A Viable Business Proposition for Electric

Vehicle Battery
2011
1
ABSTRACT
The Automotive Industry is a large and critical sector within the UK economy. It accounts
for nearly half a million jobs, and exports nished manufactured goods worth 8.9bn
annually, which represents one eighth of the value of all manufacturing exports from the
UK. The Industry has witnessed a downturn in recent times with markets like China and
India prevailing in the sector. The signicant amount of revenue that is generated by this
sector cannot be ignored and therefore corrective measures need to be taken.
The increasing environmental reforms by the EU countries is a factor that can drive the UK
automotive Industry. However the major challenges for the sector are presented by less
efcient batteries that do not allow the EV sector to spread its wings in the horizon. The
following report will focus on the particular area of the sector and a business proposition
will be derived. The factors that will be considered during the process will the 6 PESTEL
factors that will help us derive the key trends prevailing in the market, on the basis of
which a viable business proposition will be formulated.
2
TABLE OF CONTENTS
1. Introduction
1.1 Scope! ! ! ! ! ! ! ! ! !
1.2 Product Detail! ! ! ! ! ! ! ! !
1.3 Automotive Sector! ! ! ! ! ! ! ! !
1.4 UK Market Size and Growth
1.5 Key Competitors
2. Trend 1: Political Itinerary
2.1 Government Measures
2.2 Infrastructure Development
2.3 Research and Development
2.4 Overview
3. Trend 2: Economic Viability
3.1 Perspective
3.2 Incentive, Tax
3.3 Business Opportunities
4. Trend 3: Greener Environment
4.1 CO2 Emission
4.2 UK Environmental Agenda
5. Trend 4: Technological Aspects
5.1 Technological Roadmap
5.2 Current Scenario
5.3 Challenges
6. Conclusion
6.1 Opportunities
6.2 Threats
6.3 Recommendations
7. Appendices
8. References
3
1. INTRODUCTION
1.1 Scope
The objective of this report is to analyze the scope of Electric Vehicle (EV) Battery in UK
market that will extend the range of electric cars between charges from about 100 miles to
500 miles considering four main trends that are most likely to affect the EV Battery market
in the next ve years. These trends are derived from the PESTLE analysis of the market.
The report will also highlight the possible opportunities and threats that may or may not
arise from these trends and some recommendation for new entrants. The information was
obtained from various sources like, Department for Transport, Department for Business
Innovation and Skills (BIS), New Automotive Innovation and Growth Team (NAIGT), The
Society of Motor Manufacturers and Traders (SMMT), Mintel, Datamonitor, BBC, Gardian,
conference reports, government reports and reliable websites.
1.2 Product Detail
Electric Batteries in EV cars are used as an alternative power source to fossil fuels. The
most common current EV battery types around are lithium-ion (Li-ion) based with different
types of additional cathode additives which improve attributes like energy density, power
density and battery. Other alternatives such as nickel metal hydride and sodium nickel
chloride are also commercially available, with lithium-air, lithium-sulphur, zinc-air and
bipolar lead-acid providing cheap and long-term solutions (The Royal Academy of
Engineering, 2010). The table 1.2.1 below shows the available batteries in the market
(BEER, 2008).
Table 1.2.1 Battery Types Available in the Market
4
BERR & DfT nvestigation into the Scope for the Transport Sector to Switch to Electric Vehicles and Plug-in Hybrid
Vehicles
!"! #$%&'%(')*+%,,)-.*/)0123'34&)5
The table below summarises comparative performance, price and safety issues for potential
and actual vehicle batteries presented at a 2007 industry forum. A column for
supercapacitors is included for comparison
27
.
Li-ion Li-M-
PoIymer
NiMH Na-NiCI2
(Zebra)
Lead-
Acid
SC
28
Energy
density
(Wh/kg)
75-120 100-120 50-70 100-120 20-30 3-4
Power
density
(W/kg)
1,000-3,0
00
200-250 1,000-1,500 180 200-500 1,000-3,0
00
Cost
($/kWh)
1,000-2,0
00
? 1,000 600 100-200 15,000
Lifetime
(cycIes,
100%
DoD
29
)
1,000-3,0
00
? 2,000 1,000 300-800
(VRLA
30
)
500k-1m
Issues Safety,
cost
No
commercial
product
Temperature
limitations
Single
supplier
Lifecycle
issues
The figure below shows a view of the challenge provided by the energy storage capabilities
of various technologies in relation to the requirements of EVs
31
. t illustrates that currently
available batteries tend to be optimised either for high power (HEV) or high energy (EV)
application.
27
Shanghai Challenge Bibendum, Round Table 2, Batteries and Supercapacitors, November 2007. Based on a 20kWh EV battery
pack and a 100Wh supercapacitor. By comparison, the potential energy density of gasoline is around 12,000 Wh/kg, and that of
hydrogen 33,000 Wh/kg.
28
SC supercapacitor.
29
DoD depth of discharge.
30
VRLA valve-regulated lead acid battery.
31
Courtesy of Ricardo.
Page 30
1.3 Automotive Sector in UK
UK is the fourth largest automotive manufacturer in Europe, manufacturing one million
vehicles in 2009 according to the gures published by the Society of Motor Manufacturers
and Traders (SMMT, 2010). Vehicle manufacturing of the UK automotive sector contributes
