials
FEV motors and batteries currently utilise materials that could pose resource risks. In
particular, rare earth elements are only mined in a few locations, and supply is expected to
outstrip demand in the future, leading to significant price rises. Figure 14 describes the
resource risk for four materials used in FEVs. Advanced manufacturing techniques may be
able to limit the amount of rare earth elements needed, but to date it has been challenging to
eliminate them entirely.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 33
Figure 14: Resource risks associated with FEVs
Material Application Risk
Most
critical
Least
critical
Dysprosium
High efficiency
permanent
magnet motors
Limited substitutes currently exist. Demand
expected to grow strongly due to FEVs.
Current reserves mainly in China; other
mines due to come on stream around 2015
but add less than 15% to current
production. China is restricting exports.
Neodymium
High efficiency
permanent
magnet motors
Limited substitutes currently exist. Demand
expected to grow strongly due to FEVs and
other motor/generator applications (e.g.
wind turbines). Demand likely to exceed
production in the short term. Current
reserves mainly in China; other mines due
to come on stream around 2015, but supply
will remain tight. China is restricting
exports.
Lithium Li-ion batteries
Sufficient reserves exist, but supply may
not be able to scale as quickly as demand,
leading to short-term price rises.
Cobalt Battery
cathodes
Sufficient reserves exist, but supply may
not be able to scale as quickly as demand,
leading to short-term price rises.
5.1.5 Consumer expectations
Surveys of consumer attitudes towards FEVs21,32 typically find that expectations on range,
charge times and purchase price far outstrip the current reality. However, evidence from field
trial results suggest that consumer views change when they participate in FEV trials. Some
key insights reported by field trials are shown in Figure 15.
32 TSB, 'Initial findings from the ultra-low carbon vehicle demonstrator programme', 2011. Available online at:
http://www.innovateuk.org/_assets/pdf/press-releases/ulcv_reportaug11.pdf
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 34
Figure 15: Five insights into consumer reaction during field trials
Consumer views: insights from field trials
1
Consumer perceptions are changed by practical experience of FEVs. Initially
trialists have concerns on range, reliability and safety – but post-trial surveys
reveal that these concerns are significantly reduced by the end of the trials.
However, private consumers remain unwilling to pay a significant price
premium for an FEV.
2
Whilst few faults are reported in the vehicles themselves (and significantly,
no safety issues), problems were reported with the integration of
communications between vehicle, charging infrastructure and support
services. This undermined consumer confidence.
3
Most trialists had access to home charging, and typically relied on this to
recharge the vehicle. Despite this, survey results show that they still view
public recharging infrastructure as an essential requirement.
4
A strong motivator for both private and commercial trialists to try electric
vehicles is their perceived ‘eco friendliness’. For this reason, there was a
strongly positive response when vehicles were provided with a ‘green’
electricity tariff so that they were charging on low-carbon electricity.
5
In general, fleet operators were more open to FEVs than private individuals
because they placed more emphasis on total cost of ownership (over capital
cost), they saw marketing benefits in the green image of FEVs, and they
were willing to modify their management processes to accommodate the
charge and range restrictions.
Inconvenience of charging is cited as a main barrier to buying an FEV.29
Most consumers expect an electric vehicle to recharge its battery in two hours or less.21 This
is substantially shorter than today’s typical charge times of 6-8 hours. However, practical
experience can shift expectations: after a three month trial, three quarters of consumers felt
charging speeds suited their daily routine.22 Most charging currently occurs at homes and
workplaces; however users appreciate the security and flexibility offered by public recharging
stations.
5.2 Solutions to overcome hurdles
A number of technological solutions to the hurdles of FEV cost and performance are detailed
in Objectives A and B. In addition to these, there are a number of business models that seek
to address the key barriers of vehicle cost and availability and use of recharging
infrastructure.
Leasing of vehicles \ batteries could insulate the consumer from the high capital costs
Leasing avoids both the high up-front costs of purchasing an FEV and the risks associated
with ownership. Vehicles can be leased under a service contract for a fixed rate; this model is
already employed in the commercial fleet segment but is uncommon in private vehicles.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 35
Alternatively, the battery can be leased and the rest of the vehicle sold as normal. A
subscription service model, where the lease includes access to charging infrastructure or
swap stations (and possibly electricity), is another option. The service provider has full
control over the maintenance of the batteries, reducing the risk of unreliability and
depreciation to the consumer. The hurdle to both leasing systems is developing a business
model where the service provider takes on an acceptable risk for the return, whilst providing
the service at an attractive price for consumers.
A range of business models will be needed to give comprehensive charging
infrastructure coverage
Public infrastructure requires significant upfront investment for the purchase and
installation of charging points, and will have an extended payback period as the
charging price needs to be kept low to guarantee usage. Infrastructure usage is likely
to be unpredictable and the model could increase the peak load on the local
distribution grid, which could cause problems if the network is close to capacity.
Private infrastructure represents an investment decision and, therefore, seeks a
return. The cost to the consumer will be at a higher price over public charging, but is
expected to offer additional benefits such as convenience of location and/or
integrated IT services.
End-to-end or network operator solution offers the consumer a single point of
contact and provides the full service from the vehicle purchase through to its
operation (charging) and maintenance (battery and vehicle). Consumers are offered a
contract where they will pay a set fee each month for the running and maintenance of
their vehicle. Contracts vary but can include in-vehicle services, managed charging
and battery swap.
5.3 Solutions offered by ICT
ICT applications offer a range of solutions to overcome hurdles to FEV take-up. ICT can
facilitate technological enhancement, or facilitate new business models or value chains in
FEVs. Figure 16 summarises the ICT applications that contribute to overcoming hurdles.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 36
Figure 16: The role of ICT in overcoming hurdles to electric vehicle deployment
Photo courtesy of GM
5.4 Roadmaps for FEV deployment
Europe, along with many other world regions, has developed a number of roadmaps for
overcoming the barriers to FEV deployment. The study team reviewed and compared a
range of roadmaps from the major automotive markets.
All roadmaps target a very significant acceleration in deployment rates around 2020
Figure 17 compares deployment targets from different roadmaps. The period around 2020 is
almost universally seen as a key milestone, when deployment of FEVs enters the mass
market. This has implications for the Horizon 2020 programme: it will need to prepare
European industry for mass production of FEVs, not only to achieve European targets but to
be positioned for the growing export potential.
The roadmaps agree on the main barriers and technology areas for development
The consensus from roadmaps was that battery cost is the main barrier to deployment, and
accordingly battery technology development is one of the key focus areas. This is also seen
as a key strategic technology by many regions. Other common themes include provision of
public charging infrastructure, development of standards, and improvement of components
including motors and power electronics. ICT, and the development of a revised vehicle
architecture, are also commonly referenced.
Smart battery control• Helps to reduce battery cost by
maximising potential of cells
• Helps to improve battery
depreciation through increased
battery lifetime
• Could also facilitate battery
leasing models by feeding back
battery health informationRange extender
integration• Reduces range anxiety by
improving the driving range of
the vehicle
Optimising charging• Improving the ease and
convenience of charging, and
reducing charging times, will
improve consumer acceptance
Powertrain efficiency• Helps reduce the size and cost
of the battery (for a given vehicle
range) by improving vehicle
energy efficiency
• New motor designs using ICT
can reduce the reliance on rare
earth elements
Active load
management• Helps reduce the size and cost
of the battery (for a given vehicle
range) by improving vehicle
energy efficiency
Energy harvesting
systems• Helps reduce the size and cost
of the battery (for a given vehicle
range) by improving vehicle
energy efficiency
Grid integration (V2G)• Could reduce running costs of FEVs, by charging
at off-peak rates and/or generating revenue through
demand-side management; alleviates grid capacity
concerns
Drive by wire / safety• Battery safety systems help
address concerns over battery
stability and crash safety
Driver interface• Helps reduce range anxiety by
providing drivers with intelligent
information on vehicle range and
recharging options
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 37
Figure 17: Comparison of FEV deployment targets from different roadmaps
2015 2016 2018 2020 2025 2050
IEA, 2011 (global) 1.1m
EV/PHEV sales
7m
EV/PHEV sales
18m
EV/PHEV sales
106m
EV/PHEV sales
ERTRAC / EPoSS,
2010 (EU)
1m
EV/PHEV on the road
5m
EV/PHEV on the road
ICT4FEV, 2012
(EU)
1m
EV/PHEV on the road
20m
EV/PHEV on the road
USA, 2011 1m
EV on the road
Canada, 2010 0.5m
EV on the road
South Korea, 2010 1.2m
EV/PHEV produced
EU roadmaps are strong on technology development, but other world regions more
openly target commercial imperatives
The European roadmaps reviewed gave a comprehensive and detailed view of the technological development needed, and identify R&D needs. However, there is less emphasis on maintaining Europe’s competitive position. Roadmaps from other regions were more explicit in this area, as described below in Figure 18. In the future, European roadmapping exercises could integrate technology roadmaps with roadmaps for value chain development and securing a competitive industrial position, drawing closer links between technology and competitiveness.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 38
Figure 18: Different approaches found in FEV roadmaps
EU
- The roadmaps reviewed were strongly focused on technology
- R&D needs are identified in detail by technology domain
- Technology maturity targets are set by technology
- Deployment targets are set by number of vehicles on the road
USA
- Sets targets for the cost, power density and specific power of battery
systems, and the efficiency of the electric drive train
- Similar technological focus to EU roadmaps
Canada
- Sets a target for the Canadian content (in parts and manufacture) of FEVs
- Sets targets for factors influencing uptake, e.g. cost of ownership
- Specific chapters on new business opportunities and new business
models
S. Korea
- Has roadmap targets for production as well as R&D
- Socio-economic impacts estimated including job creation and domestic
and export sales value
China
- FEV strategy integrated into industrial policy (e.g. move towards high
value manufacturing activities)
- Identifies FEVs as one of seven ‘strategic emerging industries’
- Environmental benefits seem secondary to strategic importance
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 39
6 Objective D: environmental and
health impacts
The aim of Objective D: Assessment of Environmental and Health Impacts is to assess the
environmental and health impacts of the deployment of electric vehicles compared with other
types of vehicle. The specific aims were:
• To assess the environmental and health impacts of the widespread deployment of
electric vehicles vs. petrol, diesel and hybrid vehicles
• To identify weaknesses and threats to the potential environmental and health
benefits of electric vehicles
• To investigate the role of ICT and smart systems in overcoming these
weaknesses and threats
6.1 The vehicle life cycle
Emissions of greenhouse gases (GHGs) and air pollutants have harmful effects on human
health and the environment. These emissions are produced at various stages of a vehicle life
cycle, from its manufacture to its disposal or recycling. Figure 19 shows the vehicle life cycle.
