UK can seize the electric vehicle challenge

16 August 2017 19:24 Source:ICIS Chemical Business

Electric-powered cars have come a long way in the decade and a half since the box-like G-Wiz car took to the streets.

Its UK-based seller GoinGreen was congratulated in 2006 by a group of British MPs, largely Liberal Democrat and Labour, in a small motion in Parliament, “on selling more than 500 cars in and around London” of as the first mass-produced, commercially available and emission-free electric car in Europe.

Fast-forward to 2017 and there were nearly 8,000 new registrations of pure electric vehicles for the year to date in the UK, according to the Society of Motor Manufacturers and Traders (SMMT), while it is Theresa May’s Conservative government that put forward legislation which comes close to mandating electric car use from 2040. On 25 July it announced a ban on all new petrol and diesel cars from that year onwards.

The change is significant and is partly the result of a growing scandal about air quality in the UK as well as the need to meet challenging climate change targets.

UK EV

SCALE OF THE CHALLENGE

The latest announcement is “multifaceted”, according Robert Evans, CEO of the low carbon vehicle event Cenex and chair of the UK Electric Vehicle Supply Equipment Association (UK EVSE). It signals the move away from traditional fuel engines, though is woolly on details.

“On the one hand, the announcement reinforces the stakeholder consensus that the journey to the phasing out of the internal combustion engine is now underway, with the future being the electrification of road transport,” he said.

“On the other hand, the announcement lacks clarity as to the short to medium term initiatives that are needed to tackle poor urban air quality and to accelerate the uptake of electric vehicles,” Evans added.

The scale of the challenge is enormous – the number of alternative fuel vehicles registered in the first quarter of 2017 was a tiny fraction of passenger vehicles registered, just 0.59%.

EU vehicle table

The UK has not been as ambitious as its neighbours, with Germany’s automobile powerhouse given only 13 years to get into gear for an electric rollout.

The example set by Volvo indicates the UK is not on such an outlandish timescale, suggested Professor Graham Parkhurst, Director of the Centre for Transport and Society at University of West England’s Department of Geography and Environmental Management.

“As the Swedish manufacturer Volvo has committed to produce only electric and hybrid vehicles from as soon as 2019 – the first major manufacturer to make such a commitment – it shows that at least part of the industry could achieve such a switch for new vehicles much more quickly,” said Parkhurst.

The question arises: How well equipped is the industry, and how ready is the technology, to introduce this change on the necessary scale?

European, American and Asian businesses are already positioning themselves for change. Germany’s BASF, has just tied up with Russian mining company Norilsk Nickel for supplies of nickel and cobalt for a cathode plant.

In January, US carmaker Tesla and Japan’s Panasonic began mass production of lithium-ion battery cells for Tesla’s energy storage products and its Model 3 electric car at the 1.9m square foot Gigafactory in the Nevada desert.

In the UK, there is potential for battery success, even to pull in lucrative foreign investment. But it needs a jump-start from governmental coffers, a firm hand on the wheel, and a clear route map, say analysts, officials and academics. EV technology is “quite well positioned to deliver the change to fully electric and hybrid vehicles”, according to Mark Ellis, who is Principal Engineer for a team working on battery systems research at the University of Warwick’s WMG department of the International Automotive Research Centre (IARC).

THE FARADAY CHALLENGE

He says the technology has been “strengthened” by the government’s new “Faraday Challenge”, a cash injection into this research area, with a four-year investment round earmarking £246m towards battery technology.

Around a fifth of this money, £45m, will go in a first phase towards forming a “virtual” Battery Institute. The idea was recommended by the UK government’s Chief Scientific Adviser, Professor Sir Mark Walport, in July.

“It is not at all obvious”, wrote Professor Walport in his letter to UK Business, Energy and Industrial Strategy (BEIS) Secretary Greg Clark MP, that the current structure of Europe’s car manufacturing footprint will meet the “new needs” of the technology transition to hybrid and pure electric powertrain.