almost 11 per cent of total UK exports i.e. 26.6 billion a year, with over 70% of
commercial vehicles being exported (Cooke, 2009). Conventional automotive
manufacturing has all been majorly shifted to east and is quite unlikely to return.The future
for the UK automotive industry lies in innovation and therefore is likely to be based on the
development and exploitation of new and emerging technologies able to deal with
environmental issues like CO2 emissions and the growth of new power sources and
vehicle concepts. However this has been realized by the government and an incentive of
300 million has been announced by the government to conduct infrastructure
development and consumer incentives for EVs (NAIGT, 2009).
1.4 UK Market Size and Growth
5
Where the Industry psychiatrists debates on which virtuous technology will emerge as
market leader by 2020, the car makers continue to explore for the ways to reduce
emissions at an affordable price tocustomers. According to Nissan, which is investing
heavily in its pure-electric Nissan Leaf, bullishly forecasts pure EVs will take a 10% market
share by 2020 across the globe (Guardian, 2011). With a 50 billion Automotive Industry,
study suggests that the total sales of 55 EVs constitutes to 1.5 million share of the UK
automotive market in 2009 perhaps the least during a span of four years (SMMT, 2010).
Similarly, the trends during 2006 to 2009 in Figure 1.10 suggest that the EV market hasn't
shown any positive indicators to drive the sector rather, there has been witnessed a
gradual decline in the buying behaviors of consumers for EVs (SMMT, 2010).
Fig 1.4.1 Number of EVs, VS Corresponding Years
1.5 Key Competitors
The performance of EVs in the main stream market has got a direct relationship with the
power capacity of a battery to keep them running on the roads. On a global scale Japan is
likely to continue to play a leading role in the manufacturing of batteries for hybrid vehicles,
while China, Korea and Japan are also likely to be the signicant suppliers of electric
vehicle batteries. However, Axeon a UK based company is the leading supplier in Europe
of customized advanced lithium-ion battery packs and charging systems for automotives,
with its core business in developing and supplying batteries for use in electric and hybrid
electric vehicles (EnergySourceguides.com). Table 1.11 show the names of some of the
car battery manufacturers and businesses currently operating in UK.
Trend EVs
0
100
200
300
400
2006 2007 2008 2009
6
Table 1.5.1: EVs Manufacturers and Business in UK Table 1.5.1: EVs Manufacturers and Business in UK Table 1.5.1: EVs Manufacturers and Business in UK Table 1.5.1: EVs Manufacturers and Business in UK
No. Company Name Manufacture Business
1 Axeon * *
2 SEC Industrial Battery Company * *
3 A B International *
4 All Rite Batteries & Chargers * *
5 D & A Electric Vehicles Limited * *
6 Hardware Express. co. uk *
7 John Mason (Batteries) Ltd *
8 Manbat Limited * *
9 Power-Sonic Europe Limited * *
10 Squadron Battery Company
Limited
*
11 Ultracell (UK) Limited * *
12 Uniross Batteries Ltd * *
According to a study, from now to the year 2015 / 2020 there is a predicted gradual decline
in the battery prices across the globe. Roger Berger in their report suggest that such a
scenario if developed may increase the market share of EVs on an aggressive pace. They
suggest that to develop such a situation requires high level of research and development
(R&D) and capital expenditure. According to the report 50 to 100 million for new cell
chemistry and 300 million in 100k unit plant is a rough estimate of capital required in
R&D. This will result in only six to eight global manufacturers to survive in next ve to
seven years, with a revenue generation of 550 million. The report also suggest that for
making survival the western governments need to act in order to avoid loosing future
technologies to Asia. The battery suppliers should design a foolproof strategy to gain
market shares as quick as possible and the investors should be aware of massive
investment risks (Powertrain 2020, 2010). Figure 1.5.2 suggests the market situation if the
above mentioned measures are well executed.
Fig 1.5.2: Increase share of EV, in case of massive cost reduction in Battery Prices
7
I d h f HEV/PHEV d EV i d i b i Increased share of HEV/PHEV and EV is driven by massive
battery cost reductions in the next 10 years
Potential cost progression of high energy battery cells [EUR/kWh]
COST REDUCTION
475
KEY POINTS
> Cost improvements will cause market volumes to rise
substantially, further improving EV battery cost structure:
- Internal economies of scale
COST REDUCTION
ENABLERS
300
- Material supplier economies of scale/new
entrants
> Significant advances in technology are required and are
expected to be facilitated by substantial R&D
200
investments:
- Design changes to remove components and
increase energy density
- Chemistry changes up to EUR 100 m invest for
h i t
2010 2015 2020
new chemistry
> Large capital investments into efficient, cutting edge
manufacturing infrastructures is necessary: approx EUR
350 m for 100,000 unit EV equivalent plant
5
Roland Berger Strategy Consultants 2010
Source: Interviews, Roland Berger
HIGH CAPITAL REQUIREMENTS DRIVE THE NEED FOR SCALE


