“Today I will talk to you about the scale of electrification of transport and the execution of this agenda,” began Thierry Mortier, saying that he would reveal two secret ingredients in this journey: “One is fleets and the other is infrastructure”.
Mortier began by showing why this electrification is necessary: “25% of greenhouse gases come from transport and 400,000 premature deaths, 90% of Europe’s residents are exposed to pollens”. “We are not on the right trajectory, as we all know, we have to do better to get a 65% decrease in emissions, and we have lots of funds, we have €1 trillion available next year to promote this agenda. There is a huge effort that needs to be made. The President of the European Commission, Ursula von der Leyen calls this a man-on-the-moon moment and I think she is right.”
But how can we execute this agenda and where do we start? “As I said before, I believe there are two essential components to be successful. The first is fleets. Looking at a study we did recently, which talks about fleets and the adoption of electric cars, let’s imagine the future in 2030: 100 climate-neutral cities, 30 million electric vehicles on the roads, three million public charging stations. How do we do this? Picture the number of people we need to put on the street to install all these chargers and maintain them?”, questioned the head of E&Y.
And he gave the city of Shenzhen in China as an example. “We went to China on a so-called EV Safari [Electric Vehicle Safari] to see the electrification of transport at scale. Shenzhen is a city that started by electrifying its public bus network and now 30% to 40% of the cars today are already electric. In fact, the whole city is electrifying, by 2019 they had one million charging points, by now they must have three million charging points,” Mortier recounted, adding that this example “is something we should keep in mind in the electrification of Europe and Portugal.”
Why fleets first? Why do we think fleets are the key element in the electrification of transport? The questions were asked and then aswered by Thierry Mortier. “20% of vehicles are currently part of a fleet. It doesn’t seem like a very big number, but they represent 40% of the kilometers driven and 50% of the emissions. So it makes sense to start with fleets. What’s more, fleets are more investable and routes more predictable, among other advantages.”
The next question, reveals the head of E&Y, is which fleets will be the best ones to implement electrification? “60% of the fleet market is company cars, pool cars and commercial vehicles. And we recommend cities, companies and governments to start with these types of fleets.”
Mortier also mentioned that one of the conclusions from the study he mentioned earlier, has to do with the fact that many people think about buying an electric vehicle in terms of range, availability of the cars. “But I don’t think that’s the issue. The issue that we have found is that people choose their electric vehicle if they are guaranteed that their business is not disrupted, or if it is a private individual if they are guaranteed that their family is not disrupted, that they can take their children to school, for example.”
To support this theory, the representative of Ernst & Young spoke of an experience that they carried out and that has to do with the capacity of the battery, something that previously had no importance, but which is currently a decisive factor when choosing an electric vehicle, particularly in the case of companies, as they may or may not represent a business disruption.
“In the last year, I have seen the conversations change from ‘I don’t know if there will be enough cars’, because I think there are enough models, to ‘we might have problems with the infrastructure’,” noted Thierry Mortier. “And this brings me to the second part of my presentation. How is infrastructure crucial for the adoption of electric vehicles?”.
Infrastructure is going to be, argues Ernst & Young’s Global Digital & Innovation Lead for Energy, “the barrier to electric vehicle adoption. If you look at the numbers of chargers needed and the investment that is required to achieve this we are talking about a huge task ahead of us. And I’m not sure we will be able to execute it in operational and funding terms.” By 2035, 62 million chargers will be needed in Europe, from private chargers to superfast chargers, Mortier revealed. “And that is a problem,” he stressed. “Not for the electricity needed, but for the capacity. It’s not a kW per hour problem, but a kW problem.”
A new study that E&Y is carrying out aims to understand, among other things, where the focus needs to be kept to achieve the spread of the electric vehicle, namely on this issue of charging. “We see six examples here, motorway corridors, fleet hubs, night hubs, workplaces, residential condominiums and private residences,” he showed, saying that it will be through this observation that they will “understand where the biggest problems will occur. ” My prediction is that in private family residences it will be a minor problem, on the contrary, I think that motorway corridors will be a problem because of the connections to heavy truck chargers.” The results of this study will be known in early February.
There is also the question of funding, how will all this be funded, because funders are not very enthusiastic about the return figures and how long that return takes. “But if you add advertising, better leases on the properties, vertical integration, you can improve values by 10 to 15 percent,” Mortier explains.
Digital control of the networks is also something that should be implemented, argues this expert. “Knowing where the charging points are, if they are working, how they interconnect, how they can be repaired if necessary, is an absolute necessity, it’s a necessity for network operators, it’s a necessity for traffic control agencies, it’s a necessity, for governments and for cities, and it won’t be possible to do this without technology. So digital enablement for the electric vehicle is crucial. And that’s why we at E&Y have invested in building a system, we’re building a national operations center in the US for electric vehicles like we’ve seen in China and we’re talking to European partners to do the same in Europe.”