What Can Spur the Success of Electric City Vehicles?

The electric mobility market is booming as it offers significant environmental benefits, especially in urban areas. Governments are working together with private companies to come up with innovative business models to tackle issues such as customer acceptance, battery costs, charging stations, etc. In our interview Dr. Rainer Scholz and Ursula Schneider from the Mobility Innovation Group of a Global Management Consulting firm explain the main challenges associated with transitioning to electric city vehicles and how to overcome these challenges.

What are the main challenges faced when it comes to forward electric city vehicles?

In general: to allow for the business case of electric mobility, a critical mass will be key. This means that the diffusion of electric mobility needs to be higher than today. More EVs on the streets will lower the overall costs for batteries, intensify competition and therefore lead to more efficiency and cost cutting innovation.

However, electric vehicles are currently still very expensive and in order to make their usage more attractive there is a need to find a way to bring down costs while increasing usability. However, while the market for electric vehicles will grow, today’s concepts for energy supply will be challenged – in particular as electric vehicles should be powered with energy from alternative or renewable sources to help increase positive climate effects.

Last but not least the concept of electric city vehicles as described in the previous article relies on the connectivity of the vehicles to a smart metropolitan data-network. As of today one major challenge, however, is to provide relevant content in real-time (for example, weather, traffic, availability, etc.) to allow electric city vehicles to fully integrate into the city data network. Also, most cities are yet on the start of their development towards a real “smart city” that can effectively use such data.

How can those challenges be overcome?

Beyond technological innovations the transition to electric mobility will first and foremost require the readiness of customers to use and trust electric mobility. Funded pilot projects such as the German “showcase regions for electric mobility” are therefore an important step to allow for the adoption and acceptance of “the new” and support a behavioral change of users.

Secondly: costs for electric vehicles need to be brought down while usage needs to increase – for example, by streamlining the electric city vehicles design and motorization to what is needed while skipping unneeded attributes.

From a product point of view the question is for example: what vehicle attributes will a city eTaxi need? What attributes are essential to urban eCarsharing? What would electric cars look like that are designed to support city tourism? Various OEMs are currently in the process of developing ideas about what the “perfect” electric city vehicle should look like. Does it need the same interior as regular vehicles? Maybe other, overlooked materials, are much better suited for eCarsharing vehicles?

This is even more relevant, if we keep in mind that most city EVs would not be used by a single user, but will be shared assets for city transport. People will need more durable or antiseptic materials to promote and ease the shared use of cars. In geographies such as Asia this will become important to achieve customer acceptance of new city vehicles.

The challenge is that with each use case a need for a more customized design of the car evolves. However, single purpose electric vehicles will mean that cost benefits through broad scaling effects won’t be given right away and the automotive industry will need to think of new, more cost effective ways to produce such cars with individual attributes and a special purpose design. However, already today, some manufactures challenge the way cars are produced and prove that single purpose build cars are feasible – for example, through crowd-sourcing and micro-production.

Last but not least the convenient and effective usage of electric city mobility will require more connectivity of the car to its environment – for example, to pre-book into charge points and find parking spots, but also to send and receive real-time data on traffic conditions allowing the driver to avoid congested roads and chose a more time-saving an environmental friendly connection.

One major challenge, however, is to provide relevant content in-time (for example, weather, traffic, availability, etc.) to allow electric city vehicles to fully integrate into the smart city data network. This is why investments in digital technologies and infrastructures are important drivers to support the uptake of EVs.

What is most important to boost the success of electric city vehicles? What are the next steps?

Most important will be to identify suitable use cases for electric city vehicles and consequently define a suitable business model that will allow to attract investors or cooperation partners to jointly undertake needed investments and drive innovation.

A first step should be an understanding of the cities situation: is the city ready for innovative electric city vehicles? What are the city’s most pressing needs with respect to motorized and individual city transportation? Preparing entrepreneurs or corporates to invest in electric city vehicle concepts will require an intense dialogue with cities to ensure a joint approach and a supportive city framework during the deployment phase.

But this dialogue does not come without its challenges: on the one hand side there is a decision making process influenced by the administrative law with stakeholders in various public authorities – on the other side corporates that are driven by profitability requirements. Both sides need to be aligned and find mutual understanding of success drivers in a joint approach towards a cities mobility management.

Do you think single purpose electric city vehicles with individual attributes will help cities to improve transportation? Share your opinions in our comment section.

Please note that this article expresses the opinions of the author and does not reflect the views of Move Forward.