EV Innovation Intelligence – Electric Vehicle Insights from EVNext

This is a part of the EV Innovation Intelligence series

These are themed around critical questions and aspects that our clients have asked. While there’s a significant diversity of topics among the posts, a common theme for all the posts is innovation.
The following are the posts in this series.
  1. Are EV startups different from startups in other industries?
  2. Are innovations possible in mature products such as electric motors?
  3. Will EVs have a different manufacturing paradigm compared to conventional vehicles?
  4. Will the adoption path for EV innovations similar to those for innovations in other industries?
  5. If batteries are the new oil, what are the old oil companies doing about it?
  6. Did COVID-19 change anything fundamentally for the EV sector?
  7. Could solar power play a big role in the EVs ecosystem?
  8. Will the world face Lithium scarcity in future?
  9. Will material sciences have a dominant role to play in EV industry?
  10. What are the viable pathways for the electrification of heavy vehicles?
  11. Will ultrafast EV battery charging become commonplace by 2030?
  12. Can innovative sales and financing models accelerate EV adoption significantly?
  13. Is it possible for small battery startups to beat big giants?
  14. The Million Mile Battery – is it a big deal?
  15. Can entirely new battery chemistries overtake Li-ion chemistry?
  16. Why is there a buzz around electric aviation?
  17. Is micromobility a big deal for EVs?
  18. Between battery charging and swapping, which will become dominant by 2030?
  19. Will China dominate EVs the way it did many other industries including solar power?
  20. Are EVs just conventional cars with batteries in place of IC engines?
  21. Why software is more important to e-mobility than to conventional mobility
  22. Will fuel cells overtake batteries to become the dominant form of EV storage?
  23. Is there more to electric vehicles than electric cars, scooters, bikes, buses and trucks?
  24. How EVs are viewed differently in different countries
  25. Why is Tesla’s valuation so high? And will it last?

Why is Tesla’s valuation so high? And will it last?

This is a part of the EV Innovation Intelligence series

In 2019, Tesla sold about 350,000 cars and make revenues of about $30 billion. Toyota sold over 10 million cars (30 times that of Tesla) and made close to $300 billion (10 times that of Tesla).

While the final 2020 annual numbers aren’t out for these companies, expect the ratios to remain the same for both number of cars sold and revenues.

In 2019, Toyota made over $20 billion in profits. Tesla lost close to $1 billion.

Toyota’s current market cap hovers around $200 billion; Tesla’s has soared beyond $800 billion early Jan 2021, making it the fifth most valuable stock on Wall Street. (Its shares, valued less than $100 just a year back is hovering over $800 beginning of 2021)

Assuming 2021 to become a normal year yet again and assuming Toyota and Tesla perform similarly as they did in 2019, Tesla’s market cap per $ revenue earned is 40 times that of Toyota.

Something seems to amiss.

Well, I have been a part of the dot com boom (and bust) 20 years back, so I am acquainted with sky high valuations, but this is a different, and more sober era. Or is it?

Does Tesla’s valuation reflect something fundamentally strong about the company, or is it a transitional euphoria before the valuation comes down to a more earthly level as befitting a car company?

I analyse based on what I have learnt about Tesla and also based on what some of the experts had thought about Tesla’s strategy.

Fundamentals are in place

It has many bright engineers in place (the company itself was co-founded by JB Straubel, an EV expert).

Tesla has firstly got it right many of the fundamental things needed to sell a lot of electric cars. It has excellent partnerships. Thanks to some quick moves, it has a manufacturing base in China and in 2020, its China revenues grew almost 100% (first 9 months).

It also earned over $1.2 billion in emission credits in 2020.

And the company has been innovating incessantly. Here are some of them:

  • Tesla is working on a whole new wiring architecture for future vehicle platforms and they aim to bring it down to just 100 meters starting with the Model Y (according to a new patent application that recently became public).
  • The company has invented a technique for increasing its all-electric vehicles’ power and torque by simply adjusting the shape of some of its electric motor’s components.  Electric current flow becomes concentrated in different spots on the motor depending on the ‘geometry’ of these parts, thus an opportunity to limit any losses has presented itself by controlling where the concentrations happen.
  • Tesla’s new patent describes a “tabless electrode” that does away with the tabs that connect the positive and negative terminals of a jelly-roll battery. The goal is to reduce resistance and manufacturing costs. The tab-less electrode technology negates the use of a tab to make the positive-negative connection by instead using two substrates, one of which has a conductive edge.
  • Tesla’s software measures how well each of the tires are gripping the road and adjusts torque in the front and rear independently hundreds of times per second to ensure the tires are constantly achieving maximum grip and propelling the car forward. And, also, Tesla uses a tire with a tread pattern specifically developed to maximize contact with the ground.

So it is not as if the company is just building castles without a foundation.

Software and not transport

I think one of the reasons for Tesla’s high rating is its positioning. In many ways, Tesla positions itself as more of a software company than a car company. While part of this positioning is based on some fundamental software technologies that are propelling Tesla’s worldwide, I would surmise that at least part of the positioning is well, deliberate positioning.