8
2. Trends - 1 Political Itinerary
2.1 Government Measures
In order to deal with the demand and increasing challenges of the UK automotive industry
government along with the establishments must realize the situation as soon as possible
and need to take some persistent and corrective measures to tackle these problems.
However the government is quite likely to take the matter seriously and has already taken
some signicant measures to critically evaluate and tackle the situation. The government
has devised some major plans which include the formation of New Automotive Innovation
and Growth Team (NAIGT) partners with The Society of Motor Manufacturers and Traders
(SMMT) and Department for Business Innovation and Skills (BIS). The Business Minister
Mark Prisk says, The Coalition Government is absolutely committed to low carbon growth,
tackling climate change and making our energy supply more secure and this exhibition
highlights UK success as advanced manufacturers of low carbon vehicles (BIS, 2011).
2.2 Infrastructure Development
The government has also realized the fact that UK can never persist with there plans for
EV industry until or unless they do not devise the basis for EVs running on the streets of
UK. Therefore the government has announced an incentive of up to 10 million for the
rapid deployment of electric vehicle charging infrastructure in the UK and the
establishment of a cross-Whitehall Ofce for Low Emission Vehicles (OLEV) that will drive
policy delivery. This will support infrastructure in a number of UK cities and will build on the
previously announced 20 million to tackle barriers in electric vehicle charging
infrastructure through the Plugged in Places electric vehicle infrastructure framework. It
will also complement the 230 million already announced to reduce the price to consumers
of electric and plug-in hybrid cars from 2011(BIS, 2009).
2.3 Research and Development
9
In the interest of long run development of the sector one of the devised plans of the
government is willing to continue the work with partners such as the Energy Technologies
Institute (ETI). The ETI has devised a Plug-in Vehicle Economics and Infrastructure
project, worth up to 3 million. Other projects like one under the Technology Strategy
Boards 25 million Low Carbon Vehicle Demonstrator program, which is part of the
Innovation Platform, is the biggest trial of its kind in the world, is also in the pipeline. This is
considered as a critical rst step in helping position the UK as a major force in the
development and understanding of the potential market for EVs (BIS, 2009).
2.3 Overview
In total, The government has announced direct investment of over 400 million for the
development of EVs in Britain. This does not include the Automotive Assistance
Programme, which came into effect in February 2009. The scheme aims to unlock total
bank and European Investment Bank support of up to 2.3 billion to provide support for
automotive companies as they invest to create or sustain jobs, develop new technology,
bring special value to the UK, maintain R&D in UK vehicle manufacturing and support the
development of green technologies (BIS, 2009). Though these measures directly focuses
on the establishment of EV sector, however all the investment will prove to be viable for
the relative businesses associated with the EV market.
10
3. Trends - 2 Economic Viability
3.1 Perspective
The recession has brought a huge economic down turn in the world. This has not effected
the people only, in-fact has changed the pictorial view of the whole world. The recession,
where it has effected the lifestyle, consumer behavior and social behavior has also
affected the purchasing power parity of an individual. The government and establishments
realizing the situation are offering quite handsome incentives to the investors and buyers
in UK. Development of EV sector can cause economy to drag itself out of recession and
becoming market leader is what is a viable possibility, has become the an aim.
3.2 Incentive, Tax
Considering the development of EV market and to encourage the sector government has
devised an incentive of offering a subsidy of 25% on the cost of an eligible electric car that
has a value up to 5,000. The subsidy is available from the Ofce for Low Emission
Vehicles Plug-In Car Grant. The scal policy also includes tax incentives for the use of
electric vehicles. These incentives include Vehicle Excise Duty exemption, Fuel Duty
exemption, Enhanced capital allowances and No Company Car Tax. However, local level
incentives currently targeted to few areas are also formulated to encourage the use of
ultra-low emission cars. These incitements include, free or subsidized parking, free
electricity from public recharging infrastructure and 100% discount from the Congestion
Charge. The government has also offered an exemption on Pure-EVs for paying Vehicle
Excise Duty and has entitled to register Pure-EVs for a 100% discount from the
Congestion Charge (Electric Car Guide, 2010). Table 3.2 shows the additional savings
available for pure EVs.