Our lifecycle analysis compares four types of vehicle:
Petrol internal combustion engine vehicle (ICEV): A car utilising an internal
combustion engine fuelled by gasoline;
Diesel ICEV: A car utilising an internal combustion engine fuelled by diesel;
Petrol hybrid electric vehicle (HEV): A ‘full hybrid-electric’ car utilising an internal
combustion engine fuelled by petrol in parallel with an electric motor and battery,
allowing for limited vehicle operation in pure electric mode and regenerative braking
but not external charging of the battery;
Battery electric vehicle (BEV): A fully electric car utilising an electric motor powered
exclusively by a rechargeable battery.
We compared the impacts of each vehicle over the life cycle, in the following areas:
Global warming potential due to the emissions of greenhouse gases;
Acidification potential, eutrophication potential, photochemical pollution, and
particulate matter concentrations due to the emissions of air quality pollutants.
The impacts were monetised using well-established estimates of their external costs, in order
to compare the complete impacts of each vehicle and life cycle stage on a like-for-like basis.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 40
Figure 19: Overview of a vehicle lifecycle
During vehicle manufacture, the type and size of battery is likely to be the most
important factor influencing differences between vehicle types
ICEVs typically have a relatively small lead-acid battery, whereas BEVs have a much larger
battery to provide motive power. The extraction and processing of the various raw materials
needed to make the battery can lead to significant emissions; therefore in general BEVs
have higher “embedded” emissions compared to ICEVs. External costs from the
manufacturing stage of a BEV could be over 75% higher compared to a conventional ICEV,
and around 11% higher compared to a HEV.
Based on a typical European electricity generation mix, the fuel production impact for
BEVs is higher compared to impacts from petrol or diesel production.
The impact of the fuel production stage for BEVs is heavily influenced by the electricity
generation technologies used. Electric vehicles use electricity from the grid to recharge their
batteries, which leads to emissions of air pollutants upstream at power stations. These
emissions can vary widely depending on the electricity generation mix. Based on the present
day EU-wide mix, the fuel production impact from BEVs is around 15-30% higher than for
ICEVs. As the grid decarbonises, the impact of electricity production is expected to
significantly reduce.
BEVs are significantly more energy efficient than ICEVs over the full fuel cycle
In a typical fuel cycle for a diesel ICEV, only around 15-20% of total primary energy is turned
into motive power, whereas for a BEV around 40% is turned into motive power. Figure 20
shows the energy losses over the fuel cycle, from fuel production to motive power.
Reductions of in-use emissions are an important advantage of using electric-powered
vehicles – even compared to the strictest tailpipe emission standards ICEVs
The by-products of combustion in ICEVs include many harmful pollutants that are expelled
through the vehicle’s exhaust pipe. In contrast, the in-use (tailpipe) emissions of BEVs are
zero, so their only impact arises from particulate matter generated by tyre/road wear (non-
tailpipe emissions). This means that the external costs from the in-use stage are reduced by
over 90% for BEVs compared to ICEVs.
Vehicle production
• Raw materials
• Assembly
• Transport
Fuel production
• Production
• Processing
• Transport & distribution
Vehicle operation
• Tailpipe
• Tyre & brake
End of life
• Disposal
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 41
Figure 20: Overview of energy chain efficiency in BEVs (top) compared to diesel
ICEVs (bottom). [Source: adapted from Swiss Federal Office of Energy33]
The treatment of batteries is a key difference between the end-of-life impact of ICEVs
and BEVs
However, vehicle disposal accounts for only a small percentage of overall lifecycle impacts.
Some studies also include the impacts of recycling, as this could offset emissions during the
manufacturing stage. Battery recycling in particular could significantly reduce the lifecycle
impacts of electrically-powered vehicles with a large battery.
33 Swiss Federal Office of Energy, 2011. Accounting for EVs in EU CO2 regulation from cars: a Swiss Perspective.
En
erg
y I
np
ut
100%
Useful work
~40%
~5%: Elec. transmission
~6%: Battery
~4%: Electric motor
~4%: Mechanical drivetrain
~36%
Power generation~8%
Fuel production
CO2
En
erg
y I
np
ut
100%
Useful work: ~15-20%
~7%: Mechanical drivetrain
~64%
Diesel engine~9%
Fuel production
CO2
Ele
ctr
ic V
eh
icle
Die
se
l V
eh
icle
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 42
6.2 Life cycle analysis for present-day vehicles
Our analysis compares vehicles in 2015, once the Euro 6 vehicle emission standards
come into force.
In 2015, all new vehicles sold in the EU will have to comply with stricter Euro 6 standards on
emissions of air quality pollutants. Since these vehicles will have a significantly lower
environmental impact than older vehicles, it is appropriate to compare electric vehicles with
ICEVs complying with this standard for a clear view of future benefits.
The total life cycle external costs are lower for a BEV than other vehicle types.
External costs (for impacts covered in this study) for BEVs are 28% lower compared to a
petrol HEV, and around 40% lower compared to petrol and diesel ICEVs. HEVs achieve
around 10-20% lower impacts than ICEVs. FEVs are likely to be between these two
extremes, depending on the configuration and electric-only range.
In-use emissions have historically had the largest impact; however for BEVs the
manufacturing stage is more significant.
Traditionally, the in-use emissions are responsible for a large proportion of a vehicle’s overall
environmental impact. However, as in-use emissions are very low for BEVs, the other stages
of the life cycle become more important. Around half of life cycle external costs from a BEV
arise during the vehicle manufacture. In the future, with the decarbonising of electricity
production leading to a reduction of in-use emissions in particular, this share is likely to
increase.
Figure 21: External cost for whole life cycle, split by stage in 2015 (€ per 1,000
vehicle-km)
Notes: All vehicles are assumed to meet or exceed Euro 6 emission limits. Non-tailpipe emissions include
particulate matter generated by tyre, road and brake wear.
Greenhouse gases (GHGs) are the largest external cost for all vehicle types.
49%
33%
16%
17%
42%
19%
19%
23%
43%
56%
51%
0 5 10 15 20 25
BEV
HEV Petrol
ICE Diesel
ICE Petrol
Impacts from all stages of life cycle (€ per 1,000 vehicle-km)
Vehicle manufacture Fuel production In-use (Tailpipe) In-use (Non-tailpipe) End of life
19.2
20.5
16.7
12.0
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 43
For BEVs, GHGs account for 49% of external costs; this rises to 56-60% for HEVs and
ICEVs. Historically it has been the air pollutant emissions from vehicle operation that have
received the most attention, due to the visible impacts they had in surrounding areas (e.g.
smog and poor air quality in cities), but tighter emission standards have dramatically reduced
the emissions of air pollutants from modern vehicles.
Figure 22: External cost for whole life cycle, split by emission type in 2015 (€ per
1,000 vehicle-km)
The lifecycle GHG emissions are lower from a BEV than other vehicle types
Life cycle GHG emissions from a BEV are 45% lower than an ICEV running on petrol or
diesel and 37% lower compared to a petrol HEV. BEVs have far higher GHG emissions from
vehicle manufacture – around 70% higher than ICEVs – but this is more than compensated
for by the lower in-use emissions.
6.3 Future developments in environmental & health
impacts
The lifecycle analysis found that BEVs are expected to have smaller environmental and
health impacts compared to other vehicle types. Figure 23 outlines five key factors that could
affect the net costs and benefits of electric vehicles in the future.
49%
59%
56%
60%
23%
15%
9%
10%
18%
17%
26%
20%
0 5 10 15 20 25
BEV
HEV Petrol
ICE Diesel
ICE Petrol
Impacts from all stages of life cycle (€ per 1,000 vehicle-km)
Global warming Acidification Eutrophication Photochemical oxidation Particulate matter
19.2
20.5
16.7
12.0
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 44
Figure 23: Key factors affecting the environmental and health impacts of FEVs
Key factors that will affect net costs and benefits of FEVs
Electricity generation
The EC aims to reduce of GHG emissions from electricity production
by 54-68% by 2030, and 93-99% by 2050 relative to 1990 levels. If
these targets are achieved, in-use GHG emissions of an electric
vehicle would be dramatically reduced. Even if manufacturing and
end-of life GHG emissions remained constant, the planned
electricity decarbonisation would reduce the lifecycle GHG
emissions of a BEV by 18% in 2030 and 43% in 2050.
Optimized recharging
Optimized recharging is central to the environmental case for FEVs.
Without recharging optimisation, FEVs could cause an increase in
net emissions, since higher emission generating sources would be
needed to meet the additional peak electricity demand. Optimized
recharging would decrease net emissions for all levels of FEV
penetration, and could improve the utilisation of intermittent
renewables by charging during periods of over-supply.
Additionality of GHG reductions
The European Commission has mandated that from 2020 onwards,
the average emissions from a new car fleet will not be more than
95g CO2/km. This will mean that car manufacturers will have to
implement numerous technologies to achieve these fleet wide
reductions. The introduction of some FEVs into the fleet would allow
manufacturers achieve this target in a more cost effective manner
(particularly with super-credits), but may not lead to GHG reductions
beyond that which would have been achieved anyway.
