Battery Electric Vehicles: So Much Investment and Still So Many Questions
By Brian Daugherty, Chief Technology Officer, Motor & Equipment Manufacturers Association
As I began writing this blog, I was fascinated by the strange array of issues facing the automotive aftermarket industry and the world in general. It is a unique combination of geopolitical, regulatory, safety, consumer behavior and “good ole” technology-related issues. So, I decided to start writing down all my questions and will let you ponder the answers. I do not have answers to most of them – although I do have some opinions and guesses – but my thought is that these are the questions we should be asking.
- We will soon see if all the recent and increasingly optimistic battery electric vehicle (BEV) forecasts and projections are correct. Will internal combustion engine (ICE) vehicle volumes rapidly decline, or will the energy density and convenience of gasoline be harder to replace than is projected? The great thing about the world is that since everyone is “all in” – given the over $500 billion in global committed EV investment – we will see what happens quickly.
- Will U.S. consumers buy BEVs instead of cheaper, quicker-to-refuel ICE vehicles? If they do, will there be enough high-grade nickel and lithium along with cobalt and copper to supply the demand? Will we be able to ramp up enough mines and processing capability to keep up with the demand curve? If not, what happens? Will nations continue to try to corner the market on these raw materials? What happens to the cost of batteries?
- Many OEMs appear to believe that a $60K to $100K vehicle is “mass market” and that the market for that price range is quite large. Will mass market consumers pay for expensive BEVs as OEMs seem to think?
- Will OEMs even need to produce reliable and affordable entry level, high mpg vehicles or will the market consist of just expensive BEVs to balance out the fleet fuel economy for mid-size and large ICE SUVs and trucks? How will this impact lower income segments of the population?
- What will happen to these battery packs at the end of their fairly short useful lifespan? Will a new battery technology save the day with double the range, half the cost, half the weight and volume, and that contains no lithium, nickel, or cobalt?
- How will these vehicles depreciate? What will happen to older BEVs that need a replacement battery pack that costs more than the vehicle is worth (see the internet for several amusing examples)?
- Will replacement battery packs even be worth making for low volume vehicles? For that matter, will any replacement parts be worth making for low volume vehicles?
- We see coal power plants (high CO2 emitters) being brought out of mothballs in Europe even as nuclear power plants with zero CO2 emissions continue to be shut down in Germany. Meanwhile, France is planning to build more nuclear plants (right next to Germany). Does any of this make sense? Could the Germans sell their mothballed or soon to be mothballed nuclear plants to France and save everyone a lot of trouble along with significant capital investment? I’m only half kidding. Where is all the electricity going to come from if BEVs make up a significant portion of the car parc?
- What happens to the U.S. or Europe if there is another Carrington Event (an extreme solar flare resulting in a coronal mass ejection from the Sun), a cyberattack, or an Electromagnetic Pulse (EMP) that takes the grid down for three to nine months in a region? If all or a significant portion of our transportation becomes electricity dependent – and therefore grid dependent – how will we cope with no electricity? Especially if repair vehicles, heavy transport (to carry new transformers), and emergency vehicles are electric? This would seem to me to be a national defense/national disaster planning topic of extreme importance given the global push to BEVs, and yet no one seems to be discussing it. (P.S. If anyone wants to discuss this, I have a few suggestions.)
- How will repair shops work on BEVs with 400 to 900 volt electrical systems? How will DIYers? What is the liability if someone tries to fix their BEV without the correct training and tools? As an aside, the safety and repair procedures for BEVs are quite onerous – one OEM for example specifies a 16 foot keep out zone around the entire vehicle while it is in a repair bay. How many shops have that much space? If this becomes standard practice will shops need to charge three times the hourly rate due to the floorspace that is needed?
- And what will BEV vehicle systems look like when they are 20+ years old? We know how to inexpensively replace worn out fluid lines, but will high voltage copper cables be inexpensive and replaceable? And, if they cannot make it to 20 years then we will have a much larger cost per year amortization problem to discuss.
- Will the supply base continue to profitably produce ICE parts and vehicles as volumes decrease?
- Given the highly fossil fuel based electrical generation mix in most countries, what if advanced engine technology hybrids actually reduce total CO2 emissions more quickly than BEVs?
- And my question of the last four years: Will anyone actually make money selling BEVs? (See recent reports of price increases and evaporating gross margins as battery prices increase.)
Lots of questions and not as many answers to them as we would like to have. As my father always told me: “the world is a grand experiment,” so let’s hope that this works out well.
One thing that we do know is that electrification is coming, and the aftermarket will adapt as it has always done. We also know that with over 290 million vehicles in the U.S. car parc, it will take a long time for BEVs to reach a significant share. But you better start planning now.
I look forward to seeing you at AAPEX 2022 in November where many of these BEV questions will be discussed to ensure the industry is prepared for electrification.
Brian Daugherty is a frequent contributor to the AAPEX Blog. His previous blogs include Vehicle Electrification and the Aftermarket Impact, The Pandemic’s Impact on EVs and AVs and the New U.S. Fuel Economy Standards and New Automotive World: The Global Vehicle Powertrain Revolution.
August 16, 2022