A software company most times get higher valuations on unit revenues than a hardware company such as a car company.

Quixotic nature of the founder

Tesla is almost completely identified with Elon Musk, and this, without a doubt adds to its valuation.

Musk has proved his engineering mettle in many industries – solar energy, space transport and with Tesla, in automotive. Besides, he has a strong computer science/software background (he made his first pile of fortune selling a web applications, and then of course, through the sales of PayPal).

Such a unique set of capabilities in the founder does set the company apart in terms of future expectations from investors. Well, do the investors expect Musk to combine his interests to make flying cars in future? This is not a question for amusement, for all you know, he might.

Beyond his amazing engineering and software skills, Elon as a personality is difficult to understand, and it is equally difficult to understand what he would do next. Such uncertainties, in this case at least, adds that extra zing to the company. Musk’s ability to create “ripples” through surprising announcements, sometimes in unorthodox ways, only lends to the exoticism around the company.

Other business interests

Musk operates not just a car company, but also a battery business (its energy storage business sells PowerWall), a solar power business, and space travel business. The first three could form highly synergistic ecosystems that can provide strong, long-term competitive advantages to Tesla (and perhaps to other businesses as well).

Not to be left behind, Tesla is also making significant efforts in experimenting with autonomous vehicles, with many of its test vehicles reportedly having completed millions of miles of autonomous test driving.

Early mover advantage

Many may not know that Tesla has been around for quite a while – since 2005. I think the 2005-2010 period was the one that many car companies – that are now playing catch-up – missed. This was the time when Musk had enough time to think, put together a plan and a vision, get a strong team to develop strong IPs and perhaps even understand the market better by getting his earlier products out fast. None of these appears to be something other large car companies cannot do, but Tesla is also located in Silicon Valley, a place that knows how to quickly turn early mover advantages into invincible fortresses.

Do all the above still justify the valuation Tesla has?

Personally, I don’t think so. But, for his brilliance and daring, Musk perhaps deserves to enjoy the title of the world’s riches human – even if turns out to be only for a short while.

Download the free sample of EVI2 – EV Innovation Intelligence – 1000+ EV innovations for senior management, investors and innovators.


This is a part of the EV Innovation Intelligence series

Posts in the series

Tesla’s Valuation | EV’s in different countries | Purpose built EVs | Mainstream Fuel Cells | IT in Emobility EVs versus ICEs Advent of China in Emobility | Charging vs Swapping | Micromobility & EVs | Electric Aviation Li-ion alternatives | Million Mile Battery Battery Startups versus Giants Sales & Financing Models | Ultrafast Charging a Norm | Heavy Electric Vehicles | Material Sciences in Emobility | Lithium Scarcity | Solar Power in EV Ecosystem | EV Manufacturing Paradigm | Innovations in Motors EV Startups – a speciality Oil Companies’ Strategies EV Adoption Paths Covid-19 affect on the EV Industry |

How EVs are viewed differently in different countries

This is a part of the EV Innovation Intelligence series

Depending on who you are, electric vehicles might either be viewed as a rich man’s vehicle, an avenue that can perhaps make a serious difference to transport CO2 emissions, or as an exciting business opportunity.

There are different takes on electric vehicles, depending on which country and region one is looking it, and depending also on the target segment.

Based on the insights I and my team gathered while working on the EVI2 (EV Innovation Intelligence) global guide, here are some inputs on why electric vehicle could mean quite different things for different countrymen, and as a result the adoption of electric vehicles could differ vastly among countries.

Even though it might sound obvious, it still is useful to point out that electric vehicles are more than electric cars, scooters and bicycles – there are electric buses, vans, trucks, three wheelers (tuk-tuks), golf cars, and veering towards the exotic, even electric boats and ferries, not to mention electric aircraft.

The fact that there are so many different types of electric vehicles, and the added fact that there could be further customizations possible in the electric vehicles for specific market segments, will make it clear that EVs could be looked at completely differently by different end user segments.

But let me go a bit deeper, and consider how EVs could be looked at differently depending on the economic standing of the country, by looking at three different types of economies:

  • Developed
  • Developing
  • Under-developed

Developed countries

Electric vehicles got their start in these regions. Norway for instance, has over a third of vehicles sold as electric vehicles. Not surprisingly, companies such as Tesla with their premium EVs have made significant inroads into Norway.

Toyota has sold almost fifteen million electric vehicles mostly in developed nations (though in the form of hybrid electric cars).

For most developed countries, electric vehicles are an aspirational product for the B2C segments – testimony is the Tesla cars that are selling at 4-5 times the prices of mass market cars. While the mass market electric cars will surely make their entry sometime soon, electric vehicles in the developed countries are not trying too hard to win the price sensitive market segments, at least not now. Most of their current products are thus designed to satisfy such aspirations.