Shared vehicle ownership and mass integrated public transportation
offer alternatives to vehicle ownership that could improve societal
health and makes efficient use of space. Therefore it is important to
understand what type of transport is being displaced by electric
vehicles to assess the net impacts.
Battery production & lifetime
The vehicle battery accounts for over 40% of the embedded
emissions of an EV, and over 40% of emissions from battery
production are from electricity consumption during manufacture.
Replacement batteries (if more than one battery is required during
the vehicle lifetime) significantly increase the lifecycle GHG
emissions of an EV, in the order of 20%.
Utilising the BEV battery for bi-directional charging for grid balancing
could also have a detrimental impact on the battery life due to the
additional charge/discharge cycles the batteries would undertake.
Performance and uptake of biofuels
There is significant uncertainty as to the volumes of sustainable
biofuel that may be available in the future and the net GHG savings,
primarily due to issues surrounding indirect land use change. If low-
carbon biofuels are available in large quantities at low cost, the
environmental benefits of electric vehicles over ICEVs will be
eroded.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 45
6.4 The role of ICT in the environmental & health impacts
of FEVs
ICT can improve the environmental performance of FEVs in a number of ways, as shown in
Figure 24:
Figure 24: The role of ICT in improving environmental and health benefits of FEVs
Photo courtesy of GM
ICT is needed for smart charging to improve emissions from electricity generation
The optimal charging strategy to minimise emissions is through a controlled or bidirectional
strategy that maximises the use of charging at times of low demand / high supply, and that
can be to inject energy into the grid for local load balancing.
ICT can maximise the battery life and usable capacity through thermal and electrical
management
ICT can monitor and respond to temperature changes in different cells of the battery, to
maintain an environment that is optimal for battery life and energy release. The battery
management system can preserve cells by charging and discharging them more evenly.
A centralised ICT architecture can improve vehicle efficiency and simplify
manufacture and recycling
Different functional systems could installed as software, as opposed to being managed by
separate control units. This would increase the efficiency of the vehicle and also reduce the
manufacturing and recycling needs caused by multiple control units.
Battery
managementMaximising the utilisation,
lifetime and performance
of batteries to reduce the
environmental footprint of
battery manufacture
Vehicle efficiencyImproving the overall
efficiency through
advanced control and
power management and
a centralised architecture
Smart chargingTo ensure that low-carbon
electricity can be used,
and as part of a strategy
to facilitate a low-carbon
grid mix
Driver aidsOptimising route and
driving style decisions to
reduce energy
consumption
Advanced &
regen. brakingMore precise control
could mean that the level
of tyre wear could be
reduced through the
development of specific
FEV traction control
system that minimise
some of the causes of
tyre wear, such as
skidding or wheel
spinning.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 46
ICT can provide driver aids to improve driving efficiency
When driving a vehicle, the largest variable impacting on vehicle efficiency is the driver; by
helping the driver through various ‘nudges’, the in-use efficiency can improve. This could
extend to semi-autonomous or autonomous driving.
Advanced regenerative braking would reduce in-use energy consumption and also
reduce the PM emissions from tyre and brake wear
If utilising an electric motor and electric steering, an FEV offers an additional level of control
over that of an ICEV. More precise control could mean that the level of tyre wear could be
reduced through the development of specific FEV traction control system that minimise some
of the causes of tyre wear, such as skidding or wheel spinning.
6.5 The role of FEVs in decarbonising the European
transport sector
To assess the role of FEVs in wider attempts to decarbonise the EU transport sector, several
scenarios, adapted from previous European Commission scenario modelling, were
compared. AEA’s Sustainable Transport (SULTAN) Illustrative Scenarios Tool has been
used to perform this analysis. Scenarios run to 2050, and all modes of transport are included,
though only passenger cars are analysed in detail.
Three scenarios were investigated, all compared with a business-as-usual (BAU) scenario
where no further policies or measures are implemented. The scenarios were:
Core GHG reduction scenario: This scenario is consistent with achieving the target
of 60% reduction in GHG emission included in the 2050 Roadmap and the Transport
White Paper. In passenger cars, FEVs account for 5% of new vehicle registrations in
2020, rising to 23% by 2030 and over 50% by 2045. This scenario is broadly
comparable with European Commission scenarios published as part of the Transport
White Paper analysis.
Low biofuel performance scenario: This scenario investigates the risk the
availability of, or GHG reductions achievable from, biofuels is lower than currently
anticipated. The scenario assumes that both biofuel deployment levels and GHG
reduction potential stay at the level attained in 2020 through to 2050. This leaves a
significant shortfall in GHG reductions; this gap is closed by increasing the
penetration of FEVs to 13% of new vehicles in 2020, 62% by 2030 and virtually all
new vehicle sales in 2040. This represents a likely upper case for FEV deployment.
Low electricity decarbonisation scenario: This scenario investigates the risk that
European policy to reduce the GHG emissions from the electricity sector is partially
unsuccessful, achieving a 65% reduction on 1990 levels rather than the planned 93%
reduction. As a result, FEVs will achieve less GHG emission savings than in the core
scenario.
The results are summarised in Figure 25:
The blue line shows the total abatement achieved in the passenger car sector under
the core GHG reduction scenario.
Core GHG reduction scenario (solid green line): Under this scenario, FEVs could
contribute to GHG emission reduction of approximately 889 MtCO2e across the
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 47
period 2010 to 2050. This equates to around one quarter of all GHG emissions
reduction from the passenger car sector, or around 9% of the total abatement from
the transport sector as a whole. The resultant savings in monetised external costs
provided by FEVs is estimated to be €7.4 billion per annum by 2050.
Low biofuel performance scenario (upper dashed line): The significant increase
in FEV deployment compared with the core scenario (114% between 2010 and 2050)
means that they account for 90% of the total savings resulting from passenger cars
between 2010 and 2050, and nearly one third of the savings achieved from the entire
transport sector.
Low electricity decarbonisation scenario (lower dashed line): Total GHG
emission savings from FEVs in the period 2010 to 2050 are approximately one third
that of the savings achieved in the core GHG reduction scenario. In this scenario,
FEVs account for around 5% of total abatement in the transport sector in 2050.
Figure 25: Abatement potential of FEVs under three scenarios (compared with
business-as-usual)
Comparing our results with other market deployment projections, our central “core GHG
reduction” scenario appears to be a conservative estimate for the deployment of FEVs, and it
seems likely that FEVs will provide over a quarter of the total abatement from passenger cars
in the period between 2020 and 2050. This equates to around 9% or more of the abatement
needed from the transport sector as a whole to achieve 2050 targets.
Total abatement from cars to
meet 60% reduction target
Abatement from FEVs: “core
GHG reduction” scenario
Abatement from FEVs: “low biofuel
performance” scenario
Abatement from FEVs: “low electricity
decarbonisation” scenario
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 48
7 Objective E: analysis of socio-
economic impacts
The aim of Objective E: Analysis of socio-economic impacts is to assess the potential
contribution of fully electric vehicles towards achieving the objectives set out by flagship
European socio-economic policies.
Three specific aims were identified within this analysis:
To qualitatively examine the potential contribution of FEVs towards European flagship
socio-economic policies;
To provide quantitative estimates of the potential socio-economic contribution of
FEVs through the use of related metrics;
To assess the role of specific ICT applications in the future socio-economic benefits
of FEVs using a multi-criteria analysis (MCA).
7.1 Qualitative assessment of the socio-economic
contribution of FEVs
Electric mobility has the potential to make a strong contribution towards Europe’s socio-
economic vision in the medium term (to 2020) and the long term (to 2050). A number of
flagship socio-economic policies are in place in Europe that target development over these
timescales. The main objectives of these policies are outlined in Figure 26.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 49
Figure 26: European flagship policies considered in this study
European flagship policies
Resource Efficient Europe
“To support the shift towards a resource efficient and low-carbon
economy that is efficient in the way it uses all resources. The aim is
to decouple our economic growth from resource and energy use,
reduce CO2 emissions, enhance competitiveness and promote
greater energy security.”
Innovation Union
“To improve framework conditions and access to finance for
research and innovation so as to ensure that innovative ideas can
be turned into products and services that create growth and jobs.”
Industrial Policy for the Globalisation Era
“To support entrepreneurship, to guide and help industry to become
fit to meet these challenges, to promote the competitiveness of
Europe’s primary, manufacturing and service industries and help
them seize the opportunities of globalisation and of the green
economy.”
Digital Agenda for Europe
“to deliver sustainable economic and social benefits from a digital
single market based on fast and ultra-fast internet and interoperable
applications.”
2050 Low Carbon Economy
“To present a Roadmap for possible action up to 2050 which
could enable the EU to deliver GHG emission reductions in line
with the 80 to 95% target.” (2050 roadmap)
“Set out the EC vision for the future of the EU transportation
system and defines a policy agenda for the next 10 years to
move towards 60% reduction in CO2 emissions.” (Transport
White Paper)
FEVs can provide socio-economic benefits through market and industry development
A qualitative view of the potential socio-economic benefits of FEVs finds that they can
produce benefit in two ways:
1. FEV deployment in Europe (wherever the FEVs are produced) has the potential to
benefit Europe, for example by improving energy efficiency, energy security, local air
quality and reducing greenhouse gas emissions;
2. A strong European FEV manufacturing and service industry, where a large
portion of the FEV value chain is situated within Europe, has the potential to benefit
Europe’s economy by providing economic growth, employment and a platform for
wider innovation and technology cross-fertilisation.
Figure 27 and Figure 28 below outline the potential socio-economic benefits of FEVs in each
of these areas.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 50
Figure 27: Qualitative assessment of the socio-economic contribution of FEVs
through development of a strong European FEV market
Potential contribution of FEVs – development of market Relevant flagship
policies
Reduced reliance on fossil fuels by increasing energy
efficiency and offering primary energy flexibility (i.e. electricity
generation mix), resulting in enhanced energy security.
