EV transition factors and projections, majority of vehicles in the 2030s

By Clive Attwater Jack Gilding and Phil Harrington, RenewEconomy, 22 Aug 2017

Most informed commentators have a rough idea of where our electricity network is headed over the next few decades – more distributed generation, more large scale renewables, more local storage, a smarter grid.

It is surprising then that the equally important issue of the transformation of our transport system is far less discussed and predictions vary widely.

Beyond Zero Emissions (BZE) says that with a concerted effort, the Australian car fleet could consist solely of electric vehicles (EVs) by 2025.

The CSIRO/ENA Energy Network Transformation Roadmap assumes as it central case that only 40% of light vehicles would be EVs by 2050.

AEMO bases its electricity forecasting on modelling by Energeia with a similar slow and linear transition.

Most of the existing predictions are based on assumptions of a gradual linear transition under existing business models and do not reflect recent overseas experience and the nature of technology transitions.

Taking these factors into account we expect that the transition to EVs in Australia will start later and happen faster than most existing predictions.

The Australian Electric Vehicle Association (AEVA) identifies five factors that need to be in place to support widespread take-up of EVs:

  • Familiarity: EVs should be seen as ordinary, with people understanding their characteristics and use
  • Adequate useable range: proposed by AEVA as being a minimum of 250 km real range on the highway
  • Perception of adequate infrastructure: enough charge stations located where required, in public locations as well as at home and common destinations
  • Variety of models to meet a range of needs: the vehicle market is highly differentiated in both features and cost
  • Cost comparability: whether achieved through lower selling price or subsidy/incentives to buyers.

AEVA stresses that all factors are required for substantial EV uptake. To date in Australia essentially none of these criteria have been met.

Once all five conditions are met, EV uptake will accelerate rapidly. In Norway, where some conditions are still not met (range of models, complete infrastructure coverage) or only recently met (adequate range), 30% of all newly registered passenger motor vehicles were EVs or plug-in hybrids (PHEVs) in 2016, and the take up rate continues to rise reaching 42% in June 2017.

So when are these conditions likely to be met in Australia?

  • Familiarity: we estimate that about 1% of vehicles would need to be EVs. At this level most people would encounter EVs from time to time as taxis, fleet cars at work, through friends that have one and hear about owners’ experience in general discussion.
    We estimate that this benchmark will be met between 2023 and 2028 but it could happen earlier.
  • Adequate useable range: Models with the 250 km range are likely to be more widely available from 2018 to 2019, although there will still be a market for cheaper, shorter range vehicles for second car / urban usage.
    In the short term PHEVs that have a 50-100km electric range plus an internal combustion engine for longer trips will also address the ‘range anxiety’ problem. In the longer term pure EVs will be cheaper and more reliable than PHEVs.
  • Perception of adequate infrastructure: Without significant investment and encouragement, incomplete charging infrastructure is likely to be a significant constraint on EV take up in regional areas and for urban dwellers that want the flexibility of taking their family vehicle on longer country trips to more remote areas. This is one of the areas where government initiatives can make the most difference to meeting the preconditions for EV adoption.
    Even with some initiatives starting now and public support, this is likely to be a 5 to 8 year process, though parts of south eastern Australia could get substantial coverage faster than this. Covering central Australia will take much longer.
  • Variety of models to meet a range of needs: we expect this condition to be largely met for sedans and SUVs relatively early in the 2020s and for other vehicle types between 2025 and 2030 on a global basis.
    However, we also expect that the Australian market will be one of the last to be served due to the historic low uptake rates, lack of incentives offered and the relatively small global market for right-hand drive vehicles. Consequently Australia may lag the rest of the world in receiving a growing range of models by two to four years.
  • Cost comparability: The cost of EVs is largely determined by battery costs. These are falling rapidly due to volume production (for both vehicle and electricity network applications).
    BMW have claimed that their electrified models will be cost comparable to purchase (in Germany) with equivalent ICE models by 2020. Australia will lag until EV volumes here climb to levels more nearly comparable to ICE models.

New technologies are not taken up linearly. After an initial period of slow adoption, take-up tends to accelerate until the market approaches saturation.

What’s more this process (the S-curve) itself is accelerating. Figure 1 illustrates the extent to which the rate of take-up of new technologies in the USA has increased over the last century.

Since 1975 many new technologies have moved from less than 10% of households to over 70% in not much more than a decade.

In figure 2 we have modeled several scenarios of how the EV share of new vehicle sales might take off using these assumption with both an early and late take-off date and a high and low ramp-up in take-up rate.

Applying these rates to the turnover of the light vehicle fleet we estimate that EVs will be the majority of vehicles in Australia sometime between 2032 and 2039.

For comparison we show the BZE model and ENA Network Transformation Roadmap projection.

A transition to largely electric transport would have massive implications for our economy, carbon emissions and the planning of our electricity system so it is worth having the most accurate predictions we can.

The advantages to Australia of replacing most of our fossil fuelled cars with EVs are numerous and substantial; increased energy security, improved balance of trade, reduced air pollution and a major contribution to reducing our greenhouse gas emissions.

For vehicle owners EVs offer a major reduction in running costs, lower repair costs and longer vehicle life, as well as quieter and higher performance driving.

One benefit of a transition which is consistently underestimated is the role that EVs could play in supporting a smarter, more versatile electricity grid. Next generation EVs will typically have 40-60 kWh of storage, around four times the capacity of the Tesla Powerwall 2 currently being installed in conjunction with solar PV.

If most of the 18m vehicles in Australia were electric this would equate to 900 GWh of storage, of which as much as half could be made ‘accessible’.

That is 3,500 times bigger than the Tesla battery to be installed in South Australia and about what might be required for a 100% renewable grid. Read story here

Of course batteries in EVs will not be available for grid support 24/7 but they have the potential to be connected to the grid for 16-20 hours a day at either base or destination.

Most will have spare capacity on most days.

With the right control software and financial incentives they could provide services including catering to peak demand and providing fast response ancillary services without compromising the customer requirement for reliable re-charging and adequate range when needed.

We do believe a transition to predominantly electric transport is inevitable in the next few decades. However there is much that can be done to speed this transition.

This will both bring earlier economic and environmental benefits, and maximise the overall benefit to Australia. A slower transition will mean that we are largely importers of technology developed overseas.

A proactive approach can make sure we add value locally and perhaps even develop new export industries in battery and vehicle manufacture.

Policy action to support the EV transition does not need to involve costly vehicle subsidies. Maximum benefit for government investment can be achieved by supportive policies such as:

  • providing government and private fleet operators with information about the total cost of ownership benefits of EVs, particularly in urban and high mileage applications
  • coordinating bulk purchase of EVs across multiple fleets as a way of reducing costs and encouraging manufactures to make models available in the Australian market
  • facilitating the development of public fast-charging networks
  • changing electricity market rules to provide incentives for grid-connected EV infrastructure to provide energy storage and network services.

Clive Attwater is a Director of SGS Economics & Planning. Jack Gilding is the Executive Officer of the Tasmanian Renewable Energy Alliance. They are members of the Tasmanian branch of the Australian Electric Vehicle Association. Phil Harrington is Managing Director of Strategy. Policy. Research. Pty Ltd.