What is Keeping Customers From Electric Driving Today?
It has been announced for a while, but now the time has come to drive electric. The e-automotive market in Europe is expected to triple in the upcoming five years. From 5 million cars produced in 2021 to almost 16 million in 2026. Material engineering will be key to launch a successful electric vehicle (EV). Therefore, car manufacturers are currently the third biggest investors in R&D.
What is Keeping Customers From Electric Driving Today? Today, customers can choose between five propulsion systems in the electrified automotive segment: Mild Hybrids (MHEV), Plug-in Hybrids (PHEV), Full Hybrids (FHEV), Battery Electric Vehicles (BEV), and Hydrogen or Fuel Cell (FCEV) driven vehicles.
The confined -yet increasing- driving range, the limited availability of charging stations, and the higher price segment of EVs still hinder customers from purchasing one. Car manufacturers certainly recognize and understand these customer pain points and are currently developing solutions ranging from optimizing current systems to innovating completely new designs to make electric driving mainstream as fast as possible.
What Are The Top Research Areas
The automotive industry faces its largest challenges since its existence, as a vehicle is totally being reinvented; from the body, over the propulsion system, to interior and the technologies and materials used. EVs will bring a whole new level of interconnectivity regarding data sharing and networking features which eventually will become the new standard.
Nevertheless, material engineering will be a critical differentiator for EV success. Innovations range from the battery capacity, over the material used for the battery pack, to the car’s body including all its components.
- First, today, all EVs are equipped with Lithium-ion batteries. In the short term, optimization of this Lithium-ion battery is coming. With built-in technology, the conditions of the battery will be tracked, informing the driver on its performance and safety. In 5 to 8 years from now, the next-generation battery -a solid-state battery- will be commercialized. Not having a fluid electrolyte, the flammability and thus the fire hazard of the battery will be reduced significantly. In addition, solid-state batteries will have superior fast-charging capabilities.
- Secondly, weight reduction is another big topic to extend the Ev’s driving range. Depending on the type of vehicle, and thus its needs (e.g., comfort or speed), a wider range of materials is becoming available for optimal use and minimal weight. Traditional steel will not remain the default body material. Either light-weight steel or aluminum are trending. Tesla, for example, has launched a “unibody” in its model Y, or single casting aluminum body. For other components, the industry investigates the use of SMC (Sheet Moulding Compound) or a carbon-fiber enriched plastic to reduce weight and keep the required strength. Additional benefits of a lighter vehicle is its ability to offer a better driving experience in terms of acceleration, braking, and handling.
Who Is Leading The EV Production In The European Market?
The Potential is Enormous!
The electrified automotive market will push the original Internal Combustion Engine(ICE) vehicles back to a share of only 25% in 2026 and this decreasing trend is only expected to continue.
Environmental awareness among customers, regulation and standards set by governments on a global and regional level as well as strategic outlines of car manufactures ensure that your next car will be electric.
So, when will you buy your EV?
by Steffi De Roy, Senior Consultant Transaction Advisory
About Telescope Advisory Partners
Telescope is a Munich-based data-driven advisory boutique for transaction, due diligence and innovation strategy focused on small- to mid-cap deals. We advise private equity as well corporate M&A clients in their acquisition process with a strong focus on data acquisition to substantially support target identification, acquisitions and growth potential assessments.
About Telescope Advisory Partners
Telescope is a Munich-based data-driven advisory boutique for transaction, due diligence, and innovation strategy focused on small- to mid-cap deals. We advise private equity as well corporate M&A clients in their acquisition process with a strong focus on data acquisition to substantially support target identification, acquisitions, and growth potential assessments.
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