It has been another momentous year for electric vehicle markets and technologies, with major policy developments, sales growth, and landmark models set to enter the market.
Electric Vehicle Markets: Another Momentous Year
China has thrown down the gauntlet once again in the automotive sector, with record EV sales approaching 5 million a year. The dual-credit system - two types of credit that must be accumulated to avoid penalties - is a primary driver. Although impressive, the results are not perfect. Much of this has been achieved with sales of small and micro cars, an artificial result that reduces pressure for supply chains but is ultimately not the consumer preference. A shift towards affordable versions of larger vehicles will be needed as policy drivers fully phase out in the coming years - a more difficult task.
Global battery electric and plug-in hybrid car sales (millions). Source: IDTechEx - "Electric Cars 2023-2043"
China's success is leading to cross-pollination with other parts of the world, which could be key for mainstream EV adoption. Indeed, BYD and NIO have announced plans to sell EV models in Europe soon. The biggest hurdle to this may be political. The EU has a history of banning low-cost (or undercutting) EV imports from China, for example, a tariff of up to 83% was applied to e-bikes at the start of the craze a few years ago.
Within Europe, in June 2022, the EU confirmed a landmark internal combustion engine (ICE) ban for 2035, later saying that e-fuels will be banned for cars and light commercial vehicles (vans). The ruling further cements battery-electric vehicles as the lynchpin of future road transport markets. The ban represents approximately 9-10 million electric car sales annually by 2035 using current vehicle sales data. Given EU countries sold around 1.8 million electric cars in 2021, the targets, which are over a decade away, look achievable.
On the other side of the pond, the US market gained momentum with the modernization of its federal tax credit for EVs, which is part of the broader Inflation Reduction Act. The incentive is designed to build a more localized supply chain. This is good for the long term, but it may mean it will be several years before the policy has an impact on market growth. The emerging passenger truck market is the key US trend to watch for in 2023. Ford's electric F150 was launched with overwhelming success, GM's similarly priced Silverado is poised to enter the market in 2023, and GM's luxury Hummer EV is sold out for two years. While Tesla currently has around 50% of the US EV car market, its share has declined slightly in recent years. As Tesla prioritizes battery supply for the Model 3 and Model Y, IDTechEx expects incumbents' passenger truck models to become significant drivers for US sales.
Taking a step back, it is easy to dismiss the hurdles the supply chain faces when looking at exponential sales data. While IDTechEx's report expects that the capacity of current and future giga factories will be enough to support 36 million battery-electric cars per year by 2030, looking further upstream, particularly at lithium, there is uncertainty. What is becoming clear is the downsizing of battery capacities per vehicle while maintaining vehicle ranges will be key.
Electric Motors & Power Electronics: The New EV Battery
Improving drive cycle efficiency means less of the precious energy stored in the battery is wasted when accelerating the vehicle, leading to improved range from the same battery capacity (or the same range with reduced battery capacity). Upcoming electric motors and power electronics technologies are key avenues for this.
The emerging trend for 800V platforms and above is in full swing, with GM, Hyundai, and VW undergoing a transition alongside start-ups such as Lucid Motors. 800V platforms improve efficiency by reducing joule losses and allowing high voltage cabling to be downsized, saving weight. New technologies and materials are enabling the transition, namely silicon carbide MOSFETs using silver-sintered, die-attach materials and new cooling methods. To learn more, see the IDTechEx report "Power Electronics for Electric Vehicles 2022-2032".
There are several key performance metrics for electric motors, but again, a critical area is efficiency. Due to the many different considerations in motor design, the EV market has adopted several different solutions, including permanent magnets, induction, and wound-rotor motors. Key emerging motor technologies are axial flux and in-wheel motors. Axial flux motors use more magnetic material, making them efficient and more power-dense, improving drive-cycle efficiencies via weight reduction. Similarly, while in-wheel motors require more motors per vehicle (one for each wheel), this can allow for greater optimization. This again leads to improved drive cycle efficiency. Markets today are small, but IDTechEx expects increases in demand over the next ten years, with first applications in high-performance vehicles, shuttle buses, and certain hybrid applications. To learn more, visit IDTechEx's report, "Electric Motors for Electric Vehicles 2022-2032".