11
Fig 3.2.1: Additional savings available for pure EVs Fig 3.2.1: Additional savings available for pure EVs Fig 3.2.1: Additional savings available for pure EVs Fig 3.2.1: Additional savings available for pure EVs
Potential
additional
savings for pure
EVs
Company
Saving
Driver Saving Notes
Company Car
Class 1A NIC
973 Over three years
at current rate
Free Fuel Class
1A NIC
899 Over three years
at current rate
Company Car
Fuel Tax
1521
3042
20% Tax Payer
40% Tax Payer
Company Car
Fuel Tax
1404
2808
20% Tax Payer
40% Tax Payer
Congestion
Charge
5100 Over three years
at 1700 p.a.
Free Parking Total saving
depends on
location
3.3 Business Opportunities
According to the Electric Car Guide published by the Society of Motor manufacturers and
Traders in 2010, there is a plenty of growth in the EV sector. In their opinion EV sector is a
growing market with high potential new elements in the value chain. There are various
business viabilities which include vehicles, components, infrastructure road maping,
utilities, renewable energy generation, telematics, system networking, back ofce support,
retailing, services and parts. In addition SMMT suggest that UK is at the frontline of EV
industry development and this is due to, extensive nationwide EV pilot trials and many
world class EV technologies have been demonstrated in the UK. According to the report
many British EV products and services are attracting international demand with a
signicant amount of investment being committed by major manufacturers producing and
selling EVs in the UK. This high frequency of activity has not just increased the rate of
progress in the UK industry but has also doubled a number of investment opportunities.
EV sector with such potential weigh a lot for the development of EV battery and
components.
12
4. Trends - 3 Greener Environment
4.1 CO
2
Emission
European countries have constrained themselves within the boundaries of total amount of
CO2 produced from the energy sources (EU Emissions Trading Scheme, 2009) and these
European countries are constantly shrinking these boundaries year by year to collectively
achieve an overall reduction of the harmful gas. This constitutes that if the overall energy
demand increases due to an uplift in the EV Sector then this increase is to be supplied by
the electricity generation from renewable or sources that generates zero carbon emission
(SMMT, 2011). A Legislation passed in the year 2008 has demanded the European vehicle
manufacturers to reduce new car average CO2 emissions to 130g/km by 2015. In addition
a target of 10g/km must be achieved by the inclusion of complementary measures like
alternative fuels, smarter driving technologies and lower rolling resistance tires. However
the Manufacturers who fail to reach the targets will be heavily ned per additional gram of
CO2 emitted, for every car registered across Europe (Motor Industry Facts, 2010). A report
by SMMT also suggest that the only top two cars that have generated zero CO2 emissions
are Smart Fortwo and Tesla both are EVs.
4.2 UK Environmental Agenda
According to a report Low Carbon Transport: A Greener Future published by the
Department of Transport in 2009, British government is quite keen to curtail CO2 emission
in the environment by the year 2020 and eradicate the element from the ecosystem by
2050. The government has devised a plan focusing almost all the aspects of the value
chain that exist in the EV sector. Lord Andrew Adonis says, Putting Britain on the path to a
low carbon future is one of my key tasks as Transport Secretary. We all know that good
transport systems and services are fundamental to our economy and our quality of life. We
have also long recognised that transport has adverse impacts on the environment.
Avoiding dangerous climate change means we must act, both in the UK and
internationally, to reduce greenhouse gas emissions from transport (Low Carbon
13
Transport: A Greener Future, 2009). In the forewords he also suggest that building a
greener future means that low carbon travel must be a genuine, viable and attractive
option for businesses and ordinary citizens. A report by the Committee on Climate Change
suggests that the change over this period of 10 to 15 years will be modest however, the
benet is cumulative. The Committee also believe that in order to achieve carbon
reduction target by 2030 a massive uptake of EVs is necessary. Though EVs alone cannot
address the issue on its own but an increased uptake of EVs maybe an important step to
help meet UK carbon reduction targets. Figure 4.1.2 is a graphical representation of
Average new car CO2 emission from the year 1998 to 2009.
Fig 4.1.1: Average New Car CO2 Emissions
2
98 99 00 01 02 03 04 05 06 07 08 09
190
185
180
175
170
165
160
155
150
145
140
g
/
k
m
Fig 4.1.1 Average New Car CO2 Emission, VS Corresponding Years
14
5. Trends - 4 Technological Aspect
5.1 Technological Roadmap
The EV technology is not new, it has been known to the world since mid eighteenth
century. However we have witnessed that the advancement in some particular area has