Resource Efficient
Europe; 2050 Roadmap;
Transport White Paper;
Energy Roadmap
Reduced / zero tailpipe emissions of GHGs whilst also having
co-benefits, including improved local air quality and reduced
noise and resulting a reduction in the negative impacts of road
transport on public health.
Resource Efficient
Europe; Industrial Policy
for the Globalisation Era;
Transport White Paper
Contribution to achieving GHG reduction targets for 2020,
2050 (though unlikely to be deployed in significant numbers by
2020 to make a large contribution, their contribution in 2050
could be significant).
Resource Efficient
Europe; 2050 Roadmap;
Digital Agenda for Europe;
Transport White Paper;
Energy Roadmap
Improved energy efficiency leading to reduced energy
consumption from the transport sector.
Resource Efficient Europe
Deploying FEVs with ICT offering the potential for more
efficient and less energy-consuming intelligent transport
systems.
Digital Agenda for Europe
Figure 28: Qualitative assessment of the socio-economic contribution of FEVs
through development of a competitive European FEV manufacturing and
service industry
Potential contribution of FEVs – development of industry Relevant flagship
policies
Creation of (net) new value chains, jobs and wealth,
particularly in ICT and smart systems.
Innovation Union
Maintaining technological leadership in Europe in a market
segment that is predicted to grow strongly in the EU and
globally.
Industrial Policy for the
Globalisation Era
Generation of new EU industry in technologies and products
that are likely to see significant market growth in Europe and
internationally, e.g. telematics, automotive batteries
Industrial Policy for the
Globalisation Era
FEVs offer a digital platform for a range of ICT and smart
system innovations, drawing on developments in other sectors
– potential for wealth creation and social benefits.
Digital Agenda for Europe
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 51
7.2 Quantitative assessment of the socio-economic
contribution of FEVs
This section provides quantitative estimates for some of the potential socio-economic
benefits of FEVs. Quantitative estimates are taken from the literature where available, and
from analysis of a number of scenarios for future deployment of FEVs. The following
scenarios were developed and analysed using AEA’s SULTAN illustrative scenarios tool:
Business-as-usual (BAU) scenario: This scenario assumes no new policies or
measures are implemented, and is consistent with the European Commission’s BAU
developed in the modelling for the Transport White Paper. This is the baseline
against which other scenarios are compared.
Core GHG reduction scenario: This scenario is consistent with achieving the
transport sector target of 60% reduction in GHG emissions included in the 2050
Roadmap and the Transport White Paper, and is broadly comparable with European
Commission scenarios published as part of the Transport White Paper analysis.
Low biofuel performance scenario: This scenario investigates the risk the
availability or GHG reduction potential of biofuels are lower than currently anticipated.
It assumes that both biofuel deployment levels and GHG reduction potential stay at
2020 levels through to 2050. This leaves a significant shortfall in GHG reductions; this
gap is closed by increasing the penetration of FEVs. This represents a likely upper
case for FEV deployment.
Low electricity decarbonisation scenario: This scenario investigates the risk that
European policy to reduce the GHG emissions from the electricity sector is partially
unsuccessful, achieving a 65% reduction on 1990 levels rather than the planned 93%
reduction. As a result, FEVs will achieve less GHG emission savings than in the core
scenario.
Figure 29 shows the levels of FEV deployment projected under the FEV scenarios, and
compares them with other projections. It can be seen that both scenarios fall within the range
of market estimates for FEV deployment between 2015 and 2020, and the ‘core GHG
reduction’ scenario is at the conservative end of these estimates.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 52
Figure 29: Comparison of projections for growth in FEV registrations showing
AEA’s SULTAN scenarios
Notes:
Universität Duisburg Essen (2012) figures taken from a 2012 study carried out for DG ENTR34
.
Range of market estimates taken from AEA literature review; more details are in the Objective A report (landscape analysis)
Notes for Figure 30 (overleaf)
a – GHG emissions are measured on a lifecycle ‘well-to-wheel’ basis, i.e. including both direct emissions at the point of use (e.g.
engine exhaust) and indirect emissions from fuel extraction, processing and delivery to market.
b – The SULTAN energy security metric is a semi-quantitative measure of energy security on a scale of 0-100 (100 is highest
energy security). It is an average of six metrics that impact on energy security: oil cost factor, fleet readiness, cost, surplus
capacity, supply resilience, and resource concentration.
c – Value is 0.017; total change in energy security metric to 2020 is very small (0.839) so this is a non-trivial percentage.
d – Due to the sources and assumptions used to produce this estimate, this figure is likely to be conservative.
e – Figure is for direct employment (vehicle manufacturing and R&D) only. Indirect employment includes the supply chain and
aftermarket services.
34 Universität Duisburg Essen (2012), Competitiveness of the EU Automotive Industry in Electric Vehicles, Final Report for European Commission
DG Enterprise
-
5
10
15
20
2015 2020 2025 2030 2035 2040 2045 2050
New
FE
V v
eh
icle
reg
istr
ati
on
s i
n t
he E
U-2
7 (
millio
n v
eh
)
SULTAN - 'low biofuel performance' scenario
SULTAN - 'core GHG reduction' scenario
Universität Duisburg Essen (2012)
Range of market estimates(Objective A)
Market saturation reached
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 53
Figure 30: Quantitative metrics for the socio-economic contribution of FEVs in Europe
Metric Relevant flagship
policies Impact in 2020 Impact in 2050
Climate change
mitigation
GHG reductions achieved
due to FEV deployment in
the European passenger
car sector
2050 Low Carbon
Economy
FEVs will be responsible for GHG
emission reductionsa of 1.6 MtCO2 eq per
year by 2020
(range of estimates: 1.4 - 6.5)
FEVs will be responsible for GHG
emission reductionsa of 68.0 MtCO2 eq per
year by 2050
(range of estimates: 41.5 – 240.0)
Energy security
Reduction in final energy
consumption achieved due
to FEV deployment in the
European passenger car
sector
2050 Low Carbon
Economy; Resource
Efficient Europe
FEVs are expected to lead to final energy
consumption reductions of 23 PJ per year
by 2020
(range of estimates: 23 - 82)
FEVs are expected to lead to final energy
consumption reductions of 757 PJ per
year by 2050
(range of estimates: 757 – 1,469)
Change in SULTAN
energy security metric due
to FEV deployment in the
European passenger car
sector
2050 Low Carbon
Economy; Resource
Efficient Europe
FEVs are expected to lead to an
improvement in the SULTAN energy
security metricb of 0.01
c (2% of total
improvement) by 2020
(range of estimates: 0.0 – 0.2)
FEVs are expected to lead to an
improvement in the SULTAN energy
security metricb of 10.3 (44% of total
improvement) by 2050
(range of estimates: 10.3 – 25.0)
Industrial
competitiveness
Projected annual sales of
FEVs in Europe
Industrial Policy for
the Globalisation Era
FEV sales in Europe are predicted to be
900,000 per year by 2020 (5% of total
sales)
(range of estimates: 0.9 – 2.5 million)
FEV sales in Europe are predicted to be
13.7 million per year by 2050 (63% of
total sales)
(range of estimates: 13.7 – 21.6 million)
Projected value of ICT in
FEVs, in Europe and
globally
Industrial Policy for
the Globalisation Era;
Innovation Union
The global market value for ICT content in
FEVs is predicted to be €13 billion per
year by 2020 (€1.7 billion in Europe) d
The global market value for ICT content in
FEVs is predicted to be €198 billion per
year by 2050 (€26 billion in Europe) d
Net gains in employment
due to FEVs in Europe
Industrial Policy for
the Globalisation Era;
Innovation Union
Deployment of FEVs in Europe is expected to lead to net gains in direct employment of
100,000 jobs between 2010 – 2030e
(range of estimates: 63,000 – 126,000)
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 54
Under our scenarios, the socio-economic impact of FEVs is modest to 2020, but
increases significantly thereafter
Figure 30 provides a summary of the metrics used to provide a quantitative estimate of the
socio-economic impacts of FEVs to 2020 and 2050. It can be seen that all of the impacts
estimated for 2020 are relatively modest; this reflects the low penetration of FEVs projected
in the EU by 2020 (our ‘core GHG reduction’ scenario assumes FEVs will account for around
5% of new passenger car registrations in 2020). However, as Figure 29 shows, a marked
acceleration in FEV deployment is expected between 2020 and 2030, and as a result the
socio-economic impacts of FEVs are much higher in later time periods.
FEVs make little contribution to GHG emission reductions to 2020 but could account
for a quarter of the GHG reductions achieved in passenger cars from 2020-2050
Low deployment levels under our core scenario mean that in 2020, FEVs contribute around
15% of the total GHG abatement achieved in cars (vs. business-as-usual). However, from
2030 onwards the significant acceleration in deployment, coupled with a decarbonising
electricity sector, mean that FEVs account for around a quarter of total reductions from cars,
or around 9% of the total GHG reductions needed in the transport sector. However, under
the more aggressive ‘low biofuel performance’ scenario, FEVs account for around one third
of the total transport sector abatement over the same period.
FEVs could account for over a third of the total reduction in final energy consumption
achieved in the passenger car sector
FEV deployment forms a major part of the overall reduction in passenger car final energy
consumption between the business-as-usual and ‘core GHG reduction’ scenarios; around
17% in 2020, rising to 60% in 2030 and levelling off at just under 40% of the total reduction
between 2030-2050. Under the ‘low biofuel performance’ scenario, energy savings from
FEVs are more than double those in the core scenario.
