Electric vehicle

What is an electric vehicle?

An electric vehicle (EV) is a mode of transport which is powered by electricity. Unlike conventional vehicles that use a gasoline (petrol) or diesel-powered engine, electric cars and trucks use an electric motor powered by electricity from batteries or a fuel cell. A key advantage of EVs over other forms of transport is that they hold the potential to significantly reduce pollution by having zero exhaust emissions.

How does an electric vehicle work?

EVs have an electric motor instead of an internal combustion engine (ICE). The vehicle uses a large traction battery pack to power the motor and must be plugged in to a charging station or wall outlet to charge. Most EVs use lithium-ion batteries, which have higher energy density, longer life span and higher power than most other practical batteries.

There are three main types of EVs. Hybrid EVs (HEVs) and plug-in hybrid EVs are both powered by petrol and electricity. The former generates energy through the car’s own braking system to recharge the battery, while the latter can recharge through any external source of electricity. Meanwhile, battery EVs (BEVs) are fully electric, meaning that the vehicle emits no emissions from the exhaust and does not contain the typical liquid fuel components, such as a fuel pump, fuel line, or fuel tank.

What are the benefits of electric vehicles?

EVs are an environmentally friendly alternative to petrol or diesel cars as they generate much less air pollution, releasing no exhaust air pollutants. From wheel to wheel, EVS emit approximately 66% less carbon dioxide (CO2) compared with ICE-powered vehicles. The emissions associated with the electric drivetrain of EVs come from power plants generating electricity to charge the batteries – emissions can therefore be further reduced if renewable energy is used to recharged an EV. Noise pollution is also cut out due to the fact that an EV is nearly silent.

Running costs for fuel, maintenance and car tax are much lower for EVs. As company cars tend to travel further on a daily basis, the payback on the original purchase price is faster, making EVs particularly attractive for fleets.

One of the biggest benefits of introducing EVs to a business is the reduced refuelling costs, with electricity being far cheaper than fuel at the pump. Indeed, fuel costs can be as low as 2p per mile. For an annual mileage of around 10,000 miles per year, switching from a conventional to an electric car or van could save around £800 in fuel costs alone.

EVs are also a lot cheaper to maintain, mainly because they have a lot less moving parts than a conventional fossil-fuel powered car. For instance, there is relatively little servicing and no expensive exhaust systems, starter motors, fuel injection systems or radiators. Recent research has shown that several EV features can improve safety – EVs tend to have a lower centre of gravity that makes them less likely to roll over, for instance.

EV owners can gain additional monetary value from an EV through the implimentation of vehicle-to-grid (V2G) technology, which provides demand-response services to the power grid. EVs can feed electricity into the grid when not in use through batteries during peak hours, and do most of their charging at night when there is unused generating capacity.

What is the market size of electric vehicles?

The number of EVs in the world accelerated past the two million barrier in 2016, as prices fell and manufacturers launched new models. China, the US and Europe accounted for more than 90% of EV sales in 2016, with China the single biggest market, according to research by the International Energy Agency. The UK sold the second highest level of EVs in the EU, with plug-in hybrids dominating sales despite the fact that the purchase incentive offered is decidedly less.

This growth in sales is matched by an increase in choice, with nearly 40 EV and hybrid models now on the market. There have been numerous commitments from automakers to introduce EVs into portfolios, highlighting that the electrification of cars should no longer be seen as a niche market. Most recently, Volvo pledged to introduce an all-electric portfolio by 2019. The world’s top selling plug-in EVs are the Nissan Leaf, followed by the Tesla Model S, the Chevrolet Volt, Mitsubishi Outlander P-HEV and Prius Plug-in.

Experts have suggested that EVs could represent 54% of all new car sales by 2040. The fall in battery prices is an essential component of this growing popularisation of EVs, with a very steep drop in prices to around €250/kWh in 2015 – more than three times the figure for 2009. Global battery production for EVs is expected to increase dramatically in the near future, driven in part by the opening of Tesla’s $5bn ‘Gigafactory’ in the Nevada Desert, which Elon Musk believes could reach $100/KWh by 2020.

What are the challenges to adopting electric vehicles?

EVs are generally more expensive to buy than their petrol or diesel equivalents for outright purchases. Battery technology is expensive, and because batteries in electric cars need to be able to hold vast amounts of charge to make the cars practical for most drivers, they have to be built using expensive materials, most of which are tough to procure.

EVs also often have long recharge times compared to the relatively fast process of refuelling a tank. While it takes a couple of minutes to fuel a petrol-powered car, an EV can take four to six hours to become fully charged (although this is now improving with the development of ‘rapid-charge’ systems).

Many EVs have a limited range due to the low energy density of batteries compared to the fuel of ICE vehicles. Most EVs have a relatively short driving range of between 100-150km. However, the ranges of electric cars are increasing as newer models hit the market. The next-gen Nissan Leaf is expected to be able to handle 300km on a single charge and the latest Tesla Model S has a range of 500km.

Batteries do wear out so replacement batteries will eventually be needed. Most car manufacturers warrant EV batteries for around eight years. But it should be noted that, when an EV battery reaches the end of its vehicle life, it may still have secondary value – by storing electricity from solar PV panels, for example.

The rise of EVs is yet to be matched at pace by charging infrastructure. In the UK, Uber has rolled out its own London-based charging initiative to combat a lack of charging systems in the city, but other new innovations are generally slow to arrive to the market.

What policies and regulations impact the electric vehicle market?

Many governments offer incentives to promote the use of EVs to reduce air pollution and oil consumption. Some incentives intend to increase purchases of EVs by offsetting the purchase price with a grant. Other incentives include lower tax rates or exemption from certain taxes, and investment in charging infrastructure.

In the UK, the Government has backed an overarching plan for all new cars and vans to be zero-emission by 2040 with various funding streams. The UK Government moved to incentivise the low-carbon vehicle market in 2011 through the launch of the plug-in car grant, which gives buyers up to £4,500 towards the cleanest new cars. More than 100,000 electric cars have been sold in the UK under the grant scheme. Under new rules which came in April 2017, zero-emission vehicles that cost less than £40,000 new are exempt from Vehicle Excise Duty (road tax).

Chancellor Philip Hammond confirmed in the 2017 Spring Budget that EVs would benefit from a new £270m fund. This followed the 2016 Autumn Statement which outlined £390m of new funding for low-carbon transport, including testing infrastructure for driverless cars and charging points for Ultra Low Emission Vehicles (ULEVs). There are also plans to create an Ultra Low Emission Zone (ULEZ) in London by 2019.

Elsewhere in Europe, Emmanuel Macron’s French Government announced the country will stop selling petrol and diesel vehicles by 2040. Norway accounts for the highest percentage of purchased EVs globally, and has a target in place to only sell all-electric or plug-in hybrid vehicles by 2025. And in the Netherlands, EV sales represent by far the largest share of total new cars sales at nearly 10%, thanks largely to generous subsidies.

UPDATE: On 26 July, Environment Secretary Michael Gove unveiled the Government’s long-awaited Air Quality Plan, which includes a ban on all new petrol and diesel cars. The Plan is effectively the start of the end of the internal combustion engine, with consumers and businesses being encouraged to switch to electric vehicles. It puts £1bn towards the development of ultra-low-emission vehicles, as well as almost £100m to support the UK’s electric vehicle charging infrastructure and to fund the ‘plug-in car’ and ‘plug-in grant’ subsidy schemes. Read the full story here.

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