2021 OCTOBER
EVERYTHING TO KNOW
AT THIS STAGE
ABOUT
ELECTRIC VEHICLES
Written by : Andrew Sia
Introduction
The automotive industry is in the middle of a revolution which has never seen before. It was never like this with so many options that lead to competitions and we have to know what have brought us to the industry today.
The industry began in the 1860s with hundreds of manufacturers who built the horse carriages, who turned into building the automobiles. Just that we know, in 1929 before the Great Depression, the world has 32,028,500 automobiles in use, and the US was accounted for over 90% of the world’s industry. It was until 1980 the position was takeover by Japan and in 1994 the US became the world’s leader again. Afterwards, the US and Japan were jockeying the ranking until 2009 China came to the top spot and produced 13.8 million cars. And since then China almost double the production of the US with 19.3 million, while the US produced only 10.3 million, and Japan was in the third place with 9.9 million units.
In our other article titled “China the Giant Juggernaut – Part 8”, we mentioned about the leading of the electric vehicles and we mentioned that in 2028 China will be making 8 million cars by then, compared with one million in 2020. The US is falling very behind in this case and judging from the way this electric vehicle is going, if the US do not have a clear plan for the automotive industry, it will be falling behind both Japan and Europe as well. We can understand why the current Biden administration is showing his concern. But the bipartisan government should come in agreement for the spending of the infrastructure that is required to make this move from production of vehicles using combustion engines to electric vehicles.
In this article, we are gathering information and let our readers know the situation out there. We have to be aware of the revolution that is coming and perhaps we can pick up something as well.
What is Electric Vehicle?
An electric vehicle (EV) is a vehicle that uses one or more electric motors for propulsion. It is powered by a battery and uses electricity to power the vehicle. EV is the term to refer to an electric car and it is emphasizing on renewable energy. It is known for the reduction of carbon emissions from vehicles that are used extensively for transportation on land.
Already governments from different countries have provided incentives to promote the adoption of the EV in the late 2000s. Due to the limitations of storage batteries, with the full battery that can allow the driving range of 220 miles, although the new models claimed that the new range can be 280 miles, but the available of the charge points is always a concern. The battery of the EV is important, and because of its size and weight, it is placed at the bottom of the car and it is used to stabilize the car.
In fact the electric cars have been around at the same time when the motor vehicles were introduced in the 1800s. In the middle of 1900s it was being reintroduced. Now due to the pressing issues of the global warming, the automotive industry started to look carefully into this option and I believe that going forward it can replace the motor vehicles using the fossil fuel.
Benefits of the Electric Vehicle
There are many positive signs out there. First of all, it was a record year for Tesla and it is making record profit. The picture is showing the Tesla Model S. General Motors plans to sell only electric vehicles by 2035. Volkswagen is aiming in making them cheaper than cars using gasoline.
Most important that at least two-thirds of the American citizens are open in buying EVs.
Electric cars are fast, easy to drive, require little maintenance, no exhaust pipes means no carbon emissions, and friendly to climate change.
What is available out there is a big range of brands for you to consider. Electric vehicles like Hyundai Ioniq, Nissan Leaf, Mini Cooper SE, start around $30,000 which are very affordable and also ecological. There are more luxurious ones, such as Porsche Taycan, Hummer which is already a beast, is offering the behemoth electric Hummer from GMC, and this is followed by Mercedes-Benz’s EQS are all the statement pieces for those who go after their status symbol. These EVs are all in the ballpark of $100,000 a piece.
The government is looking into the infrastructure for charging the electric vehicles. Already the oil companies like Royal Dutch Shell is building their public charging network, and it is also integrating the charging in their gas stations.
For car owners, they can charge their cars at home in their garage or driveway overnight for the next day’s use. But the typical household outlets, due to the voltage of 110-volt, will take painfully long to full charge an EV. It is worth to look to install a faster 220-volt outlet, like those used for the clothes dryers as the battery charger.
We have to admit that Tesla is still the most preferred EV as Elon Musk spent all his effort to build up this market and until now the market exploded with many other offers. But we have to appreciate that Tesla built up an easy-to-access charging network for the exclusive use of its car owners from the beginning.
There are more cars coming into this market—the electric version of Ford’s iconic F-150 pickup, Ford Mustang’s Mach-E, Volkswagen’s ID4, Volvo’s XC40 recharge, Audi’s Q4 e-Tron sport utility vehicle, BMW’s i4 sedan, Hyundai’s Ioniq 5 sport utility vehicle, and Nissan’s Ariya sport utility vehicle. All of a sudden the market is full of choices.
It may seem to be costlier than the gasoline vehicles, but if you consider the federal and state tax breaks, utility grants and all the other savings, they can help to offset the cost. It is already known to the owners that electric vehicles are cheaper to operate and will spend 60% less to drive the car, be it the sport utility vehicle or truck. It is also half as much on repairs and maintenances. There is also no oil changes needed.
Although hybrid is an alternative, they have been around for a longer time and they have more models to offer, we are not to talk about it today. Having said that, the gasoline powered cars have grown increasing efficient and they emit less carbon with the new technology in recent years.
The United States Position with the Electric Vehicles
In the recent Biden’s visit to Ford Motor Company in Michigan, he brought up the plan of spending $4 trillion to help America in its race with China in the decade of global competition to come. For the automotive industry, he mentioned about investing hundreds of billions for positioning domestic manufacturing of electric vehicles, research into emerging technologies which include advanced batteries.
To combat climate change, by 2030 the carbon emissions will have to come down 50% from 2005’s level, and by 2050, it will reach the zero emissions, the federal spending will focus on low-emission vehicles. An effort to convert one-fifth of the nation’s school fleet to electric power, to build 500,000 electric charging stations, offer federal and state tax breaks, are all the efforts to be spent by the administration.