FEVs could account for over a third of the total improvement in energy security
achieved in the passenger car sector after 2030
FEVs have little impact on energy security (as measured through a semi-quantitative metric)
to 2020 under our scenarios. This is partly due to low deployment levels, and also because
until beyond 2020, petrol and diesel supplies are not considered critically unsecure under our
metrics. However, from 2030, FEV deployment accounts for over a third of the total
improvement in energy security compared to the business-as-usual scenario.
The total size of market for ICT in FEVs that is accessible to European companies
could be several billion Euros per year by 2020, and tens of billion Euros by 2050
A conservative estimate for the market value of ICT in FEVs puts the European market at
around €2bn per year in 2020, and €26bn per year by 2050. However, if European
companies can access growing export markets, they could take a share of a global market
that is worth around ten times this in total.
Net employment gains are predicted in the literature, but no comprehensive study was
found that assessed all the indirect impacts on employment
The transition of the European automotive industry from combustion engines to FEVs is likely
to have complex and profound impacts on the number and type of jobs available. In addition,
the change in trade flows (less European imports of oil for gasoline and diesel, but more
demand for electricity and FEV materials and parts) will have secondary impacts on
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 55
employment. The studies found in the literature in general found that a successful transition
would lead to net job creation, but a thorough assessment of the economic impacts, though
difficult, would be a valuable addition to the body of evidence.
7.3 Socio-economic contribution of potential ICT
applications
In general, future ICT applications for the FEV were found to contribute towards European
flagship socio-economic policies through a combination of four main impacts:
• Improving vehicle uptake. ICT applications can increase the uptake of FEVs by
making them more attractive to consumers, either by decreasing the price (the
most significant factor determining uptake, according to our research) or
increasing the utility (i.e. the ‘usefulness’) of the vehicle. ICT applications that
reduce the battery requirement, through increased energy efficiency or by
integrating energy harvesting or range extenders, can help to bring down FEV
costs in the near term.
• Opening new markets or value chains. ICT applications can create new
platforms that provide opportunities for businesses to offer products and services
to add value to the consumer experience and the wider economy. In particular,
ICT that facilitates ‘V2X’ communications is seen to offer the potential for entirely
new services.
• Increasing EU manufacturing. ICT applications that are commercialised in
Europe can increase the value of goods that are manufactured in the EU - either
by increasing the volume of existing products manufactured in the EU, or by
manufacturing new products in the EU that were not previously manufactured
there. ICT applications where Europe has an existing strength, such as power
electronics, semiconductors, electric motor control and combustion engine control
and integration (for range extenders) are seen as key areas with potential to boost
EU manufacturing. In other domains, whilst other world regions have a strong
position at present, innovations in technologies that are not yet mature could lead
to opportunities for European companies that can act quickly to commercialise
them.
• Reducing vehicle energy intensity. ICT applications can reduce the amount of
energy needed to transport passengers on a given journey, either by increasing
the vehicle energy efficiency or improving the efficiency of the transport system in
general (e.g. intelligent route finding). The main benefit of improved FEV energy
efficiency is the reduced battery requirement for a given vehicle range, which has
a significant impact on vehicle cost.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 56
Objective F: conclusions and
recommendations
The aim of Objective F: Conclusions and Recommendations is to draw together evidence
from the previous objectives in the study and to arrive at conclusions on future objectives and
actions that can be used to inform strategy under the next Framework Programme, titled
Horizon 2020, which runs from 2014 to 2020.
7.4 Overview of recommendations
This section identifies 20 objectives that the study team have identified as signposts to
success in the field of ICT for the fully electric vehicle over the next two decades. These can
be grouped into four categories:
1. Developing technologies and services: recommendations on technological areas
of focus over the next two decades, divided into ICT for the fully electric vehicle, and
related technologies where ICT can play an important role ;
2. Supporting a European value chain: recommended objectives for ensuring a
strong, globally competitive European value chain in ICT for FEVs;
3. Stimulating innovation in Europe: recommended objectives to create an
environment where innovation in ICT for FEVs can flourish in Europe, leading to
value creation;
4. User acceptance: recommended objectives to ensure that Europeans understand
the benefits (and drawbacks) of FEVs, in order to create a strong FEV market.
In addition, we have identified four cross-cutting impacts that are the overarching aim of all
the recommendations:
1. Industrial competitiveness is the cornerstone of the ‘Industrial policy for the
globalisation era’ flagship policy, recognising the socio-economic benefits that a
competitive European industrial sector can provide.
2. Value creation / growth is also at the centre of both the ‘industrial policy for the
globalisation era’ and ‘innovation union’ flagship policies, and underpins economic
development.
3. Market development is important as many of the potential socio-economic benefits
of FEVs are not realised until they are deployed at a large scale. In addition, a strong
European market is likely to positively impact on industrial competitiveness.
4. Sustainability is the underlying theme of Europe’s plan for a 2050 low-carbon
economy. Sustainability is one of the key policy drivers behind the introduction of
FEVs, and as such should remain a focus.
Figure 31 provides a graphical overview of the recommendations.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 57
Figure 31: Areas for recommended objectives and desired impacts
Desired
impacts
Recommended
objectives
ICT
for
FEVs
ICT for
FEVs
Developing
technologies
and services
Supporting
a European
value chain
Stimulating
innovation
in Europe
User
acceptance
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 58
7.5 Recommended objectives
This section describes each of our recommended objectives in more detail.
7.5.1 Developing technologies and services – ICT in the fully electric vehicle
1
European OEMs to be amongst the leaders in the development of third
generation ‘ground-up’ designed FEVs with a revised ICT architecture
A ground-up redesign of the electric vehicle, taking advantage of all of the design
freedoms and opportunities for centralising the architecture, has not yet been achieved
by any OEM. Attempting this will require substantial investment in R&D and
manufacturing facilities, but could yield a revolutionary new FEV concept and/or
substantially reduce vehicle costs. ICT4FEV refer to this as the ‘third generation FEV’.
The European industry should work towards this goal with a view to being an early
player in the third generation FEV market. This could include radical new mobility
solutions as well as conventional vehicle concepts.
In particular, the third generation FEV concept will require a new ICT architecture, with
the goal of reducing complexity and number of components and interconnections,
whilst improving modularity. This goal is well defined in the ICT4FEV roadmap.
Advantages of this revised vehicle concept include the potential to reduce cost,
improve reliability and serviceability, and facilitate upgrade and eventual recycling of
components and systems. It is an enabler of many other potential innovations in FEVs
that are best implemented in this revised platform.
Achieving a revised ICT architecture is likely to require co-operation between a number
of industry players, as well as input from complementary industries (e.g. IT, industrial
automation and avionics). Europe is well positioned in this respect as one of the few
world regions that has world class R&D capability in all of these industries. It is also
likely to require new standards for communications and interoperability. Some experts
we interviewed believed that such standards will be needed in the next 5 years.
The ICT4FEV roadmap sets the goal for mass production on the third generation FEV
in 2025. This would indicate that the Horizon 2020 programme should focus on
developing the technologies, standards and value chains for delivering this concept at
scale beyond 2020. In particular, we believe that there is a role for the Framework
Programme and its PPP initiatives in bringing together different industry players to
develop a standardised architecture for the third generation FEV. Expert interviewees
cited AUTOSAR as a good example of how this could be done; they viewed the
process of developing AUTOSAR as difficult but with worthwhile outcomes.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 59
2
Maintain leadership in the research, development and manufacture of
automotive semi-conductors and power electronics for FEVs
There is a need to develop more efficient power electronics components in order to
maximise the range of FEVs. Research continues into the use of new materials to
create more efficient power electronics which can operate at ideal voltages.
Power electronics has been identified as a key strength for European companies, and
is a complex, high value-add technology which means barriers to entry are high and
low labour costs are less of an advantage. Europe also has a dominant position in
automotive semiconductor manufacture, which is likely to feature prominently in the
FEV value chain. However, this position is under threat from new market players, and
European suppliers are considering moving downstream manufacturing and hardware
design out of Europe to reduce costs.
There is a large and prosperous market for the semi-conductor industry, including
applications in power transmission and distribution, smart grids, wind and solar energy,
road and rail, and consumer electronics. The worldwide market is valued at €229
billion (Europe €29billion) in 2010. In the automotive sector, both FEVs and
conventional vehicles are expected to utilise an increasing level of ICT, with FEVs
leading in advanced content. Overall, the market for semiconductors and power
electronics is projected to remain very strong in Europe and internationally.
Experts we interviewed expressed the view that R&D in Europe is currently well
supported and delivering good results. They felt that the high investment cost needed
for production facilities was the main concern for companies looking to manufacture in
Europe. With this in mind, our recommendation for future European R&D is that the
existing strength in R&D projects is maintained, but that support is also offered to
assist the downstream value chain and encourage them to stay in Europe.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 60
3
Build on an existing strong communications infrastructure to become
a world leader in after-sales software and services, extracting the
maximum value from connected vehicle systems for FEVs
Europe is well placed to capitalise on the potential new value creation in after-sales
software and services, using ICT, connectivity and complementary technologies such
as smart phones. Europe has the necessary ingredients to achieve this:
• A large, relatively affluent, educated, customer base
• High levels of smart technology penetration (e.g. smart phones)
• Widespread and well-established wire and wireless communications
infrastructure
However, the US currently dominates the ‘connected vehicle’ marketplace, with many
European OEMs using US companies to supply vehicle telematics solutions. In this
area, software is the major value-add, as hardware is often standardised and not used
for brand differentiation. Therefore barriers to new entrants are relatively low.
Creating a strong FEV communications ecosystem, encompassing communication with
power networks and transport infrastructure, would create new value chains in
vehicle/transport system integration and vehicle/grid integration. Companies looking to
participate in these value chains would be very likely carry out research and
development in Europe. There are few other world regions with the necessary
ingredients to begin implementing these services.
European roadmaps indicate that first generation V2X technology should be
commercialised by 2016, with second generation technology being developed to be
implemented in the next generation of mass-produced FEVs in 2020. Therefore, the
objective during the Horizon 2020 programme would be to commercialise existing
technology in Europe at the same time as developing the next generation technology.
