Study results: EV growth

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Empirical studies from BCG and Avrios

 

An interesting study has recently been released by German CAM - Centre of Automotive Management about market trends in Electromobility in International Core Markets. (Source).

 

The study shows: The development of e-mobility (BEV, PHEV) declined in 2019 in the two largest sales markets, China and the USA. By contrast, in Europe electromobility-share is growing fast, with Germany achieving the largest increase (+ 61%). 

 

Nevertheless, in Europe the absolute share is still on a very low level: only 2-3% of all new cars are electric. (Source).

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Those results are in line with other studies, such as a study from the Swiss Fleet Management Software company Avrios, which analyses the fleets of their customers, representing a total fleet of 90.000 vehicles in Europe. (Source1, Source2). 

 

The Avrios study also finds an impressive growth rate of 170% in the share of Electric Vehicles from 2016 to 2018. But also shows that only 2-3 % of the total number of vehicles are Electric vehicles. 80% of corporate fleets have no electric vehicles at all.

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Drivers of EV  growth

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Looking at Europe, the reasons for the low absolute levels of Electromobility and the strong growth seem to be clear from those two studies. Main reasons for not using more EV are:

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• Missing loading infrastructure (on the road, at the company’s facilities and at the driver’s home)

• Insufficient range of EV

• Insufficient functionality of EV (e.g. including “prestigue” of an EV as a benefit car)

• Uncertainty about the direct costs of EV (maintenance, residual value,…)

• Uncertainty about the effects of governmental regulation (e.g. tax benefits for EV, restrictions regarding diesel,…)

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Main reasons for the growth are basically that

• technological development (infrastructure, range, functionality) reduces the above mentioned barriers to use EV and

• more data and knowledge about EV become available and reduces uncertainty and risk

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Conclusion for companies: EV fleet strategy 

 

Leaving the level of macro-economic discussion …
(Btw: on that level, EV only make sense for a country, if the production of electricity and the EV itself is “greener” and more cost efficient than of alternative vehicles).

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... the key question for a company with a vehicle fleet is:

 

What concrete conclusions do you draw out of this general facts, figures and available knowledge about EV? How to change your Fleet Strategy with regards to e.g. vehicle selection, organisation of your fleet management and technology?

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It is the Use-case that decides about EV or not!

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Looking deeper – not at the number of vehicles in a country in total, but at corporate fleet level – the Avrios study finds that while 80% of companies have no EV at all, some companies use EV quite intensively.

 

The reason for this is simple: While clearly there are use-cases where an electric vehicle is not the best alternative, there are other use-cases where EV fit well and even have advantages over other alternatives.

 

The Avrios study identifies several clear use cases / company groups where EV are used quite intensively:

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- local service delivery companies (energy, technical services, food delivery)

- short distance transport services 

- internal factory/plant transport (sites with many EV forklifts)

- fleets of "green enthusiast" companies (= many EV in companies with dedicated ecological or social-responsibility values)

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Conclusion / Interpretation:

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Interpreting the Avrios findings, you can conclude that electric vehicles already work well for use cases of short distance transportation and enough time to recharge. Also those "green enthusiast companies" demonstrate that if you really want to try out something new, it works economically even if uncertainty about costs of EV is still high.

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With the main barriers to electric vehicles continuously diminishing (due to better knowledge about EV in general and cost in specific, increasing range, etc.), you can also conclude that the number of use cases where EV make economic sense will increase.

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Final conclusion: There is not the ONE best drivetrain. There will always be use cases where other drivetrain alternatives (e.g. the efficient, long established diesel engine) will have advantages over EV. It depends on the use-case of corporate mobility. However EV have proven to be efficient in some use cases and the number of use cases is increasing..

 

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What is your EV strategy? Do you have use-cases for EV?

 

In order to find out, you should:
 

• Analyze the routes and distances that your drivers drive (sometimes the “perceived” distance is longer than the real distance!)

• Consider alternatives of poolcars / shared vehicles (complementary to vehicles that are dedicated to specific drivers)

• Compare costs of EV vs. alteratives (TCO: on top of funding/leasing also look at “fuel”, maintenance, insurance, residual values, taxation)

• Quantify and mitigate risks of external regulations 

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Marcus Hennecke

January 2020