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Electric Vehicles Research
Posted on July 5, 2013 by  & 

The light industrial & commercial EV business will exceed $20b by 2023

A significant proportion of electric cars and car-like "MicroEVs" including e-trikes and e-rickshaws will take the form of taxis as detailed in the new IDTechEx report, Industrial and Commercial Electric Vehicles 2013-2023. Indeed, in 2014, IDTechEx projects that 119,000 electric taxis will be sold giving a $1.8 billion global market. Most of the commercial electric vehicles, including the taxis, are and will be pure electric. That will even be true of large commercial vehicles, notably e-buses, set to exceed a $20 billion market as early as 2018 and dominated by demand in China on IDTechEx analysis. Already a market of over $8 billion, the light industrial and commercial electric vehicle business will surpass $20 billion by 2023.
Why Pure Electric Commercial Vehicles Succeed: Cars Do Not
In this article, we seek to explain the success of pure electric light commercial vehicles, including taxis, and why it contrasts with failure to sell more that small quantities of pure electric cars.
Pure electric cars are outsold about 4:1 by pure electric light commercial vehicles, including taxis and vans, in the developed world and by over 50:1 in emerging countries. The reasons include the fact that organisations usually operate their vehicles in defined small areas and even on fixed routes, so they can easily manage the limited range of affordable pure electric drivetrains. They prioritise cost over life, a green image, health improvements and even substituting imported oil over upfront cost, all of which matches the strengths of pure electrics.
By contrast, private cars are bought on up-front cost and most people want them to be more versatile, taking them long distances on vacation and in emergencies. Unlike commercial organisations, private individuals can rarely afford to buy two vehicles - one for long range and one pure electric for short range. Most people have nowhere to park two vehicles anyway. However, there will be a tipping point and IDTechEx expect it will be within the next decade when range of pure electric private cars becomes acceptable to most potential purchasers if combined with a price nearer to that of conventional vehicles and some Apple-like product design and positioning.
Huge order in the Philippines
The Philippines is introducing an initial 100,000 pure electric tricycle taxis starting this year to begin to replace its gasoline-fuelled models. The Asian Development Bank is providing $300 million to this pollution control project; the Philippines government has committed an additional $99 million.
Existing conventional tricycle taxis are motorcycles fitted with passenger sidecars. There are about 3.5 million to replace in the entire country. The conventional tricycles use nearly $5 billion of imported fuel every year and produce about ten million tonnes of carbon dioxide. They are also the single biggest source of particulate pollution in urban areas. The World Bank estimates that the total economic burden of air pollution to the Philippines economy is more than $150 million each year.
"Every 20,000 e-trikes that are introduced to Manila's streets will save the Philippines 100,000 litres of foreign fuel imports each day, worth $35 million annually," says the ADB's principal energy specialist, Sohail Hasnie. A test run in 2012 showed that tricycle operators more than doubled their incomes when using e-trikes.
"E-trikes are a cleaner, greener transport solution for the Philippines and provide a better quality of life for tricycle drivers," says Neeraj Jain, the ADB's country director for the Philippines. "This project can help transform transportation in the Philippines and positions the country as a leader in electric vehicle development in Asia."
It will also create up to 10,000 jobs during the five-year project implementation period, says Loreta Ayson, the Philippines' undersecretary for energy. The e-trike supply chain will involve activities focusing on parts, battery supply and charging stations, including five off-grid solar charging stations.
Coincident with this, Japanese startup Terra Motors has officially shown its three-wheeled electric tricycle prototype in Tokyo in 2013. It is designed to be affordable for emerging markets in large quantities.
Fig. 1 The Terra Motors e-trike
Source Terra Motors
The Philippines has placed an order for the vehicles which are powered by a lithium-ion battery and can carry six people including the driver. 6 hours of charge allows 50km of driving. The three-wheeled electric tricycles will cost around $6,300 and Terra Motors hopes to expand its business to the broader Asian market. Terra's investors include Kenji Yamamoto, a former Apple Japan CEO, Google Japan, SONY and Compaq Japan. According to Tetsuya Ohashi from Terra Motors Corporation, EVs tend to be thought as a means for mobility in developed countries, but this is an exception.