Experts identified standards as being key to developing ‘V2X’ (vehicle to vehicle,
infrastructure, grid, etc.) communications. They also felt that regulations, particularly on
safety and security, would need to be monitored to ensure that they are appropriate
and do not put unnecessary barriers in place of technology development. The EU has
a role to play in working with industry to develop standards and update regulation, and
ensuring that the regulatory framework ensures quality and safety for transport users
whilst providing a competitive environment in which to develop products and services.
Another key issue identified by experts was the need for co-operation amongst a large
number of players in the ‘V2X’ space in Europe. In one dimension, the complete
vehicle communications value chain encompasses hardware providers, telecoms
providers and telematics service providers. In another dimension, each country in
Europe has a number of charging service providers, road infrastructure operators etc.
A single European solution will require many of these players to work together.
Roaming and clearing house solutions are being addressed under the ‘Green eMotion’
project, but it is highly likely that development will need to continue beyond this project
and this would have the value of bringing the large number of vehicle, charging
infrastructure and utility providers together.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 61
4
Establish a European value chain for the research, development and
manufacture of batteries, their management systems and their
integration into FEVs
While Europe does have companies designing, developing and manufacturing electric
vehicle batteries, it does not appear to be challenging the dominant position of Japan
and South Korea in this area. However, only limited participation in this value chain
(i.e. most battery packs are imported into Europe, having been designed and
manufactured elsewhere) would mean significant revenues leaving Europe. This has
implications for the value of the European automotive industry.
Our analysis suggests that it will be difficult for Europe to gain a significant foothold in
the li-ion battery manufacturing value chain for current generation batteries. This is due
to the substantial know-how and IP held by other regions, notably Japan and South
Korea, and the very large sums of money already invested in manufacturing facilities in
these and other regions such as the USA. However, FEVs designed from the ground
up with a centralised control architecture will require very close co-operation between
the battery manufacturer and the OEM.
In addition, it is considered that manufacturing batteries in the target market will be
preferable due to the costs, risks and uncertainties in shipping full battery packs.
Therefore, we expect that a strong European FEV market would lead to batteries
packs being manufactured in Europe (though it is not clear how much of the upstream
activity will take place here). We would also expect an opportunity for OEMs to
contribute to the development of holistic power management systems that integrate
vehicle, infrastructure and battery control strategies. For the current generation of
batteries, our view is that Europe should aim to create favourable conditions for non-
European manufacturers selling batteries into Europe to locate manufacturing plant
here.
Some experts we interviewed believed that, whilst Europe has missed the opportunity
to lead the development of first-generation batteries, the world-class R&D that takes
place in Europe means that new technological breakthroughs in next generation
technology could be achieved and then commercialised in Europe. We feel that
Europe should target additional funding specifically at promising battery technologies
that are ending pre-competitive R&D to support their development into marketable
products. Some experts also recommended that Europe support R&D into production
techniques and investment in plant.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 62
5 Develop expertise in energy harvesting technologies
Technologies to improve energy recapture will be an essential part of increasing the
overall efficiency of future FEVs. Given the cost challenges facing battery technology,
affordable energy harvesting systems may be a more cost-effective way of extending
vehicle range in the medium term. In addition, if European-developed energy
harvesting technology reduces the need for batteries that are not produced in Europe,
the ‘made in Europe’ value of the FEV can be increased.
The primary opportunity is regenerative braking, where existing systems are often
unable to recapture all the available energy due to limitations in the speed at which the
battery can be recharged without overheating or sustaining possible damage.
However, combining effective recapture, storage and control technologies can
overcome this problem. In the medium term, energy harvesting from photovoltaics and
low-grade heat (e.g. from combustion engine exhausts) could also feature in FEVs.
Experts we interviewed reported that the inability to fully utilise regenerative braking
energy is one of the biggest losses of efficiency in current generation battery electric
vehicles. Whilst Japanese companies have developed extensive know-how through
leading hybrid powertrain development, some EU companies also have expertise from
their involvement in Formula 1 kinetic energy recovery system (KERS) technology.
Interviewed experts had the opinion that, at present, a range of technologies are being
developed through R&D, but that in the next 5 years the most promising technologies
need to be brought through to commercialisation. The ICT4FEV roadmap sets the goal
of optimised regenerative braking being ready for commercial use in 2nd generation
FEVs in 2016. This would indicate that developing the supply chains to bring energy
harvesting technologies to market should take place in the early part of the Horizon
2020 programme.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 63
6
Become a leader in the application of vehicle health management for
FEVs
Vehicle prognostics and health management (PHM) has a high relevance for FEVs,
particularly if a centralised architecture is preferred, where monitoring of the vehicle
battery, motor, software etc. can all be integrated to provide holistic health
management. Health management and prognostics for vehicle batteries offer a way to
reduce the risk to battery owners, whether they are individual FEV drivers or mobility
service providers. De-risking battery ownership would help to overcome one of the key
barriers to FEV deployment.
Interviewees active in this discipline stated that there is no single European
organisation or roadmap for prognostics and health management. This is a key area
for potential cross-fertilisation with the aviation industry. Some co-ordination exists at
the Member State level, but co-ordinated European planning could help to drive
development and foster links between industries that could make use of PHM,
including automotive, aviation and industrial automation companies. Some
interviewees speculated that the PPP model may work well for this purpose.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 64
7.5.2 Developing technologies and services – related technologies where ICT
can play an important role
7
Become the acknowledged world leader in integrating range extender
technologies into fully electric vehicles, with advanced powertrain
control systems
The European automotive industry leads the world in the design of small, efficient
combustion engines. It is projected that over half of the new vehicles sold in 2050 will
feature a combustion engine. However, the majority are expected to act as range
extenders in FEVs, gradually replacing conventional and hybrid powertrains. A more
gradual transition away from internal combustion engines to battery electric vehicles,
by the phased introduction of hybrids, plug-in hybrids and range-extender electric
vehicles, fits many experts’ view of the evolution of the passenger car market and may
suit European OEMs, who are heavily invested in internal combustion engine
technology.
In addition, range extenders help to overcome some of the key barriers to uptake of
FEVs today – namely, the high cost and low energy density of present-day batteries. In
this way, range extenders can be an enabler for mass-market uptake of FEVs.
Minimising the battery requirement also reduces the environmental impacts of vehicle
production and disposal, where batteries have a high impact due to the materials and
manufacturing processes used.
Europe has much proprietary technology in combustion engine design, and it is not
suggested that further pre-competitive R&D is needed in this area. However, the
control and integration of combustion engine range extenders into FEVs requires
integration into a vehicle powertrain management system. Europe could leverage its
existing strong position in internal combustion engine control to take a leading role in
the development of advanced control systems to integrate range extenders into FEVs.
This would include strategies for the control and optimisation of range extenders in an
overall power management strategy.
The ICT4FEV roadmap envisages several generations of range extender design, from
an optimised combustion engine to a highly integrated, modular design suitable for a
revised FEV architecture. It anticipates the first generation being market-ready by
2018, and development continuing into the 2020s. Therefore, Horizon 2020 would
need to support commercialisation of early range extenders in conjunction with
supporting development of next-generation technology.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 65
8
Achieve the successful full integration of FEVs with the electricity grid
through the use of bi-directional smart charging
Smart charging is pivotal to the environmental case for FEVs. Flexible scheduling of
vehicle charging to match demand and network capacity can avoid the need to use
expensive and carbon-intensive spinning reserve, and can reduce demand on
electricity distribution networks. This requires some level of communication between
vehicle and grid to determine when charging should take place. A market-based
solution would be a good end objective. Smart charging will become an important
requirement once FEVs achieve mass take-up, to prevent excessive peak loading. Our
research indicated that most spectators anticipate a significant increase in FEV uptake
between 2020 and 2030, therefore these solutions will likely need to be in place in the
2020s.
In the longer term, smart charging could become bi-directional, which can bring
additional benefits. Vehicles capable of feeding energy back to the grid could be used
for power balancing and grid stabilisation. One interviewee postulated that a group of
vehicles, aggregate into a single ‘virtual powerplant’, could potentially replace fixed
infrastructure in the EU energy market. This could allow FEV users to gain financial
returns by effectively increasing the utilisation of their battery. It is considered unlikely,
however, that FEVs could be used for larger scale energy storage, since the total
energy capacity would not be very large even with a relatively high penetration of
FEVs.
Managing the interaction between FEVs and the grid requires co-ordination and co-
operation between numerous participants in the value chain, including vehicle
manufacturers/mobility service providers, charging infrastructure providers, utilities,
grid infrastructure operators and consumers. It also requires the establishment of many
standards to ensure consistent operation between utilities and Member States. The
CARS21 consortium recently recommended that an EU platform be launched to
exchange information on best practice between companies and Member States. Co-
ordination and development of standards will also need to happen at a European level.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 66
9
Ensure the environmental impacts of the production and disposal
elements of an FEV’s life cycle are minimised
One of the primary motivations for incentivising the uptake of FEVs in Europe is to
reduce the environmental impact of road transport. Our analysis suggests that towards
2030, as the electricity mix undergoes significant decarbonisation, vehicle production
and disposal activities begin to dominate life cycle environmental impacts from FEVs
(particularly battery electric vehicles). At the same time, a surge in the uptake of FEVs
is expected between 2020 and 2030, meaning that FEVs account for a significant part
of overall vehicle production for the first time. It is therefore important to develop ways
of reducing these environmental impacts to ensure that FEVs continue to improve their
environmental performance. Minimising energy and material consumption in the
production stage and optimising material recovery and recycling at disposal can benefit
the automotive industry as well as helping to pre-empt potential criticism of FEVs in
comparison to conventional vehicles.
