EVs are the talk of the town. As sustainability and environment friendly initiatives are growing across the globe, so are EV sales. However, ‘old habits die hard’ and the automobile industry still sees itself dependent on the conventional fossil-fuel-powered vehicle ownership model. With urban congestion and air quality taking the front seat in city planning almost in every major city, shared and integrated mobility models are being increasingly tested and piloted if not already woven into the fabric of urban commuting.
Following this trend and growing demand of shared mobility models, this month we decided to investigate the innovation and relevance of EVs* in shared mobility.
You will learn about the following through this post;
- Global EV market so far, the supply and demand equation and new entrants in the EV race
- ACES and the future mobility business models with EVs
- How does EV technology impact the shared mobility industry?
- Challenges faced in widespread shared EV mobility models and some countermeasures
*To simplify the use of abbreviations for this report, by EVs we refer to only battery electric vehicles (otherwise commonly abbreviated as BEVs).
To read more articles about electric vehicles within the shared mobility market, click here.
Electric Vehicles and Shared Mobility
THE GLOBAL EV MARKET SITUATION
Worldwide, the growth in EV sales has been remarkable especially with the recently launched popular models such as Tesla Model 3, Hyundai Kona EV and the New Nissan Leaf.
EV sales have been picking up in North America for the last 4~5 years and have been doubled in growth since the launch of Tesla Model 3. While market share for EV (including Plug-In Hybrids) still is a tiny number, it’s the increasing awareness and acceptance of EVs that’s promising. EV sales volumes are currently far from making a remarkable difference on their own globally. Including the plug-in hybrid vehicle sales the market share for electrically powered vehicles ranges between 2.5% in Britain, 2.1% in France, 2% in Germany and 0.2% in Poland. The market share has not grown to a great extent despite being incentivized by government rebates in EV prices and investments in charging infrastructure.
EV sales figures are in fact incomplete without stating sales in Norway. Half of the country’s auto sales volume market share is from EV and plug-in hybrids and this being despite a major chunk of the country’s GDP attributed to the oil and gas production. Norway is able to achieve this remarkable feat – and we are sure will keep increasing the EV share – by heavily taxing the ownership and use of gasoline and diesel vehicles and letting the EVs and plug-in sales enjoy tax-cuts and rebates. EVs also enjoy perks such as HOV, bus lane, city center access and parking bonuses.
Since EV tech is still considered to be in its early stages, one of the downsides is the high cost in production. There’s definitely a supply-demand relationship, which could always be a matter of debate, but the bottom line is that the cost factor makes EVs inaccessible to the existing business models around transportation. Notably in one of the releases, Eric-Mark Huitema, Director General of the European Auto Manufacturers Association, known by its French acronym ACEA, mentioned “Mobility must remain affordable for all layers of society. That is why we are calling on governments to put in place more meaningful and sustainable incentive schemes to stimulate sales EU-wide.”
Latin America is also witnessing increased awareness and therefore promoting interests from global manufacturers to consider countries such as Chile, Uruguay, Columbia and Brazil among others for marketing EVs. Personal EV ownership might be lagging, but national governments are ramping up their efforts to get public transportation electrified. In the city of Santiago (Chile) alone, the government is on its way to deploy 200 electric buses as a part of its National Electro-mobility Strategy. Columbia and Brazil have implemented incentives to boost EV adoption, which follows the global best practice of bringing the required critical mass awareness in any market.
EV PRODUCTION and RELATED TECHNOLOGY
So the demand for EVs isn’t as high, but it is on the rise and with government restrictions in key markets such as China gradually coming into effect, many major car manufacturers have started putting resources behind developing EVs. This has given rise to a rat race to turn out the most advanced and efficient technology and capture the growing market demand early on. Vehicle manufacturer Nissan, having tasted success globally with the Nissan Leaf (and its latest generation), has revealed its EV SUV concept. Called the Ariya, Nissan hopes to tap both EV and the SUV market demands. Volkswagen recently announced its plan to reach a production volume of 1 million EVs by the end of 2022. This could mean that VW surpasses Tesla’s Gigafactory 3 (in China) production vision of 500,000 EVs annually. Tesla has surprised the world with its eccentric CYBERTRUCK design and features, which was one of the most awaited EV releases this year. Once again Tesla leads the way to challenge the dogma of the automotive industry and we are excited to see such innovations.
While once a startup, Tesla has arguably become the flag-bearer of EVs globally; many other startup ventures haven’t been so fortunate. The technological advancements, investments required and market demand have pushed companies such as Faraday Future (FF), Nio Motors very close to declaring bankruptcy due to funding crisis. A few companies have survived and seem closer to market such as Rivian, Byton and Xpeng. All EV manufacturers are ramping up their tech-expertise in providing auto-pilot and connectivity features as standard in their cars. Autonomous, connected, electric and shared (ACES) tech will be enabled in the cars of the future (already available in Tesla, revealed in Volvo, Rivian and Byton) thus making a diverse mobility solution available universally.
