How are Electric Vehicles Revolutionizing the Auto Industry?

The sales of electric vehicles are surging rapidly with China and Tesla leading the charge. The company sold 56,000+ electric cars in China in September 2021. Moreover, CEO of Chinese EV Company Nio said that the industry should be able to meet the government's goal of having EVs account for 20% of total sales next year, three years ahead of target.

An electric vehicle or generally referred to as an EV is a vehicle that is partially or fully powered by electric power. These vehicles are environmentally friendly as they use very little to no fossil fuel. EVs use batteries to power themselves, along with internal combustion engines like traditional vehicles. Some EVs also use lead-acid or nickel-metal hydride batteries; however, lithium-ion (Li-ion) is considered to be the standard nowadays due to their longevity, high power storage capacity, and self-discharge rate of only 5% over a month.

There are three main types of electric vehicles in the market, i.e., Battery Electric Vehicles (BEVs), Plug-in Hybrid Electric Vehicles (PHEVs), and Hybrid Electric Vehicles (HEVs). Let us have a brief overview of these vehicle types.

Battery Electric Vehicles (BEVs): These fully electric vehicles come with rechargeable batteries. There is no internal combustion engine in these electric vehicles. Moreover, BEVs create very little noise as they have no exhaust, spark plugs, clutch, or gears, and no emission. Tesla Model 3 is arguably the most popular electric car in the world. In March 2021, Forbes said that the model was the 16th bestselling car in the world and also the bestselling EV of all time, followed by the Nissan Leaf in second place.

Hybrid Electric Vehicles (HEVs): Hybrid electric vehicles are both electric and fossil-fuel powered. The vehicle is powered via regenerative braking or while driving using the combustion engine. These vehicles do not have a charging port and cannot be charged by the grid. The hybrid electric vehicles can only go 2-3 miles before their battery runs out of juice and they shift to the internal combustion engine. Toyota Corolla, Hyundai Ioniq, Toyota Prius, Kia Niro are some of the popular hybrid car models.

Plug-in Hybrid Electric Vehicles (PHEVs): Plug-in hybrid vehicles provide the best of both worlds as these vehicles run on both electric power and fossil-fuel-powered engine. These vehicles can recharge their batteries and can also plug into the grid to charge their batteries. Plug-in hybrid electric vehicles differ from regular hybrid vehicles in terms of battery capacity. These vehicles have much larger batteries and provide a range of anywhere from 10-40 miles before their gas engines assist. Additionally, most PHEVs do not support fast charging. Audi A3 E-Tron, BMW 330e, BMWx5 xdrive40e, Ford C-Max Energi, Mercedes GLE550e, Mercedes S550e, Porsche Panamera, Volvo XC90 TB, and Porsche Panamera S E-Hybrid are some of the most popular PHEV models.

Difference between Hybrid and Electric Cars:

Electric vehicles (EVs) have approximately 90% fewer moving parts than ICEs (Internal Combustion Engine), which reduces the maintenance requirement for EVs and enhances the working life of the vehicle. A brief introduction of the major components of an EV is given below.

Battery: Battery is probably the most important component of any electric vehicle as it stores and electrical energy and provides power to drive the vehicle. The battery of an electric vehicle can be charged through ordinary grid electricity at a specialized power station. Lithium-ion (Li-ion) batteries are now the standard battery type used in electric vehicles; however, Lead-acid batteries and Nickel-metal hydride batteries are also used in some electric vehicles.

Motor Controller: Motor controller administers its complete operation and the distribution of its power at any given moment. It acts as a bridge between the motor and batteries. The motor controller also monitors and regulates the vehicle’s operator, motor, battery, and accelerator pedal. The microprocessor present in the controller can limit or redirect current and it is used to either improve the mechanical performance of the car or suit the operator’s driving style.

Electric Engine: The engine of an electric vehicle only has one movie part, which makes it a very reliable source of motive power. The engine of electric vehicles depends on the system voltage of the vehicle and electric engines can be structured to use either AC or DC. AC motors are preferred for their low cost, lightweight nature, and less mechanical wear and tear; however, AC motors require more sophisticated technology compared to AC motors.

Regenerative Braking: Regenerative braking in any electric vehicle utilizes the forward momentum of the vehicle to charge the battery. It is an essential component of hybrid electric vehicles as those vehicles cannot be charged from the grid. Regenerative braking can recover up to 15% of used energy from the acceleration.

