The Hurdles in the Race Towards Electric Mobility
What is the future of electricity-powered mobility? The electric car, usually a Battery Electric Vehicle (BEV), can be a solution to urban pollution and pressing climate constraints, since it releases zero emissions and has an energy efficiency per kilometer driven that is thrice that of a fossil-fueled vehicle. Even if certain objections could be raised in terms of the total emissions if the electric car is powered by electricity coming from fossil sources, displacing emissions from urban areas to less populated areas can be advantageous in itself, in terms of less social impact. Electric vehicles can be the way forward to enjoy eco-friendly mobility, when thy are integrated with the appropriate energy mix, with a rising weight accorded to renewables. In Italy, for instance, the weight of renewable energy sources on total production of electricity exceeded 40% in 2014.
Car Sharing and Smart Grid
The disrupting potential of electrical mobility is still hampered by barriers to entry that consumers usually deem insurmountable: asymmetric information, range anxiety and operation, total cost of ownership are the main hurdles. To overcome information asymmetries, namely consumers' unfamiliarity with these technologies resulting in widespread inability to correctly perceive costs and benefits, public campaigns to educated the citizenry are needed. As for range anxiety & operation, these refer to issues of energy autonomy and difficulty in refilling operations in comparison with gas-powered vehicles. While a major infrastructure of recharging facilities is clearly required, the obstacles are more psychological than real. Finally, total cost of ownership is not yet sufficiently competitive at this stage of battery technology, while low market penetration prevents the attainment of economies of scale in manufacturing. This component accounts for more than 30% of the cost of an Electric Vehicle (EV).
Investment in an asset such as an EV can be reduced in per capita terms, if the same is shared and through the search for innovative business models. The early cases of electrical car sharing in urban environments can spur efficiency and reduce information asymmetry. As for innovation, EVs can be used to support the smart grid, supplying users with opportunities that go beyond mobility: vehicle-to-grid systems, where EVs are used to store energy, can stabilize the grid and shave peaks in energy demand; behind-the-meter systems can be part of energy management to improve household consumption.
The transition to electrical mobility is breaking traditional competitive boundaries, giving a market opportunity to emerging players in the automotive sector, as well as ICT firms, electrical utilities etc, which can provide new services and products through hitherto unexplored business models. Success will depend on coopetition capabilities between various stakeholders, in order to push innovation in a direction that meets consumer needs and seizes the incentives that policymakers are providing to increase the scope of electrical mobility.