After investigating battery technology, he warned there is both a “risk” to the UK automotive sector and “an opportunity if these changes can be anticipated”.

Most of Europe’s automotive sector is served by multinational OEMs which are facing a “new strategic context” – that is, the need for making and sourcing large and heavy battery components, which may be more than 50% of the vehicle value, wrote the government adviser.

“Transportation costs favour this being close to vehicle assembly,” which is where British research could help pull in longer-term investment, said Walport.

“Whilst the large battery ‘pack’ is a competitive differentiator between OEMs, its fundamental component (the cell or pouch) is not – it is a commodity product sourced in bulk from Tier 1 companies such as Panasonic, LG Chem, and Samsung,” he added.

Paraphrasing his letter, the science and “world class expertise” in battery science is there – it just needs to be efficiently translated into “beneficial economic outcomes”. A national research programme, which brought together industry with researchers, would boost the “stickiness” of investment.

Reward for this effort could be “attracting foreign direct investment from a major Tier 1 cell supplier”, such as LG Chem.

The government may have taken heed by announcing the Faraday Challenge cash, which Mark Ellis believes “will put the UK in a leading position to capitalise on the growing market opportunities”.

His team at WMG in University of Warwick has already invested £100m in batteries and electrification research, said Ellis, and is working with “a number of vehicle manufacturers” to improve the energy density, reduce the weight, drive down the cost and extend the lifetime of lithium-ion battery systems.

The engineer strikes a positive note on the current manufacturing perspective: “Electric and hybrid passenger vehicle sales hit 4.4% market share in the UK in May 2017, with 2.2m such vehicles on the road globally; so there exists a growing manufacturing capability in these technologies.”

Collectively, the industry’s activities mean the automotive industry is “well positioned to make this change before 2040”, said Ellis, but “ultimately the consumer will decide the rate of adoption based on the functionality, ease of use and value offered by the new electric and hybrid vehicles that vehicle manufacturers bring to market in the coming years.”

CASH INJECTION CONCERNS

It is the need for cash, beyond the Faraday Challenge, and the question of how to replace road tax which has concerned some in fuel industry.

As Brian Madderson, Chairman of the Petrol Retailers Association has said: “We are cautious that the ban on sales of new petrol and diesel cars from 2040 will require massive financial commitment from government, manufacturers and consumers, without crippling the UK’s economy.”

The car manufacturing trade body, the ACEA, has said the European car industry is keen on more “fiscal incentives for fuel efficiency”, such as tax reductions and exemptions in Germany and Austria. It has said tax measures are an important tool in shaping consumer demand towards fuel-efficient cars and help create a market for breakthrough technologies, notably during the introduction phase. The government has already committed more than £1bn to 2020 for ultra low emission vehicles in the UK.

As then-Business and Energy Minister Michael Fallon said in 2013, the vision is for almost every car and van in the UK in 2050 to be an ultra low emission vehicle (ULEV), “with the UK at the forefront of their design, development and manufacture, making us one of the most attractive locations for ULEV-related inward investment in the world.”

The UK is not always quick off the mark though. “Moving from 1% of electric vehicles on the UK’s streets currently to 100% will inevitably increase the pressure on the energy network,” said Rob Doepel, energy partner at major consultancy EY.

“2040 may seem a long way off but the UK has a long history of investment in energy infrastructure drifting to the right of any proposed timescales. To avoid that scenario, the focus needs to be on curtailing the time that it usually takes to agree policy in order to attract the required capital investment by 2040.”

Doepel adds: “While modelling has been done to understand the impact of electric vehicles on network performance, there are still few examples at scale available to learn from. Government will need to continue to provide incentives for large scale trials to allow for real life learning.”

There are many moving parts in the electric car transition, and there is a prize for the UK and European manufacturing industry. Experts seem clear it will require an aligning of vision and work from academic, commercial and government interests if that prize is to be won, and the 2040 target hit.

By Vicky Ellis