been unjust whereas in some areas it is unrestrained. In a typical case of batteries
performance the contrast is quite visible, the electronics has increased by 10,000% in the
past 35 years whereas, battery technology has lagged behind with an increase of just six-
fold in a century (Gardian, 2010).
5.4 Current Scenario
Battery manufacturing and supplying companies like Axeon is currently producing batteries
in big volume for two of the UK's leading electric vehicle suppliers, Allied Vehicles and
Modec. A specially designed battery system the largest ever for a passenger car is
produced by Axeon that is powering 102EX, the Rolls Royce Phantom Experimental
Electric. According to the Electric Car Guide 2010, Currently battery life is assumed to be
over when the battery capacity drops to 80% of its rated capacity. However, batteries can
still deliver usable power below 80% charge capacity to run a car, although they will
produce shorter range (Axeon.com). This means that if your original battery has a range of
100 miles on a full charge, after eight to ten years depending on the usage of the vehicle
the range may reduce to 80 miles. However a number of vehicle manufacturers claim that
they have designed the batteries to last the lifetime of the car.
5.3 Challenges
According to David Raistrick the automotive partner and head of manufacturing at Deloitte
UK, assumes that there is no doubt that electric vehicles are the future of the automotive
industry. However while the consumer interest in electric vehicles is growing, the current
market offering is falling far short of consumer expected driving range, charging time, and
purchase price. In addition Craig Gif, Deloitte global automotive sector leader, says that
as a result of this downturn we may estimate only one to two per cent of these potential
15
consumers actually adopting battery electric vehicles by 2020 (Engineering and
Technology Magazine, 2011). During the Electric Vehicles International Experts meeting
(Oct 2008) the UK Department of Transport, recognized that there is an urgent need to
nd ways of addressing major hurdles such ascost of batteries, their range and the
development of recharging infrastructure.During the meeting department announced the
governments intention to fund the Technology Strategy Board which will provide up to
20million for electric and other low-carbon and hybrid car research and development
projects.
16
6. Conclusion
6.1 Opportunities
It is an undeniable fact that UK being a part of EU is in a continuos serge of exploring the
market along with the other EU nations. This makes them vigilant and accepting to any
change that might prevail in the market. The competitive environment in Europe keep the
brains running and any place for improvement might be explored. Non of the battery
manufacturers have yet came up with battery that could allow the vehicles to run for longer
duration, nor any signicant speculation prevails in the market, therefore the any
breakthrough by anyone can make them market leaders. The takeover on the fossil fuel
running vehicle market is also an opportunity. The government interest in the sector is also
open the doors for investors to invest in the business.
6.2 Threats
Manufacturing of batteries is a capital intensive business, it requires highly skilled labour
that in UK is very expensive. Economies Like China and India are also in continuous strive
to take vibrant actions, therefore their existence cannot be ignored. The government
though has announced incentives for the sector but there are no particular incentives
which entirely focuses on this viability of Value Chain. The sector as a whole also cannot
camouage the existence of hybrid electric cars. They are rather more efcient in the long
range running for green cars. There is always a possibility for the predictions to go wrong
and one cannot deny the fact that the proposition for business in the sector has been
developed on the basis of predictions which are rather quite optimistic.
6.3 Recommendations
As the EV sector is growing on a high pace there is a constant opening and closing of
opportunities one can exploit. However in the case of EV Battery Manufacturing and
supply there exist a range of possible opportunities which can be explored. As we have
researched and discussed in the report the market offers a wide range of opportunities for
17
investors to invest in this particular sector. There is a lot of room for new entrants to
prevail. The threats however are there which have to be kept in consideration. It is still a
market which has not shown any real intent for boom. The investors must realize that there
is always a risk in big investments. The government though has offered a lot of incentives,
but there are no incentives particularly focussing this sector of the value chain. The
business viability of course in exist, but the nature of business require immediate action as
there are a lot of companies in constant urge of a technological breakthrough.
18
7. Appendix
PESTEL Analysis PESTEL Analysis
Political