The other aspect that drives electric vehicle production and investment in developed countries is the presence of mandates on vehicle CO2 emissions to tackle climate change and global warming. Even though most nations signed the Paris Accord, the developed nations are assumed to shoulder a higher responsibility when it comes to contributing to GHG reductions. And car companies know that, sooner rather than later, this will make a shift to electric almost inevitable. This could be one of the reasons we see even large vehicles such SUVs, vans and trucks getting electrified in the developed economies at this relatively early stage of the e-mobility sector.

In these countries, one interesting niche market where EVs are incorporated electric is defense and military – the reason for this is to reduce their dependence on oil when working in remote and risky locations.

Developing economies

Many developing economies (India, Kenya etc.) have a premium market that is much smaller in proportion to total market compared to wealthy economies. However, for countries such as India, their sheer population ensures that the premium market is large enough in absolute numbers even if they are small as a proportion of the total population.

Yet, most OEMs are used to catering to mass markets in these countries. Thus, while the Tesla market exists in these countries too, I doubt OEMs would invest significantly in innovating for these markets at an early stage.

But electric vehicles could solve a different kind of aspiration for many of these countries, especially countries such as India and China – the desire to breathe clean air. With air pollution rising to alarming levels in many cities in these countries, it is imperative that the governments did something about it. Electric vehicles are a powerful tool in this context.

To a certain extent, developing countries too have their targets for greenhouse gas reduction, and many of these countries already have standards to be met by auto OEMs in terms of the extent of pollution the cars can emit. For OEMs, a move to electric will make it easy for them to meet these targets and mandates.

In many developing economies, there’s also sizable interest from the business sector to use electric vehicles for their logistics (especially intra-city, short distance logistics), as it actually costs less on a total cost of ownership basis. With the emergence of electric vehicle as a service that does away with a high upfront cost, these segments are finding it easier to go electric.

While the start for electric vehicles in developed countries started with the premium markets, in some countries, the lowest ends of the markets are providing the initial thrust for electric vehicles. In India for instance, a very large percentage of electric vehicles sold are the low end electric rickshaws – essentially clunky and clattering, low-cost three wheelers on batteries and motors. For this segment, innovation has to revolve not around high-tech, but around low tech! In fact, in the case of India, the electric rickshaws are considered to be a prestigious promotion of sorts for many poor rickshaw pullers who earlier used to earlier pull tedious manual rickshaws.

Underdeveloped countries

In many poor countries in Africa, the main form of electric vehicles are basically low-end electric rickshaws.

For many of these countries, there are far more important life and death problems than climate change or even air pollution. Unemployment, health, and education are dominant needs for both the population and the governments. Electric rickshaws (mainly in the form of electric three-wheeler tuk-tuks), take care of some of these needs.

It is also possible that the batteries in the electric vehicles could also be something many in these countries with erratic power supply use as backup energy storage – they can perhaps charge their mobile phones and even have their electric lanterns glow at night using the electricity stored in the rickshaws.

Download the free sample of EVI2 – EV Innovation Intelligence – 1000+ EV innovations for senior management, investors and innovators.


This is a part of the EV Innovation Intelligence series

Posts in the series

Tesla’s Valuation | EV’s in different countries | Purpose built EVs | Mainstream Fuel Cells | IT in Emobility EVs versus ICEs Advent of China in Emobility | Charging vs Swapping | Micromobility & EVs | Electric Aviation Li-ion alternatives | Million Mile Battery Battery Startups versus Giants Sales & Financing Models | Ultrafast Charging a Norm | Heavy Electric Vehicles | Material Sciences in Emobility | Lithium Scarcity | Solar Power in EV Ecosystem | EV Manufacturing Paradigm | Innovations in Motors EV Startups – a speciality Oil Companies’ Strategies EV Adoption Paths Covid-19 affect on the EV Industry |

Is there more to electric vehicles than electric cars, scooters, bikes, buses and trucks?

This is a part of the EV Innovation Intelligence series

You bet!

There is so much transport around us that we just take it for granted.

All you need is to stand by an urban roadside and observe the traffic flow during peak hours – if you are observant enough, you will likely count more than ten different types of vehicles.

But when one talks about electric vehicles, it is more than different types of vehicles, it is also different types of electrification – for instance, hybrid electric vehicles are quite different from fully electric vehicles. And then, a discerning customer might also want to distinguish between a virgin electric vehicle and a retrofit electric vehicle.

It should hence be no different that there are many, many types of electric vehicles. Our EVNext team, while working on the EVI2 guide  (our global report on electric vehicle innovation intelligence), identified close to 30 different types of electric vehicles. And if one were really discriminating, we suspect this number could be even higher.

Cars and heavier vehicles

Electric heavy vehicles include cars like SUVs, trucks, loaders, vans, etc.

