Only time will tell, but it may be that in the future only car buffs or techno-Luddites will still actively own internal-combustion-engine automobiles.
Sure thing, you say, I’ve heard that before. True, that future is hard to pin down for certain right now, but some obvious momentum is building toward electric vehicles as the ride of choice. Millennials, the important sector for gauging future consumer patterns, express commitment to cleaning up the environment and less emotional attachment to the car culture of yore.
In fact, forecasts indicate that EVs would number 10 million in only six years and outnumber conventional automobiles by 2040, creating a $2 trillion economic opportunity for electric utility companies in North America and Europe, according to a new report by Accenture Strategy.
The report-Utilities: Lead the Charge in eMobility-was released Tuesday at Accenture’s annual International Utilities and Energy Conference held at the Ritz-Carlton in the oceanside northern California community of Half Moon Bay. Accenture’s research included input from 6,000 consumers globally.
Of that group, 63 per cent said they would switch to EVs to save money on operation and maintenance costs in the long term. Current obstacles in this market, however, include high costs of vehicles and charging stations, long charging times and impact on energy bills.
But that’s actually good news because the fix is already happening on all of those fronts.
“The top obstacles are things that are actually changing” for the better, said Greg Bolino, managing director of utilities strategy for Accenture, during the IUEC event this week. “These things will solve themselves pretty quickly.”
Indeed, EV battery costs-as high as $750 per kWh in 2010-have fallen more than 80 per cent in the past six years. Battery-driven cars are fast becoming comparable to conventional autos, price-wise.
Companies such as GM, Ford, Volkswagen, Mercedes, BMW and Tesla, of course, are investing big in positioning future EV models for the marketplace. Apple recently hired dozens of key Tesla people on the battery side.
“It’s pretty clear” that momentum is growing, Bolino said. “Talk about a ‘holy crap moment’ for the OEMS.”
Utilities don’t have to be left behind, the report pointed out. Consumers want them as trusted advisers, with opportunities open in energy sales, financing, charging infrastructure, fleet management and more.
“Over 80 per cent of future EV owners plan to charge their vehicles primarily from their homes,” the report reads. “Yet, only 55 per cent have their own garage.”
For utilities wondering where future demand growth is possible in an era of decentralized energy and retiring baseload plants, the Accenture study noted that EV-led commodity sales could top $1.7 trillion in Europe and North America by 2040.
The future opportunity is not without its challenges, such as the need for $150 billion in required costs to provide public charging infrastructure. Yet utilities have a potential $250 billion eMobility-related services market to tap through such services as charging station installation, maintenance and financing, according to the report.
To the last point, more than half of current EV owners responding to Accenture’s survey financed or leased their batteries, while a similar portion of potential future buyers expect to acquire their home charging station as part of a packaged deal.
“Companies that can help make EV ownership easy and affordable for consumers will accelerate adoption and improve competitiveness across their industries,” Bruno Berthon, senior managing director and global utilities lead for Accenture Strategy, said in a statement. “Utilities are uniquely positioned to play a significant role in the eMobility market by providing differentiated and meaningful customer experiences, while making critical ecosystem partnerships.”
Those ecosystem partnerships can include car manufacturers, fleet operators, charge point operators, ride-charging companies and parking space owners. More than half of utility executives queried by Accenture said they believe ecosystems will create new competitive advantages and customer experiences.
Some studies have forecasted that EV charging could increase electricity demand by 25 per cent and more.
Southern California Edison, Ameren, Duke Energy and Pacific Gas & Electric are among the leading utilities working toward development of more expensive EV charging networks.
Rod Walton is content director for Power Engineering and POWERGEN International, happening Nov. 19-21 in New Orleans. He can be reached at 918-831-9177 and firstname.lastname@example.org