By Brian Dunn
How big is the electric vehicle (EV) market? It’s big in places like California, but is growing here too. During a presentation at the International Economic Forum of the Americas in Montreal on June 13, AddEnergie, of Montreal, confirmed it was launching a network for recharging electric vehicles (EVs) in five provinces. The initiative has the backing of Quebec’s largest pension fund manager, La Caisse de dépôt et placement du Québec, while a provincial investment agency has provided $12.8 million to support the project.
Called the FLO network, it will initially have 2,000 charging locations in Quebec, Ontario, British Columbia, Nova Scotia and New Brunswick. AddEnergie said its goal is to add 8,000 more charging stations across Canada over the next five years. It will also introduce charging station for homes.
AddEnergie is among companies predicting electric vehicles will become a mainstream alternative to gasoline-fuelled cars as EV technology improves and governments work to reduce emissions of greenhouse gases. The company has also developed a smartphone app to identify the closest available charging station and make payments. It will have support from operators through a 24-hour toll-free number.
Widespread adoption of electric vehicles has been hampered by consumer concern over the availability of charging stations, the time required to charge EV batteries and the distance that can be travelled between charging sessions. Led by Europe and China, the EV market grew by 20 per cent last year, according to Claire Curry, Head, Advanced Transport, Bloomberg New Energy Finance. Growth in North America, but is being hampered by low gasoline prices and smaller vehicles. “China is the largest manufacturer of EVs in the world. Their target was to produce one million EVs last year, but they only managed to produce 500,000. There will be 6.5 million EVs on the road this year and 40 million or 15 per cent of all cars by 2040.”
Ford currently offers three plug-in models and will introduce more as demand increases, said Mike Tinskey, Global Director, Vehicle Electrification and Infrastructure, Ford Motor Company. Barriers to increased demand include the total cost of ownership, and sales in North America are stagnant due to low gasoline prices. “But the convenience of plug-ins at home and vehicles with 200 to 300-mile range will be huge enablers. However, to promote the industry further, we need the (charging) infrastructure in place. Most charge at 50 KW. We’ve already surpassed 100 KW chargers. We have no boundaries.” It costs about $50,000 to install highway charging stations.
Many dealers are reluctant to carry EVs as they tend to sell more slowly than regular vehicles, said Patrick Hertzke, Principal, McKinsey & Company. A gas tax could spur more consumer demand, he suggested. He predicted a “collision course” between automakers and regulatory authorities over carbon emissions over the next five to ten years.
Norway is a feel-good story for EVs which accounted for 60 per cent of new car sales last year due to government incentives, a carbon tax and separate lanes for EVs. Atlanta, Ga. was the second-biggest EV market in the U.S. in 2014 due to state and federal subsidies and free plug-ins at work. However, the benefits were recently removed due to the cost to taxpayers and EV sales dropped by 90 per cent.
In 1991, lithium iron batteries cost $3,000. Today they cost around $200, according to Karim Zaghib, Director, Energy Storage, Hydro Quebec Research Institute. In the next five years, new technology will see the development of lithium sulphur batteries to enhance energy density, he added, and noted Hydro Quebec is developing charging stations with some of its partners. There is a lot of push-pull between governments and OEM stakeholders as to where EV is heading. “If electric utilities, regulators and OEMs worked together, it would be the best solution. Infrastructure is not a low-cost investment. Governments can help clear the hurdles by imposing fees for peak demand charges,” said Mr. Hertzke. A major challenge in places like India and China is charging reliability, noted Mr. Hertzke. It is less of a barrier in North America where there is usually a second family vehicle.
“A car is as much as an emotional purchase as a practical one. Millennials perceive EVs as dull. OEMs need to push the vehicles as compelling to drive and put advertising dollars behind their promotional efforts.”