It goes without mentioning that innovative customer experience such as smartphone based user access, over the air (OTA) software updates, vehicle-to-grid energy flow and other tech-aspects have been in the forefront of EV development.
Renault has been investing in its EV tech for many years and has now announced it will launch a small electric SUV called K-ZE and position it towards shared mobility. Renault Zoe has been the prime model of choice for car sharing operators in the EV space. The automaker reaffirms the trend that younger customers are moving away from car ownership to flexible usage and a shared economy where it says K-ZE would find success.
The two-wheeler market isn’t untouched by EVs either. Renowned motorcycle producers such as Harley Davidson and Ducati, releasing an electric version and confirming EV plans respectively, roots the future of EVs even deeper. Established moped manufacturers such as Piaggio and the numerous newer companies such as Gen-Ze (US) and Ather (India) have invested and launched electric mopeds, which are fully equipped for deployment in the shared mobility business. The European electric two-wheeler (including bikes, kick scooters and mopeds) sharing market is estimated to reach over USD 550 million by 2025 with a rapid annual growth rate. The increased technological improvements in electric two-wheeler battery and the innovations around the shared mobility space coupled with growing demand from the new-age consumer generation are enablers for growth of this market. Not to mention the tsunami of electric bikes (ebikes) taking the world by storm. Be it in personal ownership or a shared business model, we are able to see innovations in the ebike space from startups (e.g. Cow-boy) to global auto makers (e.g. ARIV from General Motors) to sharing service operators (e.g. Bird).
We see that governments across the world are experimenting with a carrot and stick approach towards promoting EVs. Norway has set great benchmarks and many European countries and North America are making remarkable efforts. Countries such as China and India have made efforts too and not just in incentivizing EV sales but also providing incentives for EV manufacturing and innovative mobility models.
ACES – AUTONOMOUS, CONNECTED, ELECTRIC and SHARED
The future of mobility is expected to have four prominent characteristics. Denoted as ACES, vehicles of the future will be:
- Autonomous. Advanced robotics, artificial intelligence, radar/LIDAR technology are being put together to develop the most advanced self-driving use cases out there as we speak. Applications range from transporting people to delivering goods. Recent applications of the autonomous tech are expected to solve the ever-troubling balancing problem and relieve streets from being apparently littered by abandoned scooters in the micromobility (electric kick scooter sharing) space. Just a matter of time that this finds a wider range of application in car sharing and in the on-demand micro-transit model.
- Connected. Imperative that IoT and interconnectivity will create and drive newer business models in transportation and especially in shared mobility. Connectivity is the base for the autonomous tech.
- Electric. Reducing complexity involved in mechanical components will be a mandatory requirement if vehicles are to be loaded with new-age tech. Remote access, fine tuning vehicle control, managing power requirements, basically simplifying vehicle operations would require vehicles to be electric and move away from being powered by fossil fuels.
- Shared. With the future of consumerism focusing on experience and the needs and wants changing by the minute, shared economy would be at the forefront to allow flexibility in everything one does. Transportation will be one of the prime sectors affected with touted perks such as lower cost of ownership, or rather usage cost, providing required flexibility from intra-city commute to the last mile connectivity and majorly driven by city policies to improve air quality and reduce congestion. Shared mobility is soon about to become the new norm in transportation.
UPCOMING EV MOBILITY MODELS
Improvements in EV battery tech are considered as one of the most critical areas towards mass adoption globally. Heavy weights such as Toyota and Volkswagen have already announced that they are working on the new solid-state battery tech which is expected to provide cheaper, faster and longer-lasting EV batteries. As per news from Toyota, the company is working on autonomous, on-demand and shared mobility based on EV platforms which reinstates the future of EV shared mobility.
In North America, the average commuting distance that a vehicle driver covers in a day is nearly 50km. While urban residents would fall well under that average, the go-to preferred mode of transport after a car share or ride-share would be transit-on-demand services that we see being piloted and implemented in cities across the world. Shorter commutes could see quite innovative models altogether. Case in point, Zbee by Clean Motion. Zbee is an urban electric three-wheeled pod capable of transporting 3 persons (1 driver + 2 passengers) over short distances. The company positions the EV for shared mobility with investing in connectivity and a proprietary fleet operator platform called ZbeeConnect. Such options would be expected to fill the gap between micromobility and car sharing and/or transit.
While covering micromobility and talking about filling the gaps in mobility, it is worthwhile to take note of the electric mopeds and ebikes volume growth as well. As Bird acquired Scoot, they have just released the electric bike/moped to complement their services in San Francisco. Scoot’s services have been using mopeds from GenZe so far. Moped sharing service Revel operating in the city of New York is a practical use case for 100% electric-mopeds used for urban commuting. It has since then expanded to other cities and seen increasing ridership. Choosing EVs for shared mobility does provide the leverage to offer zero-emission city-center commute which is becoming increasingly critical in cities around the world.