  • Electric cars – mass market
  • High-end electric cars – luxury and sports cars
  • Electric trucks
  • Electric buses
  • Electric vans
  • Electric LCVs

2 & 3 wheelers

  • Electric two-wheelers play a major role in micro-mobility. It includes electric bikes, electric scooters, electric motorbikes, electric sports bikes, etc. The Global Electric Three-Wheeler Market in terms of value is estimated to reach USD 4.9 Billion by 2026, registering a CAGR of 11.10% during the forecast period. Electric Three-Wheeler, also referred to as e-rickshaw, is an electrically powered three-wheeler used to carry both passengers and utility. It is considered one of the common forms of urban and suburban transport. Electric three-wheeler comprises an electric motor that is powered by a rechargeable battery. Moreover, the latest electric three-wheeler vehicles contain plug-in charging options, while earlier, the battery of the three-wheeler was charged after removing it from the vehicle.
    • Electric scooters
    • Electric 3 wheelers
    • Electric motorbikes
    • Electric bicycles

Off-road vehicles

  • An off-road vehicle is capable of driving on and off paved or gravel surfaces. It is generally characterized by having large tires with deep, open treads, a flexible suspension, or even caterpillar tracks.
    • Electric tractors

Micro mobility vehicles

  • Micro mobility refers to a range of small, lightweight vehicles operating at speeds typically below 25 km/h (15 mph) and driven by users personally (unlike rickshaws). Micro Mobility devices include Ebikes, electric scooters, electric skateboards, shared bicycles, and electric pedal-assisted (pedelec) bicycles.
    • Electric golf carts for use in micro-mobility
    • Electric segway

Non-land vehicles

  • Non-land vehicles are used in water and air transportation. Drones, flights, boats are some examples of non-land vehicles.
    • Electric drones
    • Electric aircraft
    • Electric boats
    • Flying electric cars/taxis
    • Electric submarines
    • Electric shipping

Hybrids

  • Hybrid electric vehicles are powered by an internal combustion engine and an electric motor, which uses energy stored in batteries.  A traditional hybrid electric vehicle cannot be plugged in to charge the battery. Instead, the battery is charged through regenerative braking and by the internal combustion engine. Plug-in hybrids can be plugged in and charged directly from an electrical source. (Micro, mild and other kinds of hybrids)
    • Hybrid electric cars
    • Hybrid electric trucks
    • Hybrid electric bicycle
    • Hybrid electric LCVs
    • Hybrid electric 3-wheelers

Retrofits

  • Traditional ICE vehicles can be changed to EVs or hybrids through Retrofitting. This is of importance because there are millions of ICE vehicles on the road and there is a possibility that they can be converted into an EV.
    • Retrofit electric buses
    • Retrofit electric trucks
    • Retrofit electric cars
    • Retrofit electric 3 wheelers

Others

  • Autonomous EVs
  • Fuel cell-based electric trains
  • Fuel cells based EVs

And the above list, long as it is, still does not tell the entire story. There are further custom-built variations available within many specific types of vehicles. For instance, electric vans are also being custom built to be used as ambulances, small three-wheeler EVs are customized for use in internal spaces like large buildings for floor cleaning etc., small electric trucks are being modified to be used as garbage vehicles, etc.

Download the free sample of EVI2 – EV Innovation Intelligence – 1000+ EV innovations for senior management, investors and innovators.


This is a part of the EV Innovation Intelligence series

Posts in the series

Tesla’s Valuation | EV’s in different countries | Purpose built EVs | Mainstream Fuel Cells | IT in Emobility EVs versus ICEs Advent of China in Emobility | Charging vs Swapping | Micromobility & EVs | Electric Aviation Li-ion alternatives | Million Mile Battery Battery Startups versus Giants Sales & Financing Models | Ultrafast Charging a Norm | Heavy Electric Vehicles | Material Sciences in Emobility | Lithium Scarcity | Solar Power in EV Ecosystem | EV Manufacturing Paradigm | Innovations in Motors EV Startups – a speciality Oil Companies’ Strategies EV Adoption Paths Covid-19 affect on the EV Industry |

Will fuel cells overtake batteries to become the dominant form of EV storage

This is a part of the EV Innovation Intelligence series

While a large part of the electric vehicle ecosystem is investing heavily in batteries, a select set of automotive giants are quietly (or perhaps not so quietly recently) have chosen to invest in fuel cells.

Which is a better long-term bet?

Imagine the following scenario: Hydrogen is available in plenty around us, at a fairly low cost. The technologies and engineering to store, transport, and use it is robust and well designed, such that storing hydrogen as well as using them in vehicles is a cinch.  Using hydrogen to produce electricity through reverse electrolysis is low-cost.

While the above scenario is hypothetical, there is little doubt that hydrogen, in the form of fuel cells, would be the fuel of choice for electric vehicles owing to its high energy density. But there are challenges faced in each of the fuel cell stages/components mentioned above.

Whether (and when) fuel cells will be able to dominate batteries depends on when these challenges will be overcome (and if that is too far into the future, batteries could have evolved as well, though I doubt they can match fuel cells – or for that matter even gasoline – on energy density for the foreseeable future).