Government is offering a lot if incentives

for the Sector to grow.

There is a sense of Urgency in the

government reforms.

New teams and departments have been

formulated to study the activities in the
sector.

Short term and long term plans have

been devised by the government funded
teams.
Economical

A scal and monetary policy has be

devised.

Major investments have been made for

the development of infrastructure and for
buyers and businesses in monetary
terms.
Social
Technological

Investments have be made by the

government to promote R&D in the
sector.

Room for technological advancement

exist.
Environmental

Reduction of CO2 emission is a

challenge.

Consumer awareness programs have

been devised.

Goals are set to overcome the CO2

Emission.
Legal

Environmental goals if not achieved the

respective countries will be legally bound
to pay penalty.
19
PHEV d EV i i i t f 1 2 i hi l i PHEV and EV in main regions account for 1,2 mio vehicles in
2015 LiIon battery demand for 0,82 mio "EV equivalents"
xEV vehicles in major markets in 2015 (High scenario) and resulting LiIon battery demand
Vehicles in Western Europe, Japan, US, China
LiIon battery demand
2%
3%
3%
Mio veh
0,82 mio units EV equivalent
1%
0%
3%
Full
Mild
ICE (None + Mirco) 46,1
1,3
1,6
Mio veh.
0,32
0,38
Europe
US
92%
EV
PHEV (parallel)
PHEV (serial) 0,8
0,1
0,3
0 10
0 03
Japan
China
92%
0,10
0,03
Assumptions:
EV: 25 kWh
PHEV: 12,5 kWh
F ll H b id 2 5 kWh
6
Roland Berger Strategy Consultants 2010 Source: Roland Berger
Full Hybrid: 2,5 kWh
Mild Hybrid: 1,25 kWh
EV/PHEV: LiIon batteries
Full/Mild Hybrid: 65% NiMh / 35% LiIon batteries in 2015
D d f LiI b tt i ill f th i i ifi tl Demand for LiIon batteries will further increase significantly
until 2020 - 3 mio unit "EV equivalent" not reached before 2018
LiIon battery demand in "EV equivalents" in major regions
1)
2015 2020 [units]
0,1
4 4
0,2
6,0
Full
Mild
0 1
3,0
0,1
0,1
2,1
4,4
2,8
0 2
PHEV (parallel)
EV
PHEV (serial)
0 1
1,3
0,1
1,0
2,0
0,1
0,0
0 0
0,1
1,4
0,1
0 8
2,1
0,1
0,2
2,8
0,0
0,1
0,6
0,3
0,0
0,0
0,5
0,1
0,8
,
1,3
2015
0,1
2016
0,4
2017
0,0
2018
0,8
2,0
2019 2020
7
Roland Berger Strategy Consultants 2010 Source: Roland Berger
1) Europe, Japan, US, China
20
BERR & DfT nvestigation into the Scope for the Transport Sector to Switch to Electric Vehicles and Plug-in Hybrid
Vehicles
!"# $%&'%(
The table below provides a summary of the analysis based on 2020 figures, based on
findings in Sections 3.1 to 3.4. Further information on the methodology used and analysis
are provided in Appendix A.
Summary of studied potentiaI environmentaI impacts by vehicIe type (assuming a
Grid mix for 2020) for a singIe vehicIe over vehicIe Iife (180,000km)
EnvironmentaI
Impact
EV ICV
18
Units Context
Climate change 11,656 24,650 kg CO2e
! The EV has less than half the impact of the
CV in 2020.
! The EV result is dependent on the
proportion of renewables and nuclear
supplying the National Grid, which will
increase in line with Government policy.
Air acidification 56.2 44.8
kg SO2
eq.
! CV emissions occur at the tailpipe,
potentially in more sensitive environments
such as urban areas. By contrast, EV
emissions occur at power stations supplying
the Grid (particularly coal) which are
generally in out-of-town locations.
! 23% of the EV impact occurs outside the UK
due to extraction of materials for battery
production; therefore the potential impact in
the UK is comparable for the EV and CV.
Photochemical
oxidant formation
3.6 7.4
kg
ethene
eq.
! EV has about half the potential impact of the
CV. The CV impact is mainly due to petrol,
which has almost twice the impact of diesel
due to emissions of carbon monoxide and
non-methane VOCs.
! A proportion of the CV emissions will occur
in more sensitive environments, such as
urban centres. EV emissions occur mainly
at power stations in out-of-town locations.
Non-renewable
resource
depletion
76.9 161.0
Kg Sb
eq.
! The EV impact is significantly less due to
reliance on more abundant resources (coal
and gas supplying the Grid) in comparison
with oil supplying fuels for the CV.
! EV impact will continue to decline with
greater use of renewables supplying the
Grid.
Water use 34,306 1,541 Litres
! The EV requires substantially more water
consumption than the CV. One-third of this
water use is due to refining of lithium salts
outside the UK.
! The remainder is due to water losses eg
from cooling towers, at power stations
!"
#CV figure calculated as 50% petrol and 50% diesel, based on tables provided in Appendix A.
Page 26
21
BERR & DfT nvestigation into the Scope for the Transport Sector to Switch to Electric Vehicles and Plug-in Hybrid
Vehicles
supplying the Grid. This arises from the
extra 1% or less of electricity required from
the Grid to charge EVs, which is negligible in
comparison with electricity generation to
meet all other needs.
! EV in-use water demand equates to about
8% of an individual's potable water demand
in the same period.
Waste
generation
19
57.6 0.7 kg
! 86% of EV waste generation arises from
extraction of materials for the batteries,
outside the UK.
! n-use waste generation for the EV comes
from the nuclear contribution to the Grid.
! Over 99% of waste is overburden, which is
material that is temporarily moved at mines.
This is not reflected in these figures.
Aquatic Eco-
toxicity
(freshwater)
33.7 40.5
kg DCB
eq.
! 79% of the EV impact arises from
extraction of materials for the batteries,
outside the UK.
! EV in-use impact is markedly lower than for
the CV (18%).
Eutrophication 2.7 5.7
kg PO4
eq.
! EV impact is less than half that of the CV.
! >80% of the EV impact is in the UK.
Human health 1261 721
kg
DCB
20
eq.
! >50% of the EV impact is due to extraction
of materials for the battery outside the UK.
! Emissions contributing to the human health
impact for the EV in-use are roughly half the
in-use impact of the CV.
! Some CV emissions occur at the tailpipe
(43% combined) and may therefore be
emitted in more sensitive environments eg
urban areas. n-use EV emissions occur at
power stations mainly located away from
urban centres.
Noise
68.8-6
8.2
75.6-7
1.4
dB(A)
! Results are for a van the EV provides a
"distinct noise advantage.
! EV drivers will need to become accustomed
to high speeds without significantly
increased engine noise. Pedestrians and
other road users will need to become
accustomed to quieter vehicles.
!"
#Without overburden (material temporarily set aside during mining operations)
$%
#dichlorobenzene
Page 27
22
BERR & DfT nvestigation into the Scope for the Transport Sector to Switch to Electric Vehicles and Plug-in Hybrid
Vehicles