The regulations put in place by cities to curb congestion through creating Low Emission Zones (e.g. London city center) and imposing congestion pricing (e.g. ride-hailing in Vancouver) have given rise to new mobility solutions. Through shared mobility, both of these mandates could be fulfilled. To take this a little further, instead of providing rebates or incentives for 100,000 individual owners to buy EVs, the public funds could be better leveraged by providing rebates to shared EV operators servicing a larger base of city-center commuters, purely based on higher utilization of the same 100,000 EVs in operation. In other words, EVs and shared mobility together could solve many of our current transportation problems.
WHAT DO ELECTRIC VEHICLES and SHARED MOBILITY MUTUALLY BENEFIT FROM?
While shared mobility pivots around evolving tech, EVs are increasingly depending on tech features themselves to improve vehicle controls and efficiencies. For improving urban air quality, EVs are the way to go. Some key factors to the success of EVs in shared mobility include:
- Charging infrastructure. Although range anxiety is a thing of the past for modern EVs, electric scooters, cars, buses, bikes all are in need of recharging. This demands public charging infrastructure investments and major grid upgrades by governments. However, these could be offset by curb-side charging stations, installing chargers in public parking lots towards a shared mobility service. This allows better planning from the city’s perspective and solves the current barrier of unavailability of charging stations in a condo or in apartments. A network of public charging stations could even be shared among multiple shared mobility operators (similar or different modes) thus allowing optimized charging rates, time and utilization.
- Advancements in mobility. Within a car/bike sharing, the user gets access to an EV without even having to bear the currently high purchase costs. Moreover, with the advancements in Integrated Mobility Projects in many cities around the world users may benefit from hopping on & off from public transit to bike sharing to scooter sharing or car sharing without having to own a vehicle for each of their needs.
- Modular vehicle architecture. EVs are simpler to build. EVs could potentially be far more economical to build too given the interchangeability of the vehicle architecture. Higher demand generates high volumes and economies of scale in EV and battery production. With the current costs though, it is difficult to generate those volumes and hence production costs remain higher. EVs have just about 10% of the components required in a typical internal combustion engine (ICE) vehicle and thereby could have modular platform based models for different usage. Case in point, Rivian’s skateboard platform is expected to be used by Ford to build their EV models. Shared mobility demands a fleet for critical mass and optimum utilization. This would create higher sustainable and standardized trim demands which would be economical to produce, cheaper to purchase and less expensive to share.
- V2G (vehicle to grid) technology. French car manufacturer Renault has already experimented with innovative mobility models such as battery leasing and in providing a second life to EV batteries. While other EV manufacturers are exploring the battery repurposing space, vehicle-to-grid is an interesting concept and found too promising to neglect. EVs are being researched upon to act as mobile energy storage units. When plugged into the city’s electricity grid, the surplus power from the EV batteries could be drawn in to the grid, ideally of course. This method faces practical difficulties but hasn’t been proven impossible. In the shared mobility model, electric cars with advanced battery capacity tech, parked all over the city plugged into public charging stations could help restore energy to the grid to run homes. In fact, energy from one set of EVs could be used to balance the minimum required SoC (state of charge) in another within the same shared fleet with smart systems, thus driving demand charging costs down.
- Vehicle maintenance costs. In other words, fleet management costs. Did you know that the average distance that an American drives per day is less than 50 kilometers? Needless to mention, this is well within the single-charge range for EVs produced even a few years earlier. This annual mileage coupled with savings on fuel and the typical drive-train maintenance costs gives EVs a huge operational/TCO (total cost of ownership) advantage. Combine this with refueling or rather charging from plugging-in (which is an ideal usage of downtime or ‘vehicle parked’ time) and relatively cheaper cost of electricity, and an EV based shared vehicle fleet improves service availability (uptime).In a typical ICE car sharing, if a vehicle is parked with lower than ideal fuel level, it dictates the customer or an operator to refuel by driving to a fuel station (a detour of course) and creates complex rules about imposing a surcharge to the previous customer (may be crediting the current one). EV sharing avoids such operational complexities.
Electrification of cars isn’t just replacing ICE cars with electric ones. It requires changes in our mobility system. Shared mobility, as we know it, will form a considerable part of urban transportation if not the biggest. By integrating multi-modal seamless commute, cities would optimize travel time, mitigate congestion and with EVs, elevate air quality levels thereby improving urban living standards. Deploying EVs (cars, vans, buses, kick-scooters, mopeds, bikes) on a shared mobility platform is bound to offer an improved convenience and raise acceptance levels among users thus boosting utilization and profitability over the long run.
