Local govts should promote use of electric cars

Challenges remain to the widespread adoption of xEVs. The current range of pure EVs is limited, charging can be inconvenient and consumers have concerns about premiums and uncertain expenses.

Additionally, some governments are struggling to provide incentives while others are trying to protect their indigenous xEV players.

Some of these challenges are being addressed through advances in technology, manufacturing and vehicle integration.

Batteries, power electronics and e-motors, for example, represent about 40 percent of the cost of a pure EV and somewhat less for a hybrid.

PwC estimates that by 2020, costs for these items will have fallen about 40 to 50 percent.

The current cost premium of a pure EV is about $10,000, but we estimate that this will decline to about $3,000 by 2020.

The most complex part of the EV equation remains the charging and servicing infrastructure.

Slow charging, which can be added to existing infrastructure, is cheaper to install but takes many hours while fast charging requires significant infrastructure investment.

This explains why hybrid and plug-in hybrid EVs remain the preferred types.

Charging infrastructure forecasts depend heavily on government policy and consumer adoption rates for plug-in hybrids and pure EVs. PwC has forecast that by 2020, approximately 427,000 public charging points will have been established in the United States, 407,000 in China and 381,000 in the European Union. That will promote adoption.

But consumer experience ultimately is the key to adoption, and here China may already have an advantage. Millions of urban consumers already use e-bikes, and this year Chinese producers will turn out about 30 million e-bikes.

As these consumers trade their bikes for cars, they may adopt electric vehicles more readily than people in other countries.

Local governments in cities such as Shanghai, accustomed to promoting e-bikes and banning gasoline scooters, need only make a small switch to promote xEVs.

The author is PwC China Innovation leader

 

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