Several factors will make 2023 a true test to the resolve of governments and the automotive industry in driving battery-electric vehicles (BEVs) forward, according to two new reports from Gartner: ‘Top Automotive Trends for 2023‘, and ‘Predicts 2023: Automotive and Smart Mobility‘.
The spike in electricity prices in Europe are making BEV running costs less attractive, with some countries, like the U.K., Switzerland and Australia, starting to introduce EV taxation. In addition, China ended electric vehicle subsidies at the beginning of 2023, and global charging infrastructure still has many coverage gaps and the average quality of service is poor.
Meanwhile, the sharp increase in raw material prices like lithium and nickel are expected to drive BEV costs higher, which will make it harder for original equipment manufacturers (OEMs) to close the price gap with internal combustion. As a result, BEV sales may grow at a considerably lower pace or stall in some markets, making investments related to BEVs take longer to achieve break even.
However, Gartner said that this downturn period also provides an opportunity for automotive CIOs to help their companies grow their market share through technology. For instance, several established automakers are trying to transform into technology companies, but their corporate culture has been a major obstacle to their ambitions.
“This must be their starting point to avoid widening the gap with digital native automakers and grow their revenue via the use of technology even further,” said Pedro Pacheco, VP analyst at Gartner. “Succeeding alone will not be possible for a traditional OEM or supplier, however, and each of them must forge partnerships with at least some digital giants -such as Sony, Alibaba, or Huawei – if they want to remain profitable and competitive in the industry.”
Gartner predicts that by 2026, more than 50 per cent of EVs sold globally will be Chinese-branded automobiles. According to Mike Ramsey, VP analyst at Gartner, there are more than 15 Chinese companies selling EVs and many of these are smaller and much less expensive models than those sold by foreign rivals. While foreign automakers like Tesla, VW and GM are selling a lot of EVs in China, the growth is much faster with Chinese companies.
As demand grows around the world for EVs, Chinese firms are well-situated to take advantage of the growth with good access to key minerals and battery manufacturing capacity in China. Gartner recommends that automotive CIOs focused on EVs integrate supply chain planning and visibility software to ensure better business decisions about where key materials are sourced and ensure resiliency for key materials.
Commenting on the Gartner reports, Daniel Auger, IEEE senior member and reader in electrification, automation and control at Cranfield University, said that, for the next few years, lithium-ion batteries will dominate the market as a result of their high technology readiness level.
“There has been extensive work on lithium-sulfur batteries as they have been found to be very light weight, however, their behaviour is more complex than lithium-ion. These are perhaps less important in static energy storage applications,” continued Auger. “At Cranfield University, we have been able to develop novel Battery Management System (BMS) algorithms that enable lithium-sulfur to work more efficiently, and we have exploited artificial intelligence and control theory to assist with this.
“As it currently stands, we do have the right technology for energy storage – in fact the range of technologies we can use is broader than that. However, one of the biggest challenges facing the electric vehicle market as a whole is distribution and scaling up production, though the UK Government has funded some great work here. These processes will take time and will require further investment if this new approach is to work, especially given current market pressures and energy spikes.”