Cities across the world are increasingly imposing Low Emission Zones (LEZs) and Ultra Low Emission Zones (ULEZs) to improve urban air quality. Moving towards creating denser cities to house an estimated 70% of the world’s population by 2050, resolving urban congestion and reducing air pollution has become priority. EV sharing will prove to be a solution addressing both problems. Shared mobility will also bring about innovation in micro-transit, cargo delivery and other purpose built vehicles to be used to move people and goods in and out of these zones. (Image alongside shows cities which have implemented these zones)
EV SHARING CHALLENGES AND COUNTERMEASURES
In countries that would ban ICE vehicle sales altogether in the near future, changes in shared mobility fleet is a given. What challenges do EVs pose towards large-scale adoption?
As per the analysts at the Rocky Mountain Institute (RMI), global investments committed so far towards improving EV and battery tech is estimated to be about USD 150 billion through 2023. While such investments are driven by venture capitalists, governments today are required to pool in for subsidizing costs and accelerating EV adoption at the driver level. Such massive investments will drive Li-ion and other battery related technology costs down (from the current estimated USD 187/kWh to USD 87/kWh by 2025) and help make EVs economically viable against today’s mobility habits. While this will reduce urban air quality, only a cleaner energy grid i.e. electricity produced through renewable sources will help us mitigate the climate crisis (else this will just be offset by emissions in vehicle and electricity production). The current grids are quite ‘dirty’. Across countries such as the US and China, replacing current volumes of vehicles with EVs would have little, if not adverse, effects on today’s climate emergency. The challenge, hence, is sustainable electricity at source and a wiser use of rare materials for EV battery components.
In shared mobility, profitability is highly dependent on utilization that in turn depends on having a pre-determined critical mass within a city. For some of the major cities, this volume could be as high as 10,000-20,000 vehicles. This poses major problems in making public charging infrastructure available that needs to be developed at the pace of growth of the service. This opens up new challenges in curb-side space planning, availability of on-demand charging, and since the city provides these services there ought to be data sharing. One of the more popular solutions to avoid occupying extra space for charging is inductive/ wireless charging. This has complications of its own such as a very low tolerance in misaligning the battery with the charging are and high transmission losses to name a few. Operations in remote areas, smaller communities will need higher investments and might need subsidies in keeping vehicle access pricing affordable.
Additionally, current battery capacities pose a challenge to continuous demand of heating and cooling of EVs. In a shared fleet model, variations in driving behavior and inefficient usage of such energy demanding accessories will affect the SoC (State of Charge) and thus available range which puts EV sharing highly dependent on individual user patters. Li-ion batteries do tend to heat up a lot. By nature, these dissipate heat during charging and discharging. With massive battery sizes so as to bump up the available range and required power, this might pose higher problems in back-to-back usage business such as sharing. While EVs in a sharing platform will benefit from charging and parking being often done together, the business model might not allow them to charge within their ideal limits (typically 20-80% of SoC) by default. The need for such smart charging requirements will be required for reaping the most benefit out of the EV sharing business model vis-à-vis an ICE car sharing one.
Innovative tech companies are working tirelessly towards solving such problems. One of the solutions being providing a community based EV charging access. This could also be termed as charging-as-a-service. While sharing models typically in the kick-scooters and electric mopeds space have been incentivizing freelancers to recharge the units, bigger vehicles are likely to face issues. Solutions are being developed to manage the charging station network, their energy demands and utilization.
Energy demands are forecasted to surpass today’s levels by more than 20% in the next 20 years. Overall, the energy demand is being worked out to be reduced and the cycle from well-to-wheels (i.e. extracting fuels from the wells to burning them to finally propel the wheels) is being mandated to be made cleaner. Shared economy is the way to go and we have already started with mobility. EVs are good for the environment, but having as many EVs for individual use isn’t going to help mitigate climate change. Owning individual EVs would still create CO2 emissions in manufacturing, cause urban congestion and create tremendous demand on our energy grids. We need to switch to EVs and utilize them sustainably…by sharing!
As EVs become inevitable, EV sharing will prove to emerge as an optimal solution. Sustainable transportation through EV (multi-modal) sharing will not just help curb air pollution, but also reduce congestion. Owning a personal vehicle will be a thing of the past in the next 5 years as experts say.
In her book The Death and Life of Great American Cities (1961), writer Jane Jacobs forecasted 1 of 2 possible outcomes for the future of cities:
“erosion of cities by automobiles, or attrition of automobiles by cities.”
Denser cities will demand space to be freed from vehicle usage. Shared autonomous mobility is forecasted to be the platform of the future. We at movmi believe that including EVs in shared mobility will provide users access to a more sustainable mix of transportation options complementing public transit.
Article written by movmi’s Venkatesh Gopal.
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