Ricardo plc 2006
Although NiMH batteries currently dominate the HEV market, with Toyota recently having
exceeded 1m hybrid vehicle sales worldwide using this battery chemistry, there is a growing
consensus that Li-ion batteries offer the most promising combination of energy storage
capacity with power. While new models due to be launched in 2009 such as the next
version of the Toyota Prius and a new Honda hybrid will still use NiMH, subsequent
discussion will focus on Li-ion technology.
!"# $%&'%()*%+,-./&&012-304',+5+62-7-8,&1+9(4&%+,
Li-ion batteries have part of their origin in research in the UK. n the 1970s John
Goodenough (now at University of Texas) was working in the Electrochemistry Laboratory at
the University of Oxford, when he made crucial discoveries on Li ion conduction in Li1-xCoO2
and Li1-xNiO2 that led to a key patent on the use of these oxides as intercalating cathodes in
batteries. The work was sponsored by the UKAEA at Harwell who were collaborators in the
research. Their successor, AEA Technology PLC, held the right to license the technology in
the 1990s and was later involved in the development of the Li-polymer battery with Sony
and the construction of the AGM battery plant in Scotland
32
. t is instructive that Dr
Goodenough struggled to find backing for the commercialisation of his technology in the
West
33
.
32
J. Matthews, UK Advanced Battery Capabilities, UKT nternal Report.
33
Factors Affecting U.S. Production Decisions: Why are There No Volume Lithium-on Battery Manufacturers in the United States?
R. J. Brodd!"prepared for NST!"June 2005. http://www.atp.nist.gov/eao/wp05-01/wp05-01.pdf.
Page 31
Rank Model Fuel type CO2g/km
1 smart fortwo Electric 0
1 Tesla Electric 0
3 smart fortwo Diesel 88
4 Toyota Prius Petrol/Electric 89
5 Ford Fiesta Diesel 98
5 Seat Ibiza Diesel 98
7 Peugeot 207 Diesel 99
7 Toyota iQ Petrol 99
7 VW Golf Diesel 99
7 VW Polo Diesel 99
7 Volvo C30 Diesel 99
Lowest emissions Change in average new car CO
2
by segment
T
o
p

t
e
n

m
o
d
e
l
s
-
6
.
7
%
-
4
.
2
%
-
4
.
1
%
-
4
.
1
%
-
4
.
7
%
-
6
.
0
%
-
6
.
3
%
-
5
.
5
%
-
3
.
3
%
M
i
n
i
L
o
w
e
r

