True rapid charging — paired with reliable, widespread networks — will unlock the next level of EV adoption.
28 Jul 2024 | 4623 Views | By Arun Vinayak, Exponent Energy
"Is the range good enough?" "It's so much more expensive." "I'll have to spend lakhs on a new battery after a few years." These are probably the three biggest concerns for people who today shy away from an electric vehicle.
Range anxiety, upfront cost, and battery degradation. Automakers and ...
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"Is the range good enough?" "It's so much more expensive." "I'll have to spend lakhs on a new battery after a few years." These are probably the three biggest concerns for people who today shy away from an electric vehicle.
Range anxiety, upfront cost, and battery degradation. Automakers and battery manufacturers around the world have grappled with this trilemma — especially the first two points, which seem to be in direct opposition.
They put in bigger batteries to address range anxiety, but that drives up costs. To cut costs, they work on economies of scale and efficiency, but also ultimately have to face the fact that the battery is up to 40% of the vehicle's price. What may not be obvious is that "range anxiety" is actually charging anxiety, i.e.
What happens when long charging times meet sparse, unreliable networks. Think about a petrol vehicle—nobody worries about the "range" of a full tank. They know they can find a fuel station easily, that it will be running, and that they can top up in minutes, not hours.
The real problem, therefore, is charging anxiety, which brings us to the real solution: faster charging. When you can get a full charge in 10-15 minutes or less with a large, reliable network of rapid chargers, you don't worry about how far you can go on a single charge.
It also addresses the affordability issue as automakers can now drop battery capacities to make a vehicle lighter and cheaper. When it comes to battery degradation, regular consumers shouldn't have anything to worry about. For personal cars and two-wheelers, the life cycles of current batteries are fine for the majority of customers.
For heavy use commercial vehicles — 10% of vehicles in India, but ~70% of the energy used — batteries wear out faster because daily utilisation is far higher. The technology is in place today to deliver rapid charging without higher battery degradation over thousands of cycles. We can up the number of cycles a battery can handle, while simultaneously delivering much faster charging. We believe these two things — faster charging and longer life — are what the automotive industry needs to accelerate EV adoption at an exponential rate. Let's drill deeper into each point.
Charging speed:
The waves of EV growth around the world have so far been largely driven by buyers who can park and charge at home or are buying two-wheelers — i.e. initial customer segments have been satisfied with medium-speed public charging.
But that approach will hit a wall — arguably, it's already happening, with headlines like "Electric Vehicle Boom Hits a Wall of Consumer Ambivalence" doing the rounds. Analysts at Goldman Sachs broadly attribute this to costs, policies and, more importantly, buyer concerns around range and charging infrastructure.
This only cements our view that rapid charging is what will unlock the rest of the market.
It's particularly important in densely populated places like India and in most of south and southeast Asia. For many vehicle owners here, charging or even parking at home isn't really an option. (Even in a country like the US, an estimated 40%+ of vehicles are parked on the street.) And relying on current "fast" public chargers, which take an hour or two to charge the vehicle to full, is not good enough. For a petrol or diesel vehicle, this isn't a concern. Filling up a tank is a matter of minutes, not hours. Whether an autorickshaw or an SUV or a bus, range isn't something drivers even think about.
With a 100% charge in 10-15 minutes, an EV's "range" becomes effectively infinite. Just charge and keep driving.
And rapid charging doesn't just unlock entire markets for the vehicle side of the industry, it also radically changes the economics of charging networks. A rapid charger can charge way more vehicles in a day than a conventional "fast" charger. This means the rapid charger can sell more energy, which means it can charge less per unit of energy.
By charging many more vehicles, throughput improves and revenue can go up. This can help build out networks that are sustainable businesses—poorly maintained chargers because of poor economics are a big issue today.
Plus, with virtually unlimited range, OEMs won't have to compensate for customer anxiety. Rapid charging, then, also unlocks the option to go smaller on the battery.
Naturally, this has big cost implications. Lithium-ion battery prices have been dropping for years, but those gains have been slowing down as the technology matures. BloombergNEF's latest annual battery price survey put average EV cell costs at USD 139 per kilowatt-hour in 2023, and prices have been only reducing slowly over the past four years.
Imagine a car with, say, a 50 kWh battery and about 350 km of real-world range. With 15-minute charging, you can knock off 10 kWh and the range comes down to 280 km. But now you have no anxiety — and the OEM saves around $1,400 in battery costs, or around Rs 1.2 lakh. That can easily translate to a Rs 2 lakh reduction in sticker price.
Battery life:
Now we get to the second part of the formula for supercharging EV adoption: improving battery longevity.
A battery that lasts for 1,500+ cycles is not too bad. Especially with LFP cells, which don't age out even if they are not charged, batteries can last well upwards of 10 years in real-world use. Many carmakers, from Tesla to Tata Motors, warranty their passenger car batteries for at least 8 years, and the average owner's usage will have the vehicle running for much longer than that.
Potential customers may still be wary of lifetimes and resale value. The secondary market for EVs is still pretty small, after all. Buyers might still expect what they're used to with petrol/diesel vehicles, which can be driven for eight or nine years and then sold to someone who can use it for several years more.
And for commercial use, battery degradation is a much bigger concern. Taxis, three-wheelers, buses, and trucks run for many more kilometres, throughout the day.
That's something the cell and battery industry has been working on, with high-quality LFP batteries from major producers being rated for up to 5,000 cycles. For markets such as India and many other emerging markets, though, the fastest-charging, most innovative cells will take a long time to trickle down to mass-market vehicles at our price points. While cell manufacturers work on increasing the cycle life through cell innovation, auto companies need to innovate on how to manage a battery better through charging technology and unlock higher battery warranties.
Vehicles equipped with 3,000-plus-cycle batteries can last decades in the average Indian driver's usage.
This also has a knock-on effect of giving lenders the confidence to give better terms for vehicle financing. That's another win-win for vehicle buyers, with an outsized impact for commercial vehicles, where monthly financing costs are key.
On the whole, longer battery/vehicle life paired with truly fast charging will make electric vehicles — from autorickshaws to cars to buses — viable for a huge customer base that's currently left out. Killing the underlying problems that cause charging anxiety is the first step towards an all-electric future.
This feature was first published in Autocar Professional's July 15, 2024 issue.