Colin McKerracher manages coverage of the transport sector at BloombergNEF. His team analyses the policy, technology and economic factors shaping the future of road transport. Main areas of coverage include electric vehicles, batteries, charging infrastructure, shared mobility, autonomous driving and energy market impacts.
We had the opportunity to ask Colin a few questions on the electric and smarter mobility industry before Smarter Mobility World 2020. See what he had to say:
SMW: How do you think the electric and smarter mobility industry in your region will perform in the next 1 - 5 years?
CM: Europe will be one of the strongest regions for growth in e-mobility over the next 5 years. The combination of tightening vehicle efficiency regulations, urban air quality concerns, investments in charging infrastructure, growing model choice and rising consumer awareness will help push the market into the mainstream. We’re expecting EV sales in the region to almost double in 2020 and hit 5-7% of sales in 2021.
SMW: What are the top burning electric and smarter mobility challenges faced by manufacturers and consumers?
CM: For manufacturers, the challenges are all around how to navigate this bridge period between internal combustion vehicles and electric ones. The direction of travel is now clear, but each automaker has a different starting position and different constraints. All of them are having to make very large investments but still face uncertain demand in many markets. This is compounded by falling overall auto sales and other large capital requirements like investments in autonomy and shared mobility. This is a difficult transition to manage and I think you’ll see further consolidation in the years ahead.
SMW: What are the key trends in your region that drive the electric and smarter mobility industry?
CM: On e-mobility it’s all about policy pressure and technology improvements.
European vehicle CO2 regulations are forcing automaker to ramp up their EV efforts. Most automakers are not on track to meet the targets set for 2020 and 2021 so they need to sell more EVs to avoid paying billions in fines and also prepare for the even tighter regulations in 2025 and 2030. More national governments are also passing long-term internal combustion vehicle phase out targets. There are currently 14 countries and 30 cities/regions with such targets globally. Most are aiming for around 2040, but there are a few aiming for 2025-35. While many of these are still aspirational and lack firm legal backing, they are sending a clear signal to the market.
On the technology side, lithium-ion batteries are still getting better and cheaper. Average energy densities are improving at around 5% per year, while prices have fallen 87% from 2010 to 2019. That’s a remarkable change, and it doesn’t stop here. We’re expecting average battery pack prices to fall below $100/kWh around 2024, but some manufacturers will get there sooner. That’s forcing automakers to rethink how quickly they roll out EV options across their model range.
SMW: The top 3 themes you will share/have shared at the seminar/conference?
- Lithium-ion batteries are still getting better, which means EVs will keep getting better. We see room for significant further cost reductions and density improvements in the years ahead.
- The EV market has reached ‘the end of the beginning’. The 2020s will see several killer apps for e-mobility emerge and scale increase rapidly, but there will be bumps in the road.
- Charging infrastructure is improving quickly, but still not fully solved. There are thousands of public charging points being built, but networks and business models are still fragmented. Many people can charge at home, but getting public charging right will require collaboration across different stakeholders.
SMW: Forecasts and predictions for the year ahead?
CM: I think 2020 will be a very big year for EV sales in Europe. China has been leading the race for the last 3 years, but watch for the gap between Europe and China to narrow significantly this year.