Is the internal combustion engine running on fumes? According to a 2017 report by ING (pdf), recent developments in charging infrastructure, range and pricing, as well as increasing concern about the environmental damage caused by petrol and diesel cars (as illustrated by the Volkswagen emissions scandal), could see battery electric vehicles (EVs) account for 100% of new passenger car sales in Europe by 2035. That’s quite a turnaround given that in 2013 only 50,000 EVs were sold in the EU (pdf) – around 0.4% of all new cars sold.
So how did we get from there to here?
Creating the market
Although EVs were popular in the late 1800s, the lower cost, higher speed and greater range of combustion engine cars – particularly Ford’s Model T, introduced in 1908 – effectively killed them off for the best part of a century.
Surging oil prices in the 2000s recharged interest in hybrid and electric cars, however, leading to increased sales of the Toyota Prius and the introduction of the Tesla Roadster in 2008 – the first all-electric car capable of travelling more than 200 miles on a single charge. Tesla then went on to develop the revolutionary Model S.
“[The Model S] was the first car that was good enough to compete with a combustion engine car, and even beat it on several fronts,” says Max Erich, a senior economist at ING and co-author of the company’s report on the future of the European EV market. “Tesla, in my opinion, showed that you can make an electric car that is sexy, that is desirable.”
Increased competition
Tesla’s success pushed other major car manufacturers towards developing their own EVs, such as the Renault ZOE, BMW i3 and Nissan Leaf – the best-selling EV in history with worldwide sales of over 260,000 since 2010.
Gareth Dunsmore, electric vehicle director, Nissan Europe, says that “on the economic front, EVs are now genuinely in reach of most car-buyers”. He believes that a decade ago “this simply wasn’t the case, and would largely explain why 2016 saw a record in the sales of EVs worldwide with 750,000 sold globally”.
All the major car manufactures now have a wide-range of EVs in development, which will offer consumers more choice and further boost sales. Volkswagen, for example, plans to introduce 80 new “electrified vehicles” – which includes 30 hybrids – by 2025. While Volvo recently announced that it would only launch hybrid, plug-in hybrid or 100% electric cars from 2019.
Charging infrastructure
In 2010, public charging points for EVs were few and far between. Today, there are 112,500 public or semi-public charging points in Europe (pdf).
The UK government’s Plugged in Places programme, which was introduced in 2010, provided support to a number of regions in the UK to help them install the current charging infrastructure. Now the focus of both government and private sector companies is to build fast charging networks.
“More rapid chargers need to be rolled-out,” says Melanie Shufflebotham, director of Zap-Map, a site which maps UK charging points, “but there’s a lot of evidence that that is coming”.
That’s backed up by ING’s report, which predicts that rapid chargers that could enable a 300km charge in 20 minutes are likely to appear from 2018 onwards. Earlier this year, five of the biggest charging network operators in Europe also announced the Open Fast Charging Alliance, which will make it easier for EV drivers to use networks in other countries when travelling across the continent.
Better batteries
Most EVs use lithium ion battery packs, the costs of which “have come down by a factor of five to 10 over the last seven years”, says professor David Greenwood, head of the advanced propulsion systems group at WMG, the University of Warwick. “And battery energy density, which determines vehicle range, has doubled in the last 15 years,” he adds.
Although some of Tesla’s EVs can now reach ranges of up to 370 miles, most EVs – particularly at the affordable end of the spectrum – are more likely to manage between 100-150 miles before needing a charge, which many consumers consider (rightly or wrongly) to be inadequate for their driving needs.
ING predicts that new battery technology should improve range to meet consumer expectations from 2020 onwards. For instance, companies such as Toyota, Volkswagen and Bosch are working on solid state batteries, which offer increased energy density by a factor of two to three. While Tesla’s Gigafactory (a huge battery plant) “will enable it to bring a volume model to the market, and produce batteries at lower prices”, says Erich.
Government support
Over the past decade European governments have offered a range of incentives to encourage drivers to switch to EVs.
For example, in 2011 the UK government introduced its plug-in car grant of £5,000 (€5,600) - which has since been reduced by £500 (€560) - while the electric vehicle home charge scheme allows buyers to get £500 towards the cost of installing a charging point at their home. The £40m (€45) Go Ultra Low City scheme, which is backed by government and the car industry, also aims to encourage electric driving.
“Since the introduction of government’s plug-in car grant in 2011, registrations of electric cars have grown dramatically from 1,089, to last year’s volume of 36,673 – contributing to the UK’s EV total that now exceeds 110,000 cars,” says Poppy Welch, head of Go Ultra Low.
The Dutch government has sped the adoption of plug-in EVs through exemptions on registration fees and road taxes, which helped it achieve its target of 15,000 to 20,000 EVs on the roads by 2015 two years early.
Norway, meanwhile, has used a combination of bus-lane access, free parking, toll-free travel and tax exemptions to drive EV sales. It now has the highest per capita number of all-electric cars in the world.
Last year the German government also announced a €1bn incentive scheme designed to boost sales of EVs, and mandatory EU emissions targets for all new cars have created a further incentive for governments to support the switch to EVs.
Content on this page is paid for and produced to a brief agreed by ING, sponsor of the rethinking business hub