And there’s another thing when it comes to fuel cell adoption. Batteries – including Li-ion batteries – had been in common use already by the time the EV adoption started accelerating, around 2015. There was thus an existing ecosystem for batteries – producers, suppliers, end-users, etc. – making it easier for batteries to be used in transport as well. Fuel cells cannot claim that advantage, as of 2021. There are not too many applications where hydrogen fuel cells are used today, globally. This may not be a show-stopper, but it could be a show-slower.

Benefits of fuel cells – Fuel density for fuel cells 

Hydrogen has an energy density of 120 MJ/Kg; that gasoline is 45 MJ/Kg; that diesel, around the same; that of the best Li-ion battery available today is 1.5 MJ/Kg.

Hydrogen has 80 times the energy density as the best available battery today. That alone should make it the world’s favorite fuel!

Where does the challenge lie? Production? Cost? Safety?

  • Fuel cell technical challenges:
    • The channels in a cell and the cells in a stack system need to be operationalized under the same conditions. The framework and scaling-up approach need to be examined carefully with respect to the operation and risks associated with the fuel cells and systems used in the scaling-up, which are important in assessing the deployment of the fuel cell technologies. Solving the reliability issues is essential in order to address the high cost and low availability of fuel cells. It is very difficult to keep all channels and cells working at the same levels. The theory of scaling-up has shown that an absolutely uniform flow distribution is still a challenge. A small, uneven flow distribution can lead to an operational misalignment of cells and stacks, introducing high levels of uncertainty and decreased efficiency. As a result, the high cost of fuel cells can be affected by frequent repair and maintenance downtime, leading to an impression of low reliability.
  • A Materials Challenge:
    • Fuel cells involve ionic transport and electrochemical reactions where electrolyte and electrode properties play a major role in cell performance. However, a range of complementary materials is also needed to ensure equally relevant functions like charge transport and/or cell interconnection, sealing, or catalysis. Also, the expected lifetime of such functional materials might reach many thousands of hours, without degradation of individual properties or interfaces. These demanding targets should be achieved with cheap materials and mass-production technologies. This explains the core role of materials science and engineering in FC progress.
  • Safety concerns:
    • Fuel cells power vehicles by electrochemically combining hydrogen gas (H2) and oxygen (O2) from the surrounding air into water (H20) and electrical energy. The electrical energy is then used to power both the locomotion of the vehicle through electrical motors and the current electrical usage devices such as the radio, lights, and air-conditioning. A notable difference between current and new-technology vehicles is that the voltage needed to power the electric motors is much higher in new vehicles than can be accommodated by the current standard voltage of a 14V system; the automobile industry is in the process of moving to a new standard of a 42V system. The 42V system was chosen as an industry-standard in part for safety reasons: anything greater than 50 volts can stop a human heart. On the other hand, some fuel cell vehicle motors run on voltages exceeding 350V. With such high currents, the danger of electric shock is great.
    • The second area of concern lies in the fuels used to power this future generation of vehicles. Even though hydrogen remains the main focus of future fuel cell vehicles, it is neither the only possible fuel for them (other fuels used to power fuel cells directly include methanol, ethanol, and methane) nor is hydrogen used only for this purpose. In addition, the hydrogen used to power a vehicle does not necessarily have to be stored on the vehicle as hydrogen. Reforming different hydrogen sources, such as alcohol, methane, propane, and even regular gasoline can create gaseous hydrogen in the vehicle itself. Hydrogen stored as such in a vehicle or reformed in it can also be used to power a ‘classic’ internal combustion engine. Besides reforming hydrogen in the vehicle itself, there are several ways of storing hydrogen in a vehicle. Each has its own set of flammability issues.
    • Both the electrical current and the flammability concern of the fuel translate into the design needs for the vehicle itself as well as the requirements for structures intended for the storage, refueling, and repair of these vehicles.

What are the types of fuel cells available?

Fuel cells are distinguished by the fuel that is fed which changes the reactions that take place and the processes in which the fuel is consumed.

