The six essentials for e-mobility (Eurelectric & EY study)

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Introduction

This report is written based on Eurelectric’s study EVision 2023, Power sector accelerating e-mobility that has been created with the help of the consultancy company EY. The study reveals how e-mobility is pushing beyond early adopters and into the mass market much sooner than anticipated. It identifies 6 essentials for the e-mobility transition and the way to get them right.

The EV market in numbers



*Sources below.

What are the 6 essentials that bring challenges and opportunities for the electric future?

The six essentials for emobility

Source: EVision 2023, Power sector accelerating e-mobility

1.Critical raw materials

Compared to internal combustion engine (ICE) vehicles, EVs require significantly more critical metals and minerals. According to IEA, 2022, the demand for copper will increase 10x, for lithium 9x, nickel 14x, magnese 3x, cobalt 3x, and for graphite 10x between 2019 and 2030. Given the scarce access to some of these important materials and the supply chain issues we have faced in recent years, facilitating access to resources is one of the most crucial elements for e-mobility.

2. Clean power generation

In 2022, the transport sector accounted for almost 25% of all emissions in the European Union (Eurostat). There is no doubt that electric mobility can reduce emissions from the transport sector, but there is still a need to improve the energy efficiency of electric vehicles and switch to renewable energy sources to avoid burning fossil fuels.

“EVs are only as clean as the energy that powers them.”

Electricity demand is expected to increase by 200 TWh, which is about 5% of total electricity demand in Europe. Due to the volatility of the electrical power system, the question of connecting all electricity-intensive machines to the increasingly loaded grid arises.

3. Grid management

According to EY, 2023, for every €1 invested in clean energy, 50¢ should be invested in the low-voltage grid. With the necessary grid reinforcement, we will provide a more modern, digitalized, and decentralized energy system.

With vehicle-to-grid (V2G), EVs can also provide a solution to increasing energy demand. The technology offers EV drivers the ability to shop excess energy from renewable sources in the vehicle’s battery and sell it back at peak times when energy supplies are tight. A recent study by IRENA showed that V2G can reduce grid reinforcement costs by 10%.

Charging_infrastructure

Source: EY analysis – EV Charging Infrastructure Forecast, February 2023

4. Charging infrastructure

According to ACEA, there are currently around 470,000 public charge points accessible in Europe and by 2035 we will need at least 2 million. The biggest challenge is that 71% of all charge points are located in only 5 European countries – France, Germany, Italy, the Netherlands, and the UK. In contrast, 10 European countries have less than one charge point per 100 km of road.

The lack of public charging infrastructure is still the number one concern of customers wishing to switch to an electric car. The cross-border hassle-free access to EV charging infrastructure is also one of the challenges needed to be addressed.

It is essential to focus on connecting the charging infrastructure at home and at work to the grid, as the majority (over 80%) of charging sessions will take place there. Smart charging infrastructure enables charging during periods of lower tariffs. In addition, demand-driven flexibility helps reduce the risk of overloading transformers or transmission lines, thereby mitigating the need for expensive grid expansions.

Source: EU alternative fuel infrastructure”, European Alternative Fuels Observatory, European Commission, accessed 15 February 2023

5. Digitalisation for consumer acceptance

Andrew Horstead, lead analyst at EY, discussed the difference between driving an EV and an ICE vehicle. Charging an EV requires a completely different mindset than fueling a car. You do not go to a gas station, you charge at home, on the street, or wherever you park.

Over 50% of car buyers want their next car to be an EV because of supportive regulations, vehicle choices with improved range, and e-mobility technology.

To reach the mass market, solutions such as smart charging, financial incentives, digital tools, and interoperability are needed to make it affordable and easy to use while ensuring a seamless user experience.

Source: Adapted from CERRE energy data sharing the case of electric vehicle (ev) smart charging (cerre.eu), EY analysis

6. Skilled labour

According to EY, 2023, EV manufacturing requires very different skill set than ICE vehicles, although it requires fewer workers. The European battery industry alone will require 800,000 skilled workers by 2025. This means that those already working in the sector will need to be retrained and upskilled, and new workers will need to be recruited from similar sectors.

Let’s get the equation right

The six challenges above are also great opportunities – the chance to develop a secure supply chain for the energy transition, ensure energy from clean sources, promote an efficient grid management system, create new jobs and skills for people, and more.

The benefits of such an equation are clear: net-zero road transport powered by renewables, improving air quality and noise in European cities, and increasing independence from imports of polluting fossil fuels.

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