Wherever you are in the automotive industry these days the topic of Electric Vehicles (EVs) and New Energy Vehicles (NEVs) seems unavoidable. Governments and citizens are facing surmounting pressure to offset the negative side effects of fossil fuels and urbanisation such as pollution and climate change. For many governments and car manufacturers alike, this has meant committing to new energy and ‘clean’ transport.
This week the EC team visited TechCrunch Shanghai 2017 and Electric Vehicles again were a topic of intense discussion. But electric vehicle sales are still an extremely small part of the automotive market, so why the fascination?
Plug-in vehicle sales may still be a big portion of most countries’ car markets, but sales are increasing rapidly. Global sales of plug-in vehicles in August 2017 were estimated to be around 649,000 units, a 46% growth compared to the same time last year. China itself is a world leader in terms of total units sold and in terms of YoY growth.
So what are the key obstacles blocking electric vehicles?
- The installation and transportation of ‘clean energy’: Although electric vehicles have long promoted the environmental benefits of driving without burning fossil fuel, in many cases the electricity they require to run is generated using traditional methods. for example, coal burning power stations in the US account for two billion metric tons of CO2 per year. Simply increasing the need for electricity without guaranteeing a clean source could have hazardous side effects and increase environmental damage. Infrastructural problems could also be caused by increased demand for electricity at night, when most vehicle owners choose to charge their cars.
Creating clean energy sources is an issue that needs to be tackled on a governmental level and China is undergoing massive changes in terms of renewable energy. Having pledged $360bn in investment for wind and solar power by 2020. This year alone they have made headlines for installing breakthrough ‘floating’ solar power stations, arguably the world’s largest solar power plant (generating 850 Megawatts of power) and most probably the world’s cutest solar power plant.
- Consumer preference and the inconvenience of charging: The issues surrounding battery life and charging times as well as concerns about the range of electric vehicles has long held consumers back from committing to electric vehicles. Current models generally require upwards of 10 hours to charge and even EVs from industry leaders such as Tesla require at least 15 minutes of charging time. Urbanisation provides another interesting challenge as many EV owners don’t have the luxury of a private drive or garage where they can charge their vehicles.
How can China’s ‘Mobile Services Industry’ solve consumer concerns over charging times and upgrade the EV consumer experience?
Apart from racing to upgrade charging times Chinese EV’s are hoping to rely on China’s flourishing mobile services industry to provide the answer to EV charging problems. Currently, apps in China allow quick access to services ranging from in-office manicures to at-home cleaning and cooking services. In 30-60 minutes it is possible to have services delivered to almost any specified location.
This means that consumers could have their car battery charged or replaced as well as experience other EV services while they attend a meeting or go for coffee with friends. Without having to worry about overnight charging, special parking spots or taking time out of their day to charge up. This accompanied by the Chinese government’s continued commitment to new energy infrastructure makes the outlook for growth within the EV market an attractive one.
One such brand looking to change the way we look at EVs is NIO, whose VP of User Development Izzy Zhu spoke at TechCrunch this week. For Zhu, the primary concern was the customer experience and how to offset the current shortcomings of EVs in this area. “The biggest obstacle for today’s consumers to electric vehicles is the problem of charging,” Zhu said at TechCrunch Shanghai. “Currently, it’s very inconvenient to charge, NIO will provide cloud computing and data to optimise and connect our charging substations, as well as deploying a service team that provides mobile charging vehicles and service for consumers in cities such as Beijing and Shanghai.”
Such mobile and bid data services could be expected to start rolling out as early as this year. “The definition of what makes a car is changing …and we are expecting huge fundamental changes in the next 5-10 years in the auto industry” Mr. Izzy Zhu.
If you’d like to learn more about China’s mobile services or EV market, or if you’d like to know how your company can adapt to increasing Chinese consumer expectations please don’t hesitate to contact us.