  • Proton-exchange-membrane(PEM) fuel cells contain a polymer membrane that separates the anode(hydrogen) and cathode(oxygen) sides, the membrane allows the proton to move from the anode to the cathode. There exists a catalyst at the anode which breaks the hydrogen into its proton and electron. In addition to pure hydrogen forms, the fuel can also be hydrogen-containing compounds such as hydrocarbons, methanol, hydrides, and even diesel. But they come at the expense of carbon emissions.
  • Phosphoric-Acid fuel cells. In these cells, phosphoric acid is used as a non-conductive electrolyte to pass positive hydrogen ions(protons) from the anode to the cathode. These cells commonly work in temperatures of 150 to 200 degrees Celsius. This high temperature will cause heat and energy loss if the heat is not removed and used properly. This heat can be used to produce steam for air conditioning systems or any other thermal energy-consuming system. Phosphoric acid, the electrolyte used in PAFCs, is a non-conductive liquid acid that forces electrons to travel from anode to cathode through an external electrical circuit. Since the hydrogen ion production rate on the anode is small, platinum is used as a catalyst to increase this ionization rate. A key disadvantage of these cells is the use of an acidic electrolyte. This increases the corrosion or oxidation of components exposed to phosphoric acid.
  • Solid-acid fuel cells use a solid acid material as the electrolyte. At low temperatures, solid acids have an ordered molecular structure like most salts. At warmer temperatures (between 140 and 150 °C for CsHSO4), some solid acids undergo a phase transition to become highly disordered “superprotonic” structures, which increases conductivity by several orders of magnitude. The first proof-of-concept SAFCs were developed in 2000 using cesium hydrogen sulfate (CsHSO4). Present SAFC systems use cesium dihydrogen phosphate (CsH2PO4) and have demonstrated lifetimes in the thousands of hours.
  • Alkaline fuel cell commonly called the hydrogen-oxygen fuel cell. This must not be confused with the Hydrogen using PEM fuel cells used in fuel-cell-electric-cars (casually called hydrogen fuel cell cars). In these alkaline fuel cells, both hydrogen and oxygen gas(not atmospheric oxygen but rather pure O2 gas) have to be supplied into an electrolyte that reacts and forms water and electrons. This type of cell operates efficiently in the temperature range 343–413 K and provides a potential of about 0.9 V.
  • Solid-Oxide fuel cells use a solid oxide electrolyte, also called a ceramic. These fuel cells are different as in these the negatively charged oxygen ions(pure oxygen is electronegative) move through the electrolyte( in every other fuel cell, the hydrogen ions move) and react with the electrons( generated from the hydrogen fuel) and then move to the anode to combine again with the hydrogen protons to form water. The demerits of these fuel cells are their working temperature of 800-1000 degrees celsius. But they can accommodate any fuel as a source of hydrogen.

Which type(s) can be used in FCEVs?

FCEVs use only PEM hydrogen fuel cells which use pure hydrogen. This is due to the fact that fuel cell vehicles are an attempt to achieve emission-free transportation and cannot be subjected to the use of hydrocarbon fuels which would again release carbon emissions. Another reason why pure hydrogen fuel cells are used in EVs is because of the ease of manufacturing hydrogen as compared to the other clean hydrogen emitting fuels and the high efficiency of a PEM cell. It is simpler. The other types of fuel cells can involve cogeneration or regeneration where the heat released in the process or the water or the carbon gases can be reused(made to react) to form into hydrogen. This is a complicated process and therefore restricted to stationary and industrial uses. Again implying why only PEM pure-hydrogen fuel cells can be efficient in powering vehicles.

Hydrogen production

Hydrogen can be produced from natural gas (not the greenest of ways), from the electrolysis of water (requires a real lot of energy) or with biomass as a starting point.

The first option cannot be the avenue of choice if fuel vehicles need to be low carbon

Electrolysis sounds great but the challenge is the source of electricity for the process. If it is from a coal-fired power plant, it cannot be again considered as low carbon, but if it is using solar power, things look quite different.

Using biomass as a starting point for hydrogen production appears to be a very interesting pathway. Of course, you require energy to recover hydrogen from biomass, but possibly a lot less energy to produce hydrogen by splitting a water molecule.

Hydrogen storage

The overarching technical challenge for hydrogen storage is how to store the amount of hydrogen required for a conventional driving range (>300 miles) within the vehicular constraints of weight, volume, efficiency, safety, and cost. Durability over the performance lifetime of these systems must also be verified and validated, and acceptable refueling times must be achieved. Requirements for off-board bulk storage are generally less restrictive than on-board requirements; for example, there may be no or less-restrictive weight requirements, but there may be volume or “footprint” requirements. The key challenges include:

  • Weight and Volume. The weight and volume of hydrogen storage systems are presently too high, resulting in inadequate vehicle range compared to conventional petroleum-fueled vehicles. Materials and components are needed that allow compact, lightweight, hydrogen storage systems while enabling a mile range greater than 300 miles in all light-duty vehicle platforms.
  • Efficiency. Energy efficiency is a challenge for all hydrogen storage approaches. The energy required to get hydrogen in and out is an issue for reversible solid-state materials. Life-cycle energy efficiency is a challenge for chemical hydride storage in which the byproduct is regenerated off-board. In addition, the energy associated with compression and liquefaction must be considered for compressed and liquid hydrogen technologies.
  • Durability. The durability of hydrogen storage systems is inadequate. Materials and components are needed that allow hydrogen storage systems with a lifetime of 1500 cycles.
  • Refueling Time. Refueling times are too long. There is a need to develop hydrogen storage systems with refueling times of less than three minutes over the lifetime of the system.
  • Cost. The cost of on-board hydrogen storage systems is too high, particularly in comparison with conventional storage systems for petroleum fuels. Low-cost materials and components for hydrogen storage systems are needed, as well as low-cost, high-volume manufacturing methods.
  • Codes and Standards. Applicable codes and standards for hydrogen storage systems and interface technologies, which will facilitate implementation/commercialization and ensure safety and public acceptance, have not been established. Standardized hardware and operating procedures, and applicable codes and standards, are required.
  • Life-Cycle and Efficiency Analyses. There is a lack of analyses of the full life-cycle cost and efficiency for hydrogen storage systems.