We know that for vehicles power by gasoline are responsible of 29% of the nation’s total emissions. But everything is depending on whether the car owners would shift to electric vehicles and this is the winning point. The challenge does not stop from here, right now the big player for the electric vehicle is Tesla alone, for Ford’s pickup owners are a special breed as they like the noise the combustion motor makes, its gas gobbling, the macho and “king of the road” image. Currently, Ford is selling 900,000 F-Series pickup trucks a year, and to move from this into the electric pickup, even I would not be that certain for the move.
Besides, the union for the autoworkers have always been very powerful. They have already expressed their concerns after they have realized the requirement of workers for the electric vehicles is about a-third less than the regular vehicles.
With the bipartisan parties, would Biden be successful in his plan for the electric vehicle industry is still wait to be seen.
What is in the Future for Electric Vehicles?
Foxconn, the famous contract manufacturer for electronics has its headquarters in an industrial suburb in Taipei, and it is famous for supplying Apple for the iPhones. Lately it showcased a prototype car chassis made out of steel and rubber at the first members’ meeting of MIH, an industrial alliance founded by Foxconn to offer a complete software and hardware for making electric cars. It delivered a message that the company that has been making the iPhone is now ready to make the electric car as well. It is a fusion for two of the world’s largest industries—car manufacturing and electronics.
The electronics industry was at an estimated $2.2 trillion last year and employs up to 18 million people according to the International Labor Organization. The total revenues of the automotive industry was $2.2 trillion in 2019 and the industry hired about 14 million people according to the UN Industrial Development Organization.
The integration of the two largest industries in the world—car manufacturing and electronics—and the changes that they will bring to the world will definitely be something that can be mindboggling.
The electronics industry is taking its advantage known for shorter product cycles and overall speed to the automotive industry which began in 1860s and the industry has not been shaken, and not to say if it has ever been revolutionized.
In a matter of months, Foxconn put together more than 1,200-member companies in MIH, from software giants like ARM to German plastic parts supplier, Konzelmann. It has already set up joint ventures with Chinese and Taiwan carmakers, like a co-operation agreement with Chinese electric vehicle company Byton and signed a deal to manufacture for the US electric vehicle designer Fisker from late 2023. Since Foxconn has taken the first step, it will make it easier for Apple, also to enter into the car market.
In the US, Foxconn can use its sprawling plant in Wisconsin, and its multi manufacturing locations in China where it is still hiring close to one million people.
For Taiwan, assembling parts for electric vehicles is not something new, Pegatron, another Taiwan group making iPhone, is assembling parts for Tesla. Another Taiwanese manufacturer of a wide range of power electronics components, is making EV charging modules and powertrains for components that convert the engines’ power into movement. This integration of the electronics industry and automotive industry has blurred the line that separates the two industries.
Many countries have set dates to phase out cars using gasoline and diesel, and car company like General Motors have made plans to sell only electric vehicles by 2035.
Electric vehicles look the same from the outside with very similar performance, but inside they are completely different. The car makers are facing the decision to acquire new capabilities in electrical engineering and software, or they will be facing the brutal reality, that is being forced to phase out eventually. On the other hand, the electronics industry will need to learn new mechanical capabilities and adopt product safety concepts.
Almost like every industry, the cooperation between suppliers from an early stage of development is nothing new, but the process can be too long as there has not been any stimulations or challenges. But with the introduction of the manufacturing process of electric vehicles, the response will be shorter, and suppliers are coming from entirely different sectors. The process is calling for cost effectiveness. Both industries are finding bigger changes in front of them.
I would like to point out that the current coronavirus pandemic has exposed the weakness of the supply chain due to the shortage of the microchips. The car industries are sending out profit warnings for their performance. The traditional supply chain is calling for reinspection.
The two industries have two different production cycles. The car industry has the production cycle of several years and it is built on products highly customized to appeal to its consumers depending on their different needs. The electronics industry is used to churning out new models every so often, sometimes in months. Remember that each generation for the iPhone takes ten years and in between there are so many newer editions for instance.
The car industry needs high safety and reliability standards and each of the 30,000 components inside the car have to function seamlessly. The parts inside the internal combustion engine car are 30,000 pieces, and the electric vehicle has only 20,000 parts.
With the electronic companies like Foxconn, and many companies will join, they will take the auto industry to a new level. It will start with the car design which can be simplified because of the skill used in the electronic field, the internal of the vehicle will use more computing content and it will be consolidated for the functions and use the centralize manufacturing unlike before. A lot of complexity will be eliminated and there will be a lot of space for the driver and the passengers.
Like the iPhone and the computer, update of the software is becoming more urgent. We have not even touched the area of the autonomous electric vehicles, because of its self-driving function, its software will need to be continuously updated.
The last thing is about the safety and we cannot stress enough the stricter observation of its safety standards in the car industry. The motors inside the electric vehicle is moving constantly and at high speed, it generates a lot of heat. It has to be enclosed in a metal case and the way to cool it is very important. We have seen cases that motors are caught on fire. It is an area to pay special attention.
Conclusion
This transitional period from combustion engine to electric engine will still take some time. But I think that it will change sooner than we would have expected. There is the market waiting to be taken over. If we add up what LMC Automotive, the global date firm who estimated by 2028 China will be producing eight million electric vehicles, Europe will be producing 5.8 million by then. And the US will be only producing 1.4 million EVs. Altogether we are talking about 15.2 million EVs already.
So that we know the annual car market is between 90 million and 100 million, this will be only a fraction of it. I am wondering that by 2035 how will the market look like. It would be not that distant from where we are today.
And besides we have to go for the zero carbon emissions by then and moving away from combustion engine to electricity is not that far either.