There is no escaping the complexity of the transition to zero-carbon transport. Transport is a sector where the needs of the consumers, businesses and the environment collide, and the challenge of creating effective EV solutions means making sure they work for everyone. It’s not just about utilising greener technologies and reducing the environmental impact of our transport systems; we need to ensure solutions also create powerful revenue generation opportunities for businesses and better experiences for consumers.
There is a huge global ecosystem developing around EV and mobility. Bringing together established automotive and tech players, local governments, innovative start-ups, energy companies and many more, this ecosystem is forging new business models, ways of working together and discovering untapped revenue streams. It is also a hotbed of technological innovation.
From vehicles and infrastructure to energy generation and storage, here is a look at the trends and technologies that will shape the future of commercial vehicles, transport, and mobility over the next two decades.
In my opinion we are approaching a tipping point when it comes to EV adoption and the wider transformation of mobility. There is growing demand among businesses and consumers, a consensus among policymakers and increasingly sophisticated solutions at every part of the value chain. The need to reduce emissions, and do more with less, is triggering a wave of global innovation that is likely to impact nearly every aspect of our lives. In this blog, I will outline a few of the trends that the team at Hitachi are getting excited about, and that will drive EV innovation over the next decade.
The megatrends influencing the market
Before we get into the technical details, it is important to understand how the changes in the transportation sector fit into the broader context of global change. We are all being affected by a number of large-scale social and technological shifts that have an impact on the ways we live, work, and play. When it comes to EV, the market is being driven by a number of significant megatrends.
Addressing climate change
Through measures such as phasing out fossil fuels and promoting more sustainable sources of energy, as well as reducing waste and more firmly establishing circular economic practices, embedding sustainability is changing long-established systems and ways of thinking. If fleet owners transition fully to EV over the next decade, the result would be a reduction of 3 billion tonnes of CO₂ emissions. This is equivalent to the total annual emissions of India.
Low-cost computing, high-speed connectivity and machine learning are enabling the digitisation of nearly every part of the physical world. This doesn’t only mean smarter production processes, but it means smarter infrastructure too. As electric vehicles become part of a seamless digital experience, the data and insights they generate can be utilized to reduce wasted capacity, duplicate assets, and exploit surplus energy in commercial depots and charging infrastructures.
By 2030, the world’s population will have grown to around 8.5 billion (source: The UN) and most people will live in cities. Due to the growing demand for shared resources as well as demographic, technological and social trends including aging populations and an increase in automation, cities will also have to adapt. EV provides an effective way to upgrade travel infrastructure in a way that lowers emissions, helps businesses operate more effectively and improves public health.
Technology trends to watch
These megatrends form a backdrop for huge innovation throughout every part of the EV value chain. From the continued evolution of the vehicles themselves to batteries and charging, the entire ecosystem is moving fast. As a provider of end-to-end energy and mobility solutions for commercial fleet operators, we are witnessing exciting developments at every stage of the EV value chain. When combined they will help power the low-carbon economy and unlock new long-term growth for companies.
The adoption of EVs will likely step up a gear when they reach price parity with petrol and diesel cars in the UK in 2023. Across the world, the commercial sector is also seeing more adoption. China continues to lead the electric bus market with 78,000 new vehicles registered in 2020, up 9% on the previous year (source: International Energy Agency). While registrations were down in Europe, we expect the rate of adoption to begin rising again in the coming years. An important dynamic of the market will be whether Original Equipment Manufacturers (OEMs) can retain transitioning customers or convert new ones looking to purchase an EV. This will encourage many to develop innovative new solutions such as vehicle-to-everything (V2X) and autonomous functionality, potentially helping fleet operators to manage fleets more effectively.
There are a whole host of charging innovations emerging into the market. When it comes to designing their operational infrastructure, commercial fleet operators will soon have much greater flexibility thanks to wireless, mobile and superfast charging solutions. Perhaps the most important, however, is bi-directional charging. This facilitates the flow of energy in two directions, either from vehicle to grid (V2G) or vehicle to home (V2H). This solution is an important way of utilising spare capacity as it allows otherwise surplus energy stored in unused vehicles to be fed back into the system. As bi-directional products begin to become widely available over the next five years, they could become important ways for fleet operators to control costs and maximise efficiency.
The roll-out of public charging has been predominantly focused on light-duty vehicles. That needs to change if long-distance trucking and coach services are going to become feasible over the next decade. The electrification of heavy freight trucks (HFTs) is a challenge due to the heavy-duty cycles and long-range operations requiring both larger batteries and high-power charging. Megachargers of 1 megawatt or higher are a solution, but also create the need to ensure grids, storage and integration with power systems can accommodate the increased load. This requires more collaboration between electricity generators, distribution system operators and charging providers. A 900 kW charger was recently introduced in China, while Spanish utility company Iberdrola is aiming to roll out megacharger infrastructure across the country by 2025.
Batteries continue to improve and as they do, so do the potential capabilities of EVs. While some newer models of EVs have 800V lithium-ion batteries that allow ultra-rapid charging, there is still much that can be done to reduce the size and cost of individual batteries while improving performance and useful life. The race is on to successfully scale up mass production of solid-state which would massively reduce charging time and battery space requirements. With most of the major automotive OEMs investing heavily in developing this tech, we are likely only a few years away from seeing it introduced to the market.
Electric scooters are now a common sight across the UK and 270 cities around the world now have some form of micromobility hire scheme in place. In the US, data from McKinsey shows that average trip distances using these services have grown 26% during the pandemic. As operators continue to react to rising demand by introducing more powerful e-bikes and electric mopeds to facilitate longer journeys, we will continue to see the growth and maturity of this market over the coming years.
Currently the hydrogen market is a long way behind EV. While almost every automotive player is engaged with EV, there has not been a similar surge in hydrogen-related activity. In fact, Volkswagen, BMW and Tesla have all publicly stated that hydrogen fuel cells are not currently a viable alternative to EV. However, this does not mean that the technology has no value, and we see a lot of potential applications once the efficiency and cost are reduced. While the size and charging requirements of hydrogen fuel cells may make them unsuitable for cars and vans, the technology is likely to have applications for commercial fleets of HFTs and buses.
Time to start bringing it all together
The business case for EV is clear, but currently the strategic roadmap for implementation is still uncertain for many companies. Due to the dynamic and increasingly crowded nature of the market, the traditional method of selecting a wide range of suppliers not only requires numerous long tender requests, but also makes it harder to ensure comprehensive, coordinated end-to-end strategic oversight of the process.
Our goal is to reduce the number of partners for the entire fleet electrification process to one. We provide our customers with a single source for planning, implementing, managing and maximising the value of expertise, insight and technological capability to help them accelerate their electrification process to gain value faster.
Whatever stage you are at with your transition to an electric fleet, we are ready to help.
Head of Intelligent Fleet Decarbonisation Business, Hitachi Europe