Download the free sample of EVI2 – EV Innovation Intelligence – 1000+ EV innovations for senior management, investors and innovators.


This is a part of the EV Innovation Intelligence series

Posts in the series

Tesla’s Valuation | EV’s in different countries | Purpose built EVs | Mainstream Fuel Cells | IT in Emobility EVs versus ICEs Advent of China in Emobility | Charging vs Swapping | Micromobility & EVs | Electric Aviation Li-ion alternatives | Million Mile Battery Battery Startups versus Giants Sales & Financing Models | Ultrafast Charging a Norm | Heavy Electric Vehicles | Material Sciences in Emobility | Lithium Scarcity | Solar Power in EV Ecosystem | EV Manufacturing Paradigm | Innovations in Motors EV Startups – a speciality Oil Companies’ Strategies EV Adoption Paths Covid-19 affect on the EV Industry |

Why software is more important to e-mobility than to conventional mobility

This is a part of the EV Innovation Intelligence series

While our EVNext team was researching the various innovations from EV OEMs, Tesla of course naturally kept popping up frequently.

Like everyone else, we also were intrigued about Tesla’s sky high valuation. While there are many theories on this, a couple of interesting analyses argued how Tesla has been able to get into a completely different valuation league because they were not building electric cars, but were essentially building software.

In fact, there is so much discussion and excitement about electric vehicles in the IT and software industry that one can indeed mistake electric vehicles to be a software offering in some form.

Except they are not. EVs take us from one place to another – that is their core value. Software provides valuable support to this core value proposition, but it is still support.

While that is the theory, in practice, and in business, software is likely to punch far above its weight in e-mobility. Why is this so?

One reason is of course simply that software does provide excellent value in some aspects of electric vehicles such as telematics, helping locate charging stations, helping make more efficient and safer batteries, and also helping EV makers build better vehicles through the use of design and simulation software etc.

But I suspect that the larger-than-actual value of software in e-mobility may have more to do with aspects that are less tangible. Here are some:

1. Electric vehicles are starting to grow at the same time that three other dimensions in transport are making a mark – connected, shared and autonomous vehicles. All these three dimensions rely heavily on software. While all these three are not specific to electric vehicles (any vehicle can use it), the timelines of electric vehicles growth is so well aligned to the growth of these dimensions that they almost appear to be made for electric vehicles!

2. Growth of distributed renewable energy, especially solar power – Solar power has been growing in leaps and bounds. By 2030, estimates suggest that it contribute be much higher to global electricity than the 2% that it did in 2020. But solar has an Achilles Heel – its storage! Storing power through is costly. But what if EV batteries could store this (especially from rooftop solar power plants) and supply it to the consumer or to the grid. Sounds wonderful doesn’t it. This is not fanciful. Called the Vehicle 2 Grid technology, it is already happening in parts of the world. But for this to work well, a lot of software needs to do their work properly.

3. Unlike conventional vehicles that every user if highly familiar with, electric vehicles are new. The range anxiety will hover for sometime. So will anxieties about battery safety etc. This is one another domain where software adds good value. By digging into battery and mileage data (and also smartly using data about charging station locations etc), analytics can provide vehicle users rich intelligence and inputs that can make them have better control over their riding experience.

The three above aspects are quite different from each other, but together, they make software a far more critical component in electric vehicles than they are for conventional vehicles.

Software for locating charging stations – With range anxiety likely to be a challenge for a while, software that can let vehicles riders know about the location and proximity of charging stations will be of high value.

Software for a connected vehicle – Connectedness is more important for EVs than for conventional vehicles, at least in the initial stages when users are concerned with range anxiety.

Software for telematics – Telematics can play an important role in electric vehicles. It can be used to monitor energy generation and consumption, constantly monitor battery’s state of charge and update the user, and also help in locating charging stations nearby.

Software to make batteries more safe and efficient – Through their use in battery management systems, software plays a critical role in both the performance and safety of EV batteries.

Software for fast charging – With DC fast charging becoming more commonplace, at least in the developed nations, embedded software is needed in charge controllers and the BMS that ensure that the entire charging process is safe and efficient.

Software for V2G – With the rise of vehicle to grid technologies in which the battery in an EV can act as the distributed electricity storage unit for the grid or for other distributed energy sources such as rooftop solar power plants, there’s a clear need for relevant software to make these happen seamlessly by synchronizing various components in the ecosystem.

Software for analytics, esp. for battery use – Beyond the basic analytics, today’s electric vehicles provide significant amounts of data and analytics to the users.

Software for design, testing, simulation – With a large part of the innovation in electric vehicle and component manufacturing yet to come, there is a clear need for software that can enable simulation during design of these components, which can both cut down production costs and bring the vehicles faster to the market. Once the prototypes or the first set of vehicles, batteries, motors or other components are produced, a similar need exists for software to comprehensively test their performance and safety.

