Five things you didn’t know about the electric vehicle market

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Morgan Stanley lists electric vehicles as one of 7 key market and technology options well positioned to mitigate or adapt to climate change. Here’s why.

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They might not be driving them yet, but electric vehicles are definitely on the radar of some of the world’s top investment and market analysts. Last week, US-based global investment bank Morgan Stanley named “alternative fuel vehicles” as one of seven key market and technology options it sees as well positioned to mitigate or adapt to climate change.

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The call was made in Morgan Stanley’s latest research report examining the most relevant climate change mitigation and adaptation options, policy developments, and investment implications.

The report, Addressing Climate Change and the Investment Implications – A Primer on Climate Change, notes that key technological solutions like EVs may see more investment and deployment driven by technology maturity, mitigation potential, economic feasibility, and political support.

This is nothing we don’t already know, but further on in the report, Morgan Stanley has a closer look at the current state of the “alternative fuel vehicles” market and comes up with some interesting predictions and information tidbits:

1. Battery cost is expected to drop significantly  And by significantly, Morgan Stanley means by a good deal more than half. The report points to Tesla, which aims to produce a battery that costs only $US100/kWh – currently, the average EV battery costs between $US250-400/kWh – from its under-construction Gigafactory.

2. Apple will likely launch into electric cars  This is something many have been predicting, since the tech giant hired former Chrysler executive Doug Betts, who has auto industry experience spanning 30 years. And if they do join the EV game, Morgan Stanley says it would “change the industry landscape considering Apple’s scale, innovation and integration capability.” apple-car-sign

Recently, Morgan Stanley US auto analyst Adam Jonas argued that technology companies, including Google, Samsung, Uber, etc. were better suited to bringing successful EV products to the mass market, pairing them with a sharing-economy model to increase utilisation and shorten pay-back periods.

3. Progress will be made around range/charging issues  Another of the key barriers to EV mass uptake – after cost of batteries and infrastructure – electric vehilce range has been restricted to around 100 miles (160km) pretty much since the first EV was driven. But according to Morgan Stanley, GM and Tesla plan to launch models with driving ranges greater than 200 miles (320km).

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In the meantime, policies to develop better recharging networks in major cities and along major travel routes are expected to help counter range anxiety. Morgan Stanley points to a policy unveiled by Beijing Municipal in February to provide investment subsidy of 30 per cent for building public charging stations.

4. New black cabs in London will be EVs with zero emissions from 2018  And these new-age London icons will be built by Chinese manufacturer Geely, according to Morgan Stanley, which has already invested £250 million in production facilities.

Of course, London, under the leadership of Mayor Boris Johnson, has been a leader in policy to drive the uptake of low-emissions vehicles. Most recently, the City of London introduced further lowered the congestion charge for ultra low-emission vehicles, and proposed giving decommissioning grants to taxis that are were than 10 years old – to encourage drivers to switch to electric cars. The policy update also proposes increasing the number of electric vehicle charging points, and could even lead to the introduction of preferential access and lower parking charges for electric vehicles in some parts of London.

5. There’s not much competition from hydrogen fuel models in the market  The fact that hydrogen cars – the first example of which arrived on Australian soil in April – have been one of the few low-carbon technologies to attract the attention of federal industry minister Ian Macfarlane, might serve as a warning to some investors. But they get a mention in the Morgan Stanley report, if only to note that the Hyundai Tucson hydrogen model (the same that Macfarlane welcomed), launched in 2013 with a sales goal of 1,000 models by end of 2015, had only achieved around 25 percent of this goal as of June.

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8 Comments
  1. Alex 4 years ago

    If McFarlane thinks a “green” technology is good, then we had better pay close attention to the fine print.

    • Stan Hlegeris 4 years ago

      Ian MacFarlane, Minister for Industry and Science, likes hydrogen fuel cell vehicles because they are many years away from commercialisation and pose no threat whatever to the status quo. Plus, of course, they require fossil fuels as their energy source.

      He is, of course, on the record as disliking battery-powered electric cars of the kind we can buy today.

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  2. George Michaelson 4 years ago

    Taxis are a special case since the cost of compliance with taxi licencing makes the actual cost of a vehicle significantly less relevant: its the cost of the licence plate to operate. (non-taxi carhire is shifting this, and industry deregulation like what happened in Dublin alters this)

    So bearing this in mind, London classic black cabs could go all electric, and simply buy 2x the number of required vehicles and slow-charge them to cycle through the battery exhaustion. It would be mad, but possibly economic because the capital cost of over-provisioning the cabs wouldn’t alter the economics much: it just displaces purchase in time over a 10 year window, from across the window to up-front (assuming replacement cars, batteries were needed anyway)

    personal use cannot do this: we can’t have 2x the storage overhead to keep a car and a spare. But the taxi companies can. So in some ways, albiet a bit counter-intuitively, they can go all-electric NOW.

    At least, in economies where the compliance cost of a licence is up north of $200,000

    Oh look: thats Melbourne, Sydney, Brisbane, Perth…

    • Ricardo_62 4 years ago

      Why have a whole spare car? The “Better Place” model of a drop in / drop out battery would be perfect for taxis

      • George Michaelson 4 years ago

        True. And, London taxi’s are flat-floor so there is potential. Its a purpose built vehicle so I guess at the cost of either a higher step-up/in, or a battery under the seat they could do it.

        • Robert Hyndes 4 years ago

          I’m a great fan of the black cabs, after experiencing taxi’s all around the world, they do provide the best overall experience (for the mainstream) specifically made for purpose, they run forever, they are made for groups, made for wheelchair access, driver interaction etc.

          Interestingly, what no one seems to know is Manganese Bronze (now the London Taxi Company) had very early on begun R&D on building an electric prototype (a couple of years before Tesla). Pretty bleeding edge stuff back in 2002! A bit too edgy for the group. The project was bought by the former CEO/Chairman James Borwick which then became Modec, an electric vehicle company building mid sized commercial goods trucks. Pretty tough challenge, bleeding edge, everything would have been from a blank piece of paper and being just that too early the battery choice were dismal (lead, nickel nitrate and trailed a molten salt battery). I think they manufactured 10-15,000 vehicles before collapsing under massive pile of debt in 2011.

          The Cab company didn’t fare any better by sticking to the traditional cabs, its went into receivership and acquired by its major shareholder Chinese auto group Geely. A quick search on Google suggests that they are now looking at electric options.

  3. Robert Hyndes 4 years ago

    I’m a great fan of the black cabs, after experiencing taxi’s all around the world, they do provide the best overall experience (for the mainstream) specifically made for purpose, they run forever, they are made for groups, made for wheelchair access, driver interaction etc.

    Interestingly, what no one seems to know is Manganese Bronze (now the London Taxi Company) had very early on begun R&D on building an electric prototype (a couple of years before Tesla). Pretty bleeding edge stuff back in 2002! A bit too edgy for the group. The project was bought by the former CEO/Chairman James Borwick which then became Modec, an electric vehicle company building mid sized commercial goods trucks. Pretty tough challenge, bleeding edge, everything would have been from a blank piece of paper and being just that too early the battery choice were dismal (lead, nickel nitrate and trailed a molten salt battery). I think they manufactured 10-15,000 vehicles before collapsing under massive pile of debt in 2011.

    The Cab company didn’t fare any better by sticking to the traditional cabs, now Chinese owned (Geely). A quick search on Google suggests that they are now looking at electric options.

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