Ernst & Young publishes report on global challenges and opportunities facing electric vehicle market

February 17th, 2012 by Ernst and Young LLP

(click on report cover to go to the Ernst & Young report download page)

Following comprehensive stakeholder discussions in Bonn, Detroit and Beijing, Ernst & Young has launched an in-depth report highlighting the global challenges and opportunities facing today’s electric vehicle (EV) market.

The Global Ignition Sessions report brings together these geographically diverse groups of stakeholders to focus on the critical, real-world issues facing the fleet, consumer and infrastructure segments and identifies ways in which to accelerate EV adoption in the coming years globally.

Gil Forer, Ernst & Young Global Cleantech Leader, commenting on the current state of the EV industry  said “electric cars are rolling off production lines and onto our roads and streets, with global hybrid, plug-in hybrid and full electric vehicle production numbers set to rise significantly over the next four years.”

“Companies across the spectrum are working overtime and partnering to embrace the EV opportunity and overcome deployment challenges. But the dress rehearsal is over. Hard work and cross-sectoral cooperation are required to build an enduring EV industry and to ensure a positive total customer experience,” he said.

Jeff Henning, Ernst & Young Global Automotive Markets Leader added “it’s clear that EVs are part of the automotive product portfolio and will be integral to solving complex mobility challenges of the future.”

Recommendations from the report include:

Supply more vehicle volumes and variety

The EV market needs breadth and depth to move beyond early adopters and serve different market segments. For consumers, this will help to ensure that buyers can find an EV model in the class of vehicle they require and for fleet managers, this means being able to purchase the right vehicle in volumes that make economic sense.

Create infrastructure standards and protocols to drive business model development

Government and industry must work closely together to develop and adopt common standards, such as the EU automakers’ agreement on plug standardization and software specifications. The lack of platform standards is inhibiting the rollout of broad-based solutions.

Create the easy button

A patchwork of regional incentives and permitting requirements has deterred prospective buyers. Entrepreneurial companies that can offer a seamless way to finance electric vehicles and have chargers ordered, permitted and installed, will help those watching and waiting. Achieving this will likely require forging creative partnerships up and down the value chain.

Provide the total customer experience

A seamless system for financing, purchasing, fuelling and servicing must be offered to EV drivers, to enable adoption.

Create an “iCar”

The electrification of transportation brings the automobile one step closer to being a consumer appliance. Marry EV technology with compelling industrial design and a revolutionary interface to create a vehicle mass consumer appeal.

Solve the residual battery value riddle

An industry-level effort involving manufacturers, researchers, utilities and entrepreneurs is needed to facilitate baseline projections for residual battery values. This could involve the creation of design standards to enable today’s heterogeneous and purpose-built batteries to be packaged together for new uses or materially recharged for reuse.

Educate the general public

As long as the majority of consumers consider the EV to be tomorrow’s technology, it will remain so. Communication strategies must be developed to increase mainstream consumer awareness and address misconceptions about EV technology.

Incentivize fleet adoption effectively

Corporate fleet managers are the ideal early adopters of EVs, given the predictability of fleet routes and the total cost of ownership advantages of EVs but the higher up-front costs of EVs are a barrier. Rather than offer corporate tax benefits, government incentives need to reduce the price of EVs at sale so that fleet managers can make a business case for EVs.

Think differently

With the advent of EVs, now is the time to take a fresh perspective on the automobile, whether it is placing it in the context of a mobility concept, thinking about new business models or welcoming new players into the EV ecosystem.

Engage the whole ecosystem

At this critical stage for the EV industry, manufacturers, integrators, battery makers, utilities and infrastructure developers must work together to bridge gaps in the value chain and forge creative partnerships to create a sustainable EV ecosystem.

Collaborate across borders

Sharing experiences lessons learned from EV trials taking place around the globe will benefit the entire industry; so will finding opportunities for partnerships based on comparative advantage.


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