Charging Infrastructure: Innovations to Keep Pace with EV Markets
Like EV markets, EV charging infrastructure has seen tremendous development in 2022. Public AC and DC fast charging installations are the lifeblood of EV markets, and installations increased in 2022 to support the growing popularity of EVs. As the largest EV sector, China leads the race with over 1.5 million public charging points. However, perhaps the most significant charging news of 2022 is the EU considering a landmark proposal to set new mandatory installation targets - for cars, there must be at least one electric charging pool every 60km along main EU roads by 2026. The move will help support the 9 million electric cars IDTechEx expects to be sold annually in Europe by 2030.
Innovative alternatives are also gaining momentum in certain subsectors. Battery swapping is an emerging alternative to public fast charging, wherein depleted batteries are replaced entirely in under five minutes. The IDTechEx report on battery swapping includes forecasts which show the growth to over 55,000 swap stations globally in ten years, with a key use case in the micro-mobility segment. The quickest charge is the one you never have to do - this is the premise behind the technology that is seeing significant uptake in China and wider APAC nations. However, the capital costs associated with setting up a battery swapping station are still higher than DC fast chargers. Whether this technology will be adopted elsewhere remains to be seen as market leaders such as NIO expand their footprint across Europe and the US.
While battery swapping is the answer to quick charge times, wireless charging is the answer to the most seamless charging experience. Buses will charge at bus stops, taxis in taxi ranks, and autonomous cars in public garages, all without ever having to be plugged in. By eliminating the use of cables and connectors, the whole charging infrastructure is simplified. A transmitting coil creates a fluctuating magnetic field that generates a current as it is intercepted by a receiving coil placed underneath a vehicle. IDTechEx's latest charging report, "Wireless Charging Market for Electric Vehicles 2023-2033: Technology, Players and Forecasts", covers the technology, players, and deployments in this emerging market. 2023 will be a major year for developments within the wireless charging market as pilot projects end, and commercial rollout begins.
Heavy-Duty Electrification: Constructive Developments
It is not only the on-road transport sector that is looking for solutions to reduce greenhouse gas emissions. Indeed, operators of non-road mobile machinery in the construction, mining, and agricultural sectors must also decarbonize if companies and countries are to meet their net zero emissions goals. IDTechEx's report, "Electric Vehicles in Construction 2022-2042", provides analysis of the ongoing electrification development work of key players supplying the construction machine market, including technical and economic considerations for electric powertrain deployment and forecasts for the growth of zero-emission technologies in this sector.
Key to the deployment of electric construction machines is understanding the daily duty-cycle energy demand requirement. To see widespread uptake, battery electric machines must be able to demonstrate to operators that they can deliver a full day of work. Short operational runtime and excessive downtime needed for battery recharging can greatly hinder the usefulness of electric machines versus existing diesel models. Manufacturers must deliver the performance their customers expect while ensuring that the total cost of ownership (TCO) makes the adoption of these cleaner machines viable.
Early development work has been focused on compact construction machines. This is because their small size and relatively light-duty cycle requirements mean a typical eight-hour workday can be delivered with a practical size of Li-ion battery (<50kWh). Volvo Construction Equipment have already committed to move its entire range of compact wheel loaders and compact excavators to electric powertrains. However, zero-emission solutions are also required for larger construction machines. This makes the greatest contribution to the sector's total CO2 emission. The arduous duty cycles of these heavy-duty machines mean those over 20 tonnes need more than 300kWh of energy to deliver a full eight-hour workday. However, with Li-ion battery pack prices in the order of US$600+ per kWh, the cost of these large batteries currently hinders commercial TCO viability.
Electrification was a clear trend at October's BAUMA trade fair in Munich, with OEMs including Caterpillar, Bobcat, Mecalac, Wacker Neuson, and Kubota all unveiling new electric machines. IDTechEx expect to see strong continued progress in construction machine electrification in 2023. If on-site pilot tests by construction firms can demonstrate the necessary performance, demand for electric machines will only grow. This is due to other co-benefits of the technology, such as quieter operation, lower vibration, and improved on-site air quality becoming obvious to operators.
The straight- and dotted-line intersection marks the breakeven point. The intersection needs to be to the left of the box for a TCO benefit. Source: IDTechEx