m
e
d
i
u
m
U
p
p
e
r

m
e
d
i
u
m
E
x
e
c
u
t
i
v
e
S
p
e
c
i
a
l
i
s
t

s
p
o
r
t
s
S
u
p
e
r
m
i
n
i
% ch 2008 % ch 1997
L
u
x
u
r
y
D
u
a
l

p
u
r
p
o
s
e

4
x
4
M
P
V
-
2
1
.
6
%
-
1
7
.
8
%
-
1
9
.
7
%
-
2
1
.
8
%
-
2
4
.
9
%
-
2
1
.
7
%
-
8
.
5
%
-
2
7
.
4
%
-
2
8
.
6
%
+5%
0%
-5%
-10%
-15%
-20%
-25%
-30%
EnvironmentalPerformance
23
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
N
e
w

c
a
r

r
e
g
i
s
t
r
a
t
i
o
n
s
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Alternatively fuelled vehicle registrations by fuel type Eco innovations
Manufacturers have designed various eco-innovations to help drivers
save fuel and CO2:
Stop-start technologies automatically cut the engine when a vehicle
is stationary. The engine is simply started by pressing the accelerator.
Tyre pressure monitoring systems measure the pressure of each
of the tyres and will give a warning through the dashboard display if
they become under-inflated.
Gear shift indicators show the driver the optimum time to change
gear (up and down) while driving.
Low rolling resistance tyres are designed to improve the fuel
efficiency of a vehicle by minimising the energy wasted as heat when
the tyre rolls down the road.
Source: SMMT new car CO2 report 2010
Fuel type 2006 2007 2008 2009
Petrol/gas 39 3 26 156
Petrol/electric 8,957 15,971 15,385 14,645
Electric 298 397 179 55
Petrol/alcohol 145 269 240 107
petrol/alcohol
electric
petrol/electric
petrol/gas
EU Fleet Average
CO2 Targets (g/kg)
2000 2010 2020 2030 2040
Demonstrators
130 95 TBD
Fuel Cell Vehicle
Energy Storage Breakthrough
Fuel Cell & H2 Sully/Storage
Breakthrough
Energy Storage Breakthrough
Mass Market EV Technology
H
2
Infastructure
Demonstrators
Niche EVs
Charging Infastructure
IC Engine and Transmission innovations (gasoline/diesel/gas/renewables/H2)
Vehicle Weight and Drag Reduction
Full Hybrid
Plug-In Hybrid
Micro/Mild Hybrid
24
8. References
1. The Royal Academy of Engineering Electric Vehicles: Charged with Potential, May
2010.
2. Department of Business Enterprise and Regulatory Reforms, Investigation into the
Scope for the Transport Sector to Switch to Electric Vehicles and Plug- in Hybrid
Vehicles, Oct, 2008
3. 11th Anual Sustainability Report, SMMT, Oct 2010.
4. Professor Peter N C Cooke, The United Kingdom Automotive Industry, Status
Economic Recovery and Expectation, 2009.
5. An Independant Report on the Future of Automotive Industry in UK, An Automotive
Innovation and Growth Team, May 2009.
6. Gardian.co.uk, Monday 14 March 2011 http://www.guardian.co.uk/electric-vision/race-
to-lead-the-low-emission-car-market
7. SMMT, Motor Industry Facts, 2010 and Electric Car Guide, 2010
8. SMMT, Motor Industry Facts, 2010
9. http://energy.sourceguides.com/businesses/byGeo/byC/UnitedKingdom/byP/batP/batt/
btora/bApp/evbatt/evBatteries.shtml
10.Roland Berger Strategy Consultants Powertrain 2020, Feb 2010
11.http://www.bis.gov.uk/news/topstories/2011/Mar/funding-low-carbon-vehicles-projects
Department of Business Innovation and Skill, 15 Mar 2011
12.Department of Business Innovation and Skill, The UK Low Carbon Industrial Strategy,
2009
13.Department of Business Innovation and Skill, The UK Low Carbon Industrial Strategy,
2009
14. Department of Business Innovation and Skill, The UK Low Carbon Industrial
Strategy, 2009
15. SMMT, Motor Industry Facts 2010 and Electric Car Guide, 2010
16. Ofcial Journal of European Union, EU Emissions Trading Scheme, L 140 / 63, 5 June
2009
17. New Car CO2 Report, 10th Report, SMMT, 2011
18. SMMT, Motor Industry Facts, 2010
19. Low Carbon Transport: A Greener Future, Department of Transport, July 2009.
25
20. Gardian.co.uk, Monday 21 June 2010, http://www.guardian.co.uk/environment/cif-
green/2010/jun/21/batteries-electric-cars
21. Axeon, http://www.axeon.com/Technology/Batteries.aspx
22. Engineering and Technology Magazine, http://eandt.theiet.org/news/2011/mar/electric-
car.cfm, 9 Mar 2011.
26