One quarter of commercial vehicles in Germany can be electric now?
"When compared with private passenger cars, e-mobility is already very attractive for commercial vehicles," said Professor Martin Wietschel of the Fraunhofer Institute for Systems and Innovation Research (IS)I in Karlsruhe recently.
Over the past year, researchers at the institute have examined and analyzed 350 commercial driving profiles across Germany. "For up to one million small delivery trucks and cars, it would make sense for operators to switch from the internal combustion engine to electric drives in the future". This would be 25% of all commercial vehicles in Germany. E-vehicles make sense in any situation where the vehicles are in use on a daily basis, and where plannable routes of a limited distance are the norm. This is the case, for instance, with package delivery or outpatient care services, he points out.
Together with the partners of the "Regional Eco Mobility 2030" innovation cluster on External Link, Wietschel has now created a comprehensive database. "Until now, there have hardly been any data on the driving patterns of commercial vehicles in cities. Private passenger vehicles have been the main focus," he reports. The cluster has a broad interdisciplinary set-up that includes not only research institutes, OEMs, municipalities, and associations. "The market analysis also provides us with data that will enable us to develop a modern city vehicle, one that will combine battery and fuel cell technology and integrate intelligent software solutions," says Wietschel in explaining the goals of REM 2030.
Guidance from a recent UK event
The conference "Electric Vehicles - Overcoming Barriers, Driving Adoption Conference" in London on 30th April 2013, covered many aspects of adoption of commercial and private electric vehicles. It was claimed that sales of pure electric on-road cars and vans have been below expectations. One cited reason was new internal combustion engine cars being cheap and another was the need to put EVs only in applications where they can cope. The sales proposition is attractive to commercial users with high upfront cost but lower cost of running and of maintenance. The focus is now on fleets, commuters, company cars and total cost of ownership, though meeting the green agenda is also important. Those using these pure electric cars and similar vehicles are almost always very happy with them; that much from the Danish EV Alliance (with 97% of users happy) and Aston University in the UK. However, the business case for pure electric on-road vehicles is more niche than in the case with ICE ones. The Nissan Leaf was well received by staff of several companies reporting but numbers are tiny. However, the Renault Kangoo never got anywhere near to its claimed 80 miles range said JC Decaux, even bombing at 25 miles range in winter.
Oxford Brookes University, UK advised that EVs should look different from conventional cars and vans. At present they do not. People demand that they cost the same - not yet realistic. People perceive that they typically drive further than they actually do, which does not help sales. That and the upfront cost are part of the reason why in many countries, the sales of light commercial vehicles is exceeding the sales of pure electric on-road cars, they said. UPS, the world's biggest courier company, reported that it is trialling some converted pure electric Mercedes vans and e-trikes registered in Europe as motorcycles, both for postal deliveries and they are finding them attractive.
Yorkshire Ambulance Service in the UK is keen on pure EVs partly because diesel emissions have been now designated as carcinogenic - not in line with their image. Indeed, with 1490 response vehicles intensively used and 18,000 vehicles overall, the UK National Health Service (NHS) is responsible for 5% of road traffic and massive emissions of diesel fumes. Antidotes such as the Nissan Leaf are performing well with no range problems because they are used only on suitable missions but this greatly limits the number that are likely to be purchased. Methanol fuel cells, solar power, aerodynamics and range improvement (or less battery) from employing Protean Electric in-wheel motors are being examined. In short, this event illustrated reasonable prospects for certain pure electric commercial vehicles but not yet for pure electric cars in private or commercial use.
New research report from IDTechEx
The new IDTechEx report Industrial and Commercial Electric Vehicles 2013-2023 provides detailed analysis of all these aspects. If you are looking to understand the big picture, the opportunity, the problems you can address, this report is a must. Researched by multilingual IDTechEx consultants based in four countries and three continents, this report builds on ten years of knowledge of the industry.

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Posted on: July 5, 2013

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