Automotive

Is there light at the end of the EV tunnel?

18th May 2020
Joe Bush

We could all do with a bit of good news right now, not least in an especially hard hit industry like automotive. But there is some light at the end of the tunnel: signs are that the electric car market will be energised when we do emerge from the current situation, and that’s good news for both industry and the climate. Charley Grimston, Co-founder of Altelium explains.

A contributory factor to this view is that people will want to avoid diesel and petrol forecourts – something already evident just a few weeks in. Picking up a pump that has been previously been handled by unknown others, then touching a pay screen or entering the shop to pay, raises fears of contamination. And while we do all long to return to normality in our everyday lives, until we know how the virus is transmitted, these are very real concerns. By contrast, electric cars can be recharged at home where there is more evident control over cross contamination.

I also believe that people will want to do things differently and better for the sake of the environment. It’s fascinating to see how nature is responding to humans in lockdown. Consider this quote from Fei Liu, an air quality researcher at NASA’s Goddard Space Flight Centre, describing levels of nitrogen dioxide over China: “This is the first time I have seen such a dramatic drop-off over such a wide area for a specific event.”

Further, pollution levels have fallen by 50% in New York due to measures taken to contain the coronavirus. Given that transport contributes 23% of global carbon emissions, and driving is by far the largest element of that, contributing 72% of transport carbon emissions, it’s not hard to see the difference that is being made.

I’ve no doubt that when the engines of the economy restart, we’ll want to try and preserve these gains and my prediction is that consumers who can afford to buy cars will learn from this and want to play a part in making the world a better, greener place by choosing electric options.

A report published by the Journal of Nature cites how electric vehicles produce less carbon dioxide than petrol cars across most of the globe. And while there have been lingering doubts in some quarters concerning the environmental credentials of electric cars centred around the battery; this report helps alleviate those concerns. So, when people start buying again, they will buy with the environment in mind - and that means electric.

People who are buying will also want to buy well. This global lockdown is like nothing we have ever experienced, but what many of us have experienced is recession. And in times of recession, warranties have greater resonance with both the consumer and the manufacturer.

For consumers, warranties are a sign of quality and give reassurance. For manufacturers, they are a powerful selling tool underlining their belief in their product quality and protecting profit margins.

Profitably is also protected further downstream, where warranties allow manufacturers to offer a range of customer service and support, underwritten by their insurance.

How can we be sure this is the case? Well Altelium have been providing damage and breakdown extended warranty and renewable energy insurance for plant and machinery for over 20 years and navigated ourselves and our customers through huge fluctuations in the market. During such times, warranties have provided consistent protection.

Until now developing warranties on electric vehicles has been difficult, not least with the battery because the technology is so new. Traditional lead acid batteries are underpinned by data and industrial standards developed and refined over many years, and this helps inform investment or warranty decisions. But a lack of data around electric batteries has held back investment decisions with too much perceived risk to facilitate long warranties where the product’s performance and longevity is less well tried and tested.

Now though, intelligent data gathered in real-time from electric batteries and enhanced with AI learning can present past, current, and likely future performance of the battery at an individual cell level.

Systems like Altelium can now unlock market potential because armed with this data, the battery can be given guaranteed second life uses.

The warranty is the catalyst for change here. A comprehensive warranty at battery level can include service and breakdown cover for the cell in its second life situation as part of a static energy storage system. This in turn extends the revenue stream for the manufacturer or the owner of the storage facility.

It also extends carbon footprint calculations for the car itself because the battery cells will be in operation for so many years.

This is entirely in the spirit of the time. During the Great Depression, Bernard London famously put forward a proposal: “Ending the Depression Through Planned Obsolescence”. But the approach must now be quite the reverse with electric cars being an exemplar of how to energise the automotive market by ending this instantaneous recession through intelligent planning.

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