The recent announcement of the EV charging-focused joint venture between seven automakers was a watershed moment for the automotive industry. Clearly, automakers sense that to accelerate the EV transition, they have much to gain by taking a more active role in developing the charging infrastructure. But even as we cheer this development, the long-term solution needs a radical re-thinking away from today’s battery-centric model.
When they began manufacturing EVs, automakers focused on maximizing battery storage capacity to mitigate customers’ range anxiety and drive EV adoption. In a world where chargers were few and far between, that was the only viable strategy. However, that strategy comes with inherent limitations and hurdles. For example, a larger, heavier battery requires a beefier vehicle structure, which negatively affects range, which in turn requires a larger battery: a classic vicious spiral that eventually reduces the positive impact of EVs on broader global climate goals. Ford’s own CEO recently lamented that fact, based on observations of the ever-larger batteries being installed into light trucks.
Smaller, lighter batteries will make EVs more sustainable by reducing reliance on rare minerals like lithium. Smaller batteries will also make EVs cheaper. Currently, batteries account for 30-40% of the final cost of an EV, and the cost of acquiring an EV remains a significant obstacle to mass-scale EV adoption.
As charging stations proliferate, along with faster charging speeds, OEMs could initiate a virtuous cycle of lighter vehicles with smaller batteries. A radically dispersed and efficient EV charging infrastructure could even improve the charging experience for EV owners. Theoretically, there are few limits in terms of how far this could go. After all, electric trains have already taken the increased proliferation of “charging stations” and accelerating “speed of charge” to the logical conclusion, leveraging third rails and overhead lines to completely eliminate the battery.
Re-thinking Battery-centric EV Assumptions
As EVs were first coming into production, they inevitably absorbed some of the assumptions that guided the design of vehicles built around internal combustion engines. Customers were used to the driving range provided by 10–15-gallon gas tanks, so OEMs strived to develop batteries with an equivalent range. Customers were used to visiting gas pumps to fill those tanks, so plug-in chargers often mimicked the shape and feel of gas pumps. This is a natural part of the evolution of any new technology, not unlike when the first automobiles adopted boat-like tillers for steering.
But electricity isn’t gasoline. Gasoline is a tangible substance that needs to be physically extracted, refined, transported, stored, and transferred to a vehicle at a specific location. Electricity, on the other hand, offers almost infinite flexibility. It can be generated anywhere, in any amount, and it can be transferred to a vehicle continuously, with or without physical contact.
We should therefore be asking ourselves: Why constrain the electric mobility ecosystem to the significant limitations of gasoline-centric design? What would it look like to build an entire mobility ecosystem on electrical assumptions rather than petroleum assumptions?
What This All Means for EVs
EVs, unlike internal combustion engine (ICE) vehicles, can theoretically be charged anywhere — at home, on the road, stuck in traffic, and in the parking lot at the destination. In a “touchless charging” future, most charging may even occur without any active engagement from a customer whatsoever, leading to a user experience that is far superior to the manual experience of “charging” today’s ICE vehicles at a gas station.
Meanwhile, modular, distributed renewable power generation and storage — solar cells on the rooftops of shops, businesses, offices, libraries, etc., along with efficient storage of off-peak grid power — can promote rapid growth on the supply side. Retailers can offer free charging services as an incentive to increase foot traffic. A free EV charging perk might also help businesses encourage hybrid employees to spend more time in the office.
This begs another question: Could government incentives at some point be re-directed toward charge point installation rather than toward EV customers? Incentivizing retailers and small businesses to install modular generation-storage-charging might become the most effective way to reduce the overall cost of EV ownership and operation for consumers, while also minimizing the burden on our current infrastructure. This can become a true virtuous cycle. With charge points at most destinations (imagine the battery getting topped-up at every visit to every destination), customer range anxiety will be mitigated, allowing OEMs to pursue lighter, more affordable vehicles with smaller batteries. This, in turn, will increase the EV adoption rate, which will encourage more players to join the effort to make charging stations ubiquitous.
And the implications go beyond consumer vehicles. Last-mile transport is currently one of the biggest greenhouse gas contributors in the supply chain, even though individual last-mile delivery trucks clock relatively low mileage on a given day. If equipped with the right charging infrastructure, electric last-mile delivery trucks may require even smaller batteries than their consumer counterparts. Long-haul freight trucking across lightly populated rural expanses, of course, remains one of the more difficult puzzles of any EV mobility model. In such cases, fuel cells may turn out to be a more durable and sustainable solution than massive batteries.
The Road Forward
The challenge for EVs has always been the limits of the EV charging network itself and the implications of limited charging on the customer experience. As Ford found out (thanks to their CEO’s recent EV road trip), the weak link is not the vehicles but the charging infrastructure. On this front, we see three core focus areas:
- Standardization: As standardization is achieved in areas such as connectors, chargers, regulations, and payment integration, OEMs and ecosystem partners will be better equipped to explore innovations that will further improve the customer experience, like contactless charging and seamless, transparent, automatic electricity billing. Standardization will also encourage distributed renewable power generation and an expansion of rural microgrids, bringing the possibility of EV charging to many once-inhospitable geographies.
- EV charging business models: While OEMs can and will build their own charging stations, numerous other players will also seek to provide modular “Charge as a Service” offerings. In the long run, as they play alongside other charge network competitors, both auto OEMs and businesses that offer charging as a perk to their patrons will need to figure out if their EV charging operations are direct profit generators or if they are incentives/value adds for their customers. Gas stations have long used a similar logic to add convenience stores.
- Grid innovations: A fully mature EV charging ecosystem will require serious grid upgrades. OEMs will need to work with utilities, energy companies, and the public sector to ensure that the grid infrastructure can support the pace of automotive innovation. Among other things, this will entail peak load shaving (using smart grids to shift EV charging to off-peak hours), improved demand response, and two-way V2G (vehicle-to-grid) connectivity that allows EV owners to sell their energy back to the grid.
Thomas Edison recognized very early on that a functioning electric lightbulb would be just a small part of the larger electric lighting adoption curve. It was Edison’s effort in developing the entire power generation and transmission capability that led to exponential adoption of the incandescent bulb. Similarly, an EV battery does not exist in isolation. The speed and scale of EV adoption will be shaped by the re-thinking of the charging ecosystem.
At first, the impacts of charging network expansion on required battery capacity and vehicle range may happen gradually. But OEMs need to be prepared for a coming year during which customer needs will flip almost instantaneously. A light vehicle with a small battery and low range may seems like an unattractive business proposition in 2029 yet may be a perfectly viable product in 2030. Once the inflection point arrives, automakers need to be ready to rapidly shift their vehicle and battery design assumptions toward right sizing.