Here are factoids and updates on how software and digital are playing a valuable role in e-mobility

  • Blockchain – Blockchain technology can prevent the age-old problem of mileage fraud through establishing a transparent, anonymous and manipulation-proof database for mileage.
    • Blockchain is solving problems and increasing transparency within supply chain processes, including the mobility sector. The vehicle manufacturing process involves an incredible number of components, stakeholders, companies and processes.
    • Blockchain technology enables the transparent and immutable logging of a vehicle’s sensor data in a decentralized network. Smart contracts allow this data to be processed and implemented into an insurance plan.
    • Volvo will become the first carmaker to implement global traceability of cobalt used in its batteries by applying blockchain technology. Traceability of raw materials used in the production of lithium ion batteries, such as cobalt, is one of the main sustainability challenges faced by car makers.
  • Cloud – Bosch announced in June, 2019, the development of a new service called Battery in the Cloud that it claims can help extend the life of electric car batteries by as much as 20%. Batteries connected to Bosch’s cloud system are constantly monitored and analyzed based on how much stress the battery is under due to driving style, environmental factors. That information is then used to not only forecast a battery’s remaining run time, but to optimize the charging process and deliver tips on how to conserve battery power to drivers through a dashboard display.
  • AI/ML – A new AI technology which has been created by automation company Comau is designed for industrial-scale EV manufacturing to optimise the construction and assembly of batteries. The AI technology automatically assesses the surface defects and the electrical resistance of each joint before final assembly, therefore saving the manufacturers time and costs while also ensuring the safety of the battery.
  • The battery sector is turning to artificial intelligence for clues on how to improve recharging rates without increasing the degradation of lithium-ion batteries.
    • The researchers wrote a program that predicted how batteries would respond to different charging approaches and was able to cut the testing process from almost two years to 16 days.
  • IBM has also been exploring alternatives to nickel and cobalt in a bid to find more sustainable materials and reduce costs. The job of evaluating the 20,000 possible compounds to use as the electrolyte would have taken some five years without AI. IBM was able to employ machine learning to get the job done in nine days.
  • Simulation tools – Process simulation with tools such as Siemens Process Simulate allow manufacturing engineers to design the assembly operation sequences, validate reachability and process cycle times, and generate work instructions from the operator’s point of view. Process simulation also supports flexible workcell design, robotics programming and workcell control and automation for complex processes that are unsuitable or unsafe for manual execution. With these capabilities, companies can realize efficient ramp-up to production and lower implementation risks.
  • Monitoring & IoT – Over the air updates – Tesla started rolling out a new software update for its vehicles that will precondition the battery as it reaches a charger – Tesla-branded or otherwise. That means the vehicle will warm up the battery, enabling it to reach higher charging speeds, when the driver has inputted a charger as a destination
  • Automakers can use monitoring software to collect data from the BMS. Analyzing the data gives automakers insights into which lithium ion battery packs or cells are performing better than others and safety information about the condition and performance of the battery under different pressures.
  • Big Data/Analytics – Big Data Analytics helps integrate EVs in a wide variety of ways like optimized charging, efficient battery management, EV status tracking, etc. While convenience, cost-effectiveness, etc., are important for efficient EV adoption, the analytics derived from the Big Data can help directly in improving these levels by providing insights on EV charging stations
    • Charging station selection – where the entire locality gets scanned to analyze and identify individual potential charging stations
    • Spread awareness among the people – by identifying the highly visible activity centers for chargers that boost maximum exposure so that it encourages people to opt EVs.
    • Right-sizing and optimization of grid load – by analyzing the number of chargers required, installation costs, the load on the grid, and the cost associated with charging
  • Navigation software – Electric car navigation based on the location of charging points can be a real solution to the problem of charging. Integrated with the car head unit, applications can help you find the closest station and battery management systems can inform you beforehand when charging or maintenance is necessary.
  • EV fleet management software – Fleet management is the management of a group of commercial vehicles over a large geographical area. It includes the handling of vehicle maintenance, financing, tracking, replacement, navigation, and routing.
    • Fleet management software refers to an application that helps business enterprises coordinate and manage work vehicles in a central information system for the smooth functioning of the entire organization. The software thus helps the enterprise to reduce costs and enhances performance according to government regulations.
    • It uses a basic combination of Big Data Analytics and GPS to track, analyze, store information and make predictions.

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This is a part of the EV Innovation Intelligence series

Posts in the series

Tesla’s Valuation | EV’s in different countries | Purpose built EVs | Mainstream Fuel Cells | IT in Emobility EVs versus ICEs Advent of China in Emobility | Charging vs Swapping | Micromobility & EVs | Electric Aviation Li-ion alternatives | Million Mile Battery Battery Startups versus Giants Sales & Financing Models | Ultrafast Charging a Norm | Heavy Electric Vehicles | Material Sciences in Emobility | Lithium Scarcity | Solar Power in EV Ecosystem | EV Manufacturing Paradigm | Innovations in Motors EV Startups – a speciality Oil Companies’ Strategies EV Adoption Paths Covid-19 affect on the EV Industry |