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Price competitive electric vehicle with petroleum

By Sonny Atumah

The bane of mankind has been short term gains and would continue to be so. When Thomas Alva Edison (1847-1931) foretold that renewable energy and not oil was the future, he was misunderstood because of the cost outlay then.

The quest for innovation and the dependence on fossil fuels drove him to think about solutions in natural energy that was not exhaustive. He developed a suitable storage battery that could power what was the first electric car in 1912.

The system Edison developed in the auto industry was abandoned for the gasoline-powered internal combustion engine which cost was half the price of his electric car valued at between US$500 and US$750.

Edison’s reasoning for alternative to fossil fuel was not given a rational public thought. The perception was that a lot of revenue would be generated from petroleum tax. He was a key participant and front liner in global technological revolution that helped to build the American economy during its early vulnerable years.

His thought on oil and solar (renewable) energy in the 19th century was: “I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.” Indeed, as Edison predicted, global demand dynamics and geopolitics of oil reduction and availability of renewable energy is giving a policy shift to the electric vehicle that was not to be considered when Edison had the electric car breakthrough over a century ago. With the threats of carbon emissions from fossil fuels, more governments are now committing to fuel economy targets and fossil fuel car bans to meet their Paris Agreement commitments.

For now, it is still less expensive to produce petroleum based fuels. In the United States, two-thirds of the energy is consumed is in the form of petroleum-based fuel that is burned in automobiles, trucks, and aircraft (mostly as gasoline, diesel fuel, and jet fuel). To provide a viable energy alternative to petroleum-based fuels, synthetic fuels must be able to power internal combustion engines, ICE must be produced at the same expense or less expensively than petroleum.

Technology is playing a great role in reducing the cost of materials to produce synthetic fuels to make them more price-competitive with petroleum. With technology costs steadily decreasing, global renewable capacity additions is gaining momentum. The two big impediments that made EV expensive are being addressed through technological advancements. Batteries are becoming cheaper and more efficient to make the electric vehicle a viable option to ICE. For a long time, they were far more expensive than gas-powered cars, and restricted by tight range limits.

Last week, the ABB launched the world’s fastest electric vehicle charger at the  global industrial trade fair at Hannover Messe, in Germany. By operating at powers of up to 350 kilowatts and adding as much as 300 kilometers of range to an electric vehicle in just 12 minutes, its chargers has made electric cars more appealing for consumers by enabling them to refresh the batteries in about the same time required for filling up a petrol-powered car. With the incentives for producers and consumers, analysts believe EVs would make up more than a third of the auto market by the end of the next decade.

Electric vehicles have gained far more popularity than anyone anticipated, and growth will continue to accelerate more quickly than anyone thought, as well. Experts say EVs are cheaper (especially when you add in the fuel savings) and far more capable. The cost of a lithium-ion battery has fallen by roughly two-thirds in the past decade.

What Edison predicted then is manifesting, with car manufacturers now scrambling for dominance in the competitive electric-vehicle market.  On July 5, 2017, automaker Volvo announced changes from ICE vehicle to electric vehicle. Although the economic viability of the electric vehicle is still in doubt, Volvo Chief Executive Officer, Håkan Samuelsson announced the end of the solely combustion engine-powered car.”All new cars produced by Volvo from 2019 onwards will be partially or completely battery-powered.

Volvo makes over 500,000 cars every year, with every single one of them to be electric. VW is releasing 34 electric car models. Toyota, Honda, and GM are getting more electric every day with Ford scaling up electric production.

Nissan and its partner Renault are consolidating their early lead in the EV space. The alliance claimed 30 to 40 percent reductions in entry cost per model. In the alliance’ five-year plan Nissan-Renault plans to achieve a 30-percent decrease in battery costs by 2022, and produce a car with 600 kilometers (nearly 373 miles) of range by the same year. Nissan plans to sell 1 million battery-powered vehicles annually through the financial year ending March 2023.

Tesla Models sales have dominated the Leaf in the U.S. market last year. Experts view is that battery electric vehicles offer them increased efficiency and allows them to drive emissions-free. Falling battery costs and improved energy density will make applications more attractive over the coming years.


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