During our research, it became clear that the majority of work on quantifying the
environmental impacts of FEVs (particularly greenhouse gas emissions) has focused
on the use phase. As FEVs enter mass production, a more comprehensive life-cycle
analysis of FEVs, examining the supply chain, manufacturing and end of life, would be
a useful activity to understand the real environmental benefits of FEVs.
Our research indicates that the main production and disposal impacts of electric
vehicles are associated with the battery. Europe is developing promising technical
capability in battery recycling, which will be important as the batteries from first-
generation vehicles approach retirement in the next decade. A promising nascent
industry, coupled with an increasing supply of end-of-life batteries, presents an
opportunity for a strong future European industry.
Evidence gathered from field trials and consumer surveys indicates that early adopters
highly value the sustainability aspect of FEVs, including the use of renewable
electricity. Experts we interviewed also highlighted the importance of generating
positive stories around FEVs and sustainability as a way to improve their appeal. A
flagship “greenest FEV” demonstrator that prototyped the technologies capable of
improving the environmental performance of FEVs could help to highlight the
environmental benefits to consumers.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 67
7.5.3 Supporting a European value chain
1
Assist European OEMs to adapt to the electric vehicle value chain,
keeping inter-company collaboration within Europe to supply ICT in
FEVs
European OEMs face a shift in the value chain from ICEVs to FEVs that sees the value
move away from their core competencies (e.g. ICEV powertrain and after sales
components) to new areas (e.g. battery and mobility-related services). This is largely
being driven by legislation designed to reduce the environmental impact of road
transport. European OEMs have significant investments and know-how in ICEV
technology. In addition, they lag Japanese OEMs, who have built up significant IP and
know-how in electric powertrains through development and successful marketing of
hybrid vehicles. Overall, our assessment is that European OEMs are not particularly
well placed to make a swift transition to FEVs. OEMs from other world regions may see
this as an opportunity to challenge for market share in the European passenger car
market, which is unlikely to see overall growth in the next few decades.
Therefore, European OEMs will need to decide on strategic moves to protect their
position – either developing new skills, acquisition of key technologies, strategic
alliances or broadening their business model (e.g. moving into mobility services). In
particular, the ICT component of FEVs is expected to be significant, up to 40% of the
vehicle value, but presently it is the supply base rather than European OEMs
themselves that has competence in this area. It may be that even closer collaboration
between OEMs and existing suppliers skilled in vehicle ICT content will be needed.
Whatever their strategy, supporting European OEMs in adapting to vehicles with high
ICT content reduces the risk of them losing market share to non-European
manufacturers. Our research indicates that other world regions are increasingly
adopting a strategy of supporting domestic industry, rather than allowing market forces
to determine winners from a global pool of competitors. In this context, targeted, smart
support is important in maintaining a strong value chain within Europe.
Policymakers face the difficult challenge of creating a framework that stimulates the
huge changes in the transport system needed to meet environmental goals, whilst
ensuring that European industry can keep up with the pace of change and adapt their
business models to remain competitive. Experts we interviewed stated that the scale of
transition is so great that it can only be made by involving the large companies as well
as small, agile companies.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 68
2 Encourage and support innovative SMEs in the field of ICT for FEVs
In order to secure growth in the EV-ICT sector, particularly in new value chain areas,
Europe should support SMEs operating in this area. Due to their size and flexibility,
SMEs are able to develop new business models and services rapidly, particularly in
markets where entry barriers are low and there is scope for innovation. This is
highlighted by a number of industry reports, most recently the CARS21 final report. In
this way, SMEs can help to drive change either by competing with, or collaborating
with, established players. SMEs have a high propensity to manufacture in Europe, as it
is easier and less resource intensive for them to establish quality assurance and
minimise supply chain risk.
SMEs face a number of barriers in Europe, which are reasonably well documented.
Challenges include access to affordable finance, access to R&D funding and the
resources to scale up their manufacturing activity. Experts we interviewed were clear
that SMEs struggle to access European R&D funding at present. The complexity of the
application process, partnering requirements and time to grant are all prohibitive.
However, some experts question whether European R&D projects are an appropriate
route to fund SMEs in any case, when Member State and even regional funding can be
much simpler, more tailored and easier to access.
There are a number of ways in which SME involvement in the automotive value chain
can be encouraged. Further research could be conducted to better understand the
specific problems SMEs face in the FEV value chain, and the best ways in which
support can be provided. It will also be necessary to understand the interactions
between SMEs and the large OEMs, to ensure that supporting one group does not
undermine support for the other. The objective should be to foster working
relationships between European SMEs and larger companies to promote a European
value chain.
In our interviews, experts cited a number of possible routes to supporting SMEs:
Simplified or fast-track EU funding for R&D, or smaller-scale projects with less
requirements for pan-European collaboration, would be easier for SMEs to
access. This was highlighted in the recent CARS21 final report.
Assisting SMEs with the means to bring promising products to commercial
manufacture, for example by assisting with access to finance or even by
providing common prototyping or “foundation manufacturing” facilities (the
example of the CMP (Circuits Multi-Projets) in France was given).
Co-ordination between national/regional programmes that support SMEs and
European programmes, so that SMEs can develop Europe-wide networks and
so that larger organisations can more easily locate SMEs to bring in to
European project consortia.
Assisting SMEs in protecting intellectual property through the European patent
system, which some experts believe is prohibitively expensive and complex for
SMEs (although work is underway to address this).
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 69
3
Create regional centres of excellence for key FEV technology areas,
combining research, development and commercialisation activities
Creating a region with a particular specialism and strength in a key area of technology
for FEVs will help to attract further investment and generate additional expertise.
Silicon Valley is a good example of the way in which ‘agglomeration’ benefits are
valued. In addition, the recent CARS21 final report highlighted that regional clusters
“demonstrate a higher resilience to economic crises, resist delocalisation of industries
and play a key role in anticipating technological change”. In other industry examples,
regional clusters also provide conditions for small, innovative companies to achieve
rapid growth.
The ingredients for good regional clusters are well defined: they should include large
and small companies, research centres and world-leading universities, and be
supported by strong public and private sector financing and favourable framework
conditions. Experts we interviewed generally supported the idea that concentrated
funding was more effective than dispersed funding, with one OEM expert going as far
as to say: “The worst thing is to spread money thinly and wide”.
Whilst the benefits of regional specialisation are generally acknowledged, it is also
clear that there are barriers to establishing regional centres of excellence in Europe. In
particular, the Member States which make up Europe have their own priorities and
compete internally for investment, finance, skills and growth. This makes it difficult to
choose a single area to target funding, as it will inevitably benefit one Member State at
the perceived expense of another. Particularly in the case of ICT for FEVs, it would
likely involve concentrating funding in the few areas that already show some strength
in this area (e.g. Germany, France, the UK).
Previous attempts to circumnavigate this issue have met with mixed results, experts
say. An example given in interviews was the EIT-ICT (European Institute of Innovation
and Technology) lab, which comprises six locations around Europe. One expert we
interviewed was not convinced this approach was working because of conflicting
national interests.
However, experts cited aviation as an example where Europe has successfully
developed regional specialisation. One possible approach could be to agree on
national specialisations and then encourage tailoring of national and regional level
funding to establish centres of excellence.
Despite the barriers that exist in Europe, the universal support for centres of
excellence in the literature and with the experts we interviewed is clear. Therefore, we
recommend that this option is investigated thoroughly with a view to identifying routes
to establishing regional clusters within Europe.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 70
4
Address skills shortages in electrical, electronic and mechatronic
engineering disciplines
Both the literature and expert interviews highlighted an increasing shortage of
engineers skilled in mechatronics. Similarly, the CARS21 final report specifies a need
for labour with ‘polyvalent qualifications’ such as me-chem-tronics. The integration of
electronic, chemical and mechanical functionality is becoming increasingly prevalent in
the automotive industry in general, and particularly in electric vehicles. Europe should
consider action to improve the supply of labour skilled in this discipline, to complement
world-leading quality of skilled labour elsewhere in the automotive industry. In addition,
the possibility for radical new vehicle architectures in FEVs means that training specific
to FEV design may be required in the longer term.
There is little specific information in the literature on steps that need to be taken to
address this need for a change in the skills in the automotive workforce. The FP7-
funded project ‘JobVehElec’ is intended to further research in this direction, but had not
produced results at this time this project was concluding its research.
Experts we interviewed identified several areas where action could be taken:
Industry should take part of the responsibility to make a career in automotive
engineering more attractive for young engineers.
There was a general consensus that the education system needed to produce
more engineers with polyvalent ‘mechatronic’ and ‘me-chem-tronic’
specialisation in addition to more traditional mechanical, electrical and materials
disciplines.
Some industry bodies stated the belief that the engineering profession does not have sufficient social status, in particular blue-collar skilled manufacturing engineers.
To continue Europe’s world-leading academic research into FEV-related
technologies, Europe should continue to attract the best academic and
research scientists from around the world.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 71
7.5.4 Stimulating innovation in Europe
1
Create a uniform single market for FEVs, components and services
across Europe by adopting common standards and harmonising
incentives
The development of European standards is progressing but is widely thought to be
slow compared to other world regions. One reason for this is the governance system of
the European Union, with no single entity having full executive power, compared with
single nation states in other regions. In addition, liberalised markets and multiple
Member States mean that standards need to be agreed between a large number of
stakeholders spanning the automotive, electricity and ICT industries.
However, as one of the largest FEV markets in the world, with one of the largest
forecast growth rates to 2030, the European market has significant power to impose
standards that suit its industry. These need to be formulated and adopted quickly to
prevent other standards from penetrating the market. There are likely to be a host of
new standards required in FEVs in the coming years as new technologies reach
commercialisation, for example in V2X communications, smart grid functionality, and
internal wired and wireless architecture. The adoption of technical standards can lower
barriers to entry for new players and reduce development times, presenting both
opportunities and risks to the European automotive industry.