Drive System: Drive system of an electric vehicle transfers mechanical energy to the traction wheels and generates motion in the vehicle. EVs do not require an internal transmission and the drive system used is much simpler than the one used in internal combustion engine vehicles.

Inverter: An inverter in an electric vehicle converts AC from DC and DC from AC as per the requirement of the electric vehicle. The inverter can also change the speed of motor rotation by adjusting the frequency of the alternating current. It also captures the energy released from regenerative braking and sends it to batteries.

The demand for electric vehicles is surging day by day. According to the Global EV Outlook Report of 2021, 2020 has been a fruitful year for EV sales even amid the COVID-19 pandemic, registering a staggering 43% increase reaching 10 million in EV sales as against 2019. Across the EV sector, battery-led electric vehicles (BEVs) had recorded over two-thirds of the total EV sales made in 2020. Additionally, Europe registered the highest annual increase by recording 3.2 million in sales for just a year.

Data gathered by the European Alternative Fuels Observatory (EAFO) shows that the number of new electric vehicles registered went up significantly in 2020.

Source: The European Alternative Fuels Observatory, commissioned by contract by the European Commission

The graph below shows the growth of the electric vehicles, especially electric cars in the European Union. The number of electric cars have registered a meteoric rise in the European Union countries in recent years.

Source: The European Alternative Fuels Observatory, commissioned by contract by the European Commission

According to the International Energy Agency (IEA), the total consumer spending on electric vehicles reached USD 120 billion in 2020, a 50% increase from 2019, with the government spending USD 14 billion on direct purchase incentives and tax deductions for electric cars in 2020, a 25% increase from 2019. 

IEA also states that 18 of the top 20 OEMs have committed to increasing the offer and sales of EVs. These 18 OEMs accounted for almost 90% of all worldwide new car registrations in 2020 and have announced intentions to increase the number of available models and boost the production of electric light-duty vehicles (LDVs). For instance, Volvo has announced that the company will only sell electric cars in Europe from 2030 onwards. General Motors has also announced that the company will only offer electric light-duty vehicles from 2035. Volkswagen, the parent company of brands like Audi, Lamborghini, Bentley, Porsche, and Ducati, announced that it has set a target of achieving 70% electric car sales in Europe, and 50% electric car sales in China and the United States by 2030.

Original equipment manufacturer announcements related to electric light-duty vehicles

Source: International Energy Agency (IEA)

Governments around the world are also promoting electric vehicles to cut carbon emissions and meet the targets of the Paris agreement. The governments are investing in the development of electric vehicle charging station infrastructure, providing subsidies for electric vehicle purchases, replacing fossil-fuel-based vehicles from its fleet with electric vehicles, and much more. For instance, in August 2021, the President of the United States, Joe Biden set a target of 50% electric vehicle sales share in 2030 and also announced the development of long-term fuel efficiency and emissions standards. On 9th November 2021, Indian Union Minister, Nitin Gadkari said that the Indian government is working on strategies to increase the sales of electric vehicles. He further added and said that in the next two years the cost of Electric Vehicle's in India will drop to the level of petrol vehicles.

As the demanding investment from the government increases in the development of electric vehicle charging station infrastructure and people become more aware of the benefits of electric vehicles, the demand for electric vehicles is expected to increase even more in coming years.

According to BlueWeave Consulting, Global Electric Vehicle Market, By Propulsion Type (Battery electric vehicle, Hybrid electric vehicle, Plug-in hybrid electric vehicle & Fuel-cell electric vehicle), By Charging Type (Normal charging & Supercharging), By Vehicle Type (Passenger Vehicles, Commercial vehicles & Two-wheelers), By Region (North America, Europe, Asia Pacific, Middle East & Africa, and Latin America); Trend Analysis, Competitive Market Share & Forecast, 2021-2027,  is projected to grow with a CAGR of 10.6% over the forecast period. The growth of the market can be attributed to the favorable government policies and support in terms of subsidies and grants, tax rebates, and other non-financial benefits in the form of carpool lane access, the increasing vehicle range, better availability of charging infrastructure, and proactive participation by automotive OEMs. The technological advancements in EV batteries and ongoing R&D to increase the range of electric vehicles are further expected to propel the growth of the electric vehicle market in the coming years.

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