Along with standards, legal and regulatory changes may be needed in some areas to
facilitate technological development. One of the most commonly cited examples is in
the domain of driver assistance and autonomous driving. Advanced panning is needed
between industry and government to ensure that new technologies ready for
commercialisation do not have unnecessary legal barriers (whilst protecting the
interests and safety of European citizens). The need for advanced planning in Europe
is particularly acute, as regulatory changes need to be implemented across Member
States.
In view of the critical nature of standards and regulation, and learning from the
experience with charging connector plug standards, experts we interviewed felt that
the process of agreeing standards and changing regulation should be reviewed and
improved where possible. In addition, whilst European roadmaps already look at
standards, a more detailed road mapping process to understand which standards are
needed at what time could be a useful exercise.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 72
2 Support later stages in the innovation cycle
Current funding focuses on supporting early stage R&D. While it is to be expected that
a significant proportion of advanced research work will not lead to technologies which
are suitable for mass production and marketing, industry has asked for more to be
done to ensure that there is better support for suitable innovations to be progressed
through the mainstream development process and thus to production. This has been
made clear through our expert interviews, the CARS21 report and is also reflected in
the stated aims of the Horizon 2020 framework programme. This could include product
development, production of test fleets, and demonstration activities. In addition, it has
been suggested that other EU instruments such as the EIB, CIP and Structural Funds,
and their Member State equivalents, could be used in a co-ordinated effort to stimulate
innovative activities.
Experts we interviewed universally supported the idea of supporting closer to market.
Specific ideas for implementation included:
Basing collaborative partnerships for R&D projects on a viable supply chain,
avoiding competitors gaining proprietary knowledge.
Providing fast-track funding where time to grant is much shorter, for high tech
areas where research is time critical.
One expert highlighted that privately funded R&D projects would often have 6-
monthly or annual milestone review points where the project could be dropped
if results are not promising, and suggested this approach could be applied to
publicly funded projects.
Providing a process whereby projects that have been successful in one stage
of the R&D process can gain follow-on funding for the next stage of
development quickly and simply.
Using other, non-R&D funding instruments to support high investment costs in
manufacturing and production of newly developed technology (e.g. EIB lending,
CIP, Structural Funds, Member State support).
Using public procurement to provide an early market for technologies
approaching commercial readiness.
Our research into support regimes in other countries, particularly China and the USA,
found examples where close-to-market support was provided. Further research into
global examples could inform European actions.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 73
3
Co-ordinate and streamline public R&D funding at a European and
Member State level
Many major automotive companies are global in their scope, and most activities are at
least on a European level. Therefore, the most efficient co-ordination of R&D strategy
would also be on an EU level. In addition, strong co-ordination between European and
Member State efforts would benefit the industry. Interviews with experts, in addition to
recommendations in the CARS21 final report, indicate an industry view that presently
funding at EU and Member State levels can work at cross-purposes. A further
recommendation from the CARS21 final report is to concentrate funding, as they view
the more concentrated efforts of other world regions as a competitive benefit.
Some experts highlighted the important and differentiated role that Member State
funding can play; it can be more tailored to local needs, more flexible, and often has
shorter time to grant. This can suit different types of project with different partner
organisations, for example smaller companies.
In addition, some co-ordination already takes place, for example under the EGCI and
ERA-NET Transport (ENT) programmes. The information exchange that is facilitated is
considered beneficial, and some experts believed it should be strengthened. Co-
ordination between Member States could also take the form of national specialisations,
in line with another recommendation from this project.
4
Investigate the role of patenting in FEV technology, with a view to
incentivising patenting if necessary
Our analysis has indicated that Europe is significantly behind Japan and Japanese
companies in both applications and granted patents in the domain of ICT for the
electric vehicle. Some experts have said that this is not an issue, due to the ability to
trade patents or circumvent patented design features, and because patents have less
value in the fast-moving world of EV ICT. However, others feel this is a problem that
could build into a competitive hindrance in the future. Therefore, we feel that work is
needed to better understand the role of patenting in innovation and industrial
competitiveness in the automotive industry, and to assess whether action is needed to
incentivise patenting in Europe.
One particular area that has been highlighted in expert interviews is software patenting
in Europe. Several experts said that their organisations had found software patenting
in Europe more difficult than in the USA and Asia, which is an advantage for
companies operating there. This could also be investigated in future research.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 74
7.5.5 User acceptance
1
Ensure a continued strong development of a European FEV market as
a route to securing a European value chain
Our research indicates that one of the key factors that influence automotive
manufacturers in deciding where to locate product development and manufacturing
facilities is the future market potential within a region. This is due to a number of
factors: the cost, risks and uncertainties in shipping products long distances; currency
and import regime shifts; and the ability of the supply chain to tailor their products to
the market. The increasingly globalised nature of the automotive industry means that
OEMs nominally registered in one world region can have very significant operations in
another region, based on their view of the market outlook.
As a result, it is very important that European policy works towards stimulating a strong
market for FEVs in Europe, in order to secure a strong Europe-based value chain. This
is particularly important in the context of strong growth in private car sales in other
world regions due to economic growth and demographic shifts, meaning that there is a
strong pull to shift development to these regions.
Experts we interviewed highlighted that European governments have a significant role
to play in providing stable conditions for investment in the FEV industry. Commitments
in policy, incentives etc. of at least 5 years are needed to allow significant investment
decisions in new manufacturing capacity to be made.
2
Develop business models and technologies that reduce the upfront
cost and/or total cost of ownership for FEVs
One of the key barriers to uptake of FEVs in Europe is the significant price premium of
an FEV compared with an equivalent conventional vehicle. Reducing this price
premium will have a significant impact on private users in particular, who are extremely
sensitive to capital cost. Business vehicle owners are more likely to take a holistic cost
of ownership approach, therefore efforts to reduce the total costs of owning and
operating an FEV will also stimulate uptake in this market.
Currently some European Member States are using purchase subsidies to reduce the
vehicle capital cost in an attempt to stimulate market uptake. However, these are not
sustainable in the long term, and do not help European businesses to develop new
technologies or business models that reduce the cost to consumer once the subsidy is
removed. Some new business models are emerging; in particular rental schemes that
attempt to overcome the capital cost premium. In addition, new value areas such as
vehicle-to-grid can generate a revenue stream for the vehicle owner that can offset the
cost of ownership. These types of development will be very important as long as FEVs
continue to be more expensive than their conventional counterparts. European R&D
programmes could provide funding for large-scale demonstrations that trial new
business models (e.g. mobility as a service) or the technology that enables them (e.g.
ICT for remote battery health monitoring).
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 75
3
Educate the mass vehicle owner market on the realities of FEV
ownership
Users who participate in trials of FEVs generally experience a shift in attitudes
compared with their preconceptions before trying the vehicles. In the period from 2020
to 2030, FEVs need to make the transition from being a niche technology taken up by
early adopters to a mass-market product. Therefore, work needs to be done before
2020 to educate mass-market consumers so that they become comfortable with the
concept of owning an FEV.
Field trial results generally show a shift in attitude triggered by actual first-hand
experience of using and FEV. One way to change public perception, therefore, is to
facilitate exposure to FEVs. This could be through incentivising rental companies and
car clubs to offer FEVs, using FEVs in driving lessons or tests, or public schemes like
the Parisian ‘Autolib’.
In addition, experts we interviewed suggested that there is a need to develop projects
and trial deployments of FEVs that demonstrate the benefits and potential of the
technology, in particular the advanced ICT elements. In addition, some experts
emphasised that the biggest undercurrent of negativity centred on power station
emissions, so demonstrations where FEVs are integrated with green
electricity/renewables generate positive examples for the public.
Finally, field trial interviewees stated that most trials to date involved early adopter
demographics: typically male, well educated, above average income and with a high
affinity for new technologies. Therefore, whilst OEMs have gathered data about early
adopter responses to their vehicles, they have not trialled with mass market
demographics to a significant extent. A dedicated study and/or larger trial involving a
wider demographic may provide useful data in this area.
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 76
Appendix 1: Expert interviews
A vital element of this study has been obtaining expert opinions from within the automotive
industry. The ICT and FEV sector is fast evolving and so it is vital to gather up-to-date
information. In addition some of the data necessary for the specific requirements of this
project may not have been available within the public domain. Stakeholder interviews have
also provided a means of validating and cross-checking the findings from the literature
review.
For this task, a number of interviews were undertaken with experts across the FEV industry.
A broad range of organisations, sections of the value chain and levels of engagement with
European R&D programmes were covered. Stakeholders were guaranteed anonymity in
order to obtain their full and honest opinions. While it is not possible to reveal names of the
individuals, we can provide some non-specific information on the experts. The following is a
non-exhaustive list of the interviewees:
Job title Organisation type
Former head of R&D OEM
Senior expert Aerospace industry
Director Automotive industry body
EV technology lead Utility company
Research co-ordinator Automotive services provider
Vice president, marketing Telematics service provider (SME)
Director of business development, EVs OEM
Head of digital technologies (IEEE member) European university
Project developer EV service provider
Research co-ordinator Automotive industry body
Head of future technologies OEM
Head of funding strategy OEM
Vice president, vehicle design OEM R&D centre
Head of electric mobility Engineering company
Project leader, EV research projects OEM
CEO Tier 1 supplier (SME)
Chief marketing manager OEM
Research co-ordinator Automotive service provider
Impact of ICT R&D on the Large-scale Deployment of the Electric Vehicle
AEA 77
Job title Organisation type
Policy manager EV service provider
R&D project lead, embedded systems Tier 1 supplier
R&D project lead, system integration Engineering company
Interviews were conducted both face to face and over the phone (depending on locations),
with the typical interview lasting between one to two hours.
The interviews represent the personal opinions of the individual experts and do not
necessarily reflect company positions.
European Commission
The Impact of ICT R&D on the large-scale deployment of the electric vehicle
Luxembourg, Publications Office of the European Union
2012 – Pages: 77