The four disrupters of an electric vehicle future

The speed and extent of the disruption from electric car uptake in Australia will be determined by the answers to four key questions, finds a new paper by global advisory firm Advisian.

“These questions point to a complex set of variables which make electric vehicle uptake hard to predict,” said Phil O’Neil, paper co-author and senior associate, New Energy at Advisian.

“While the idea of a great global transition to the new energy future may sound straightforward, countless variables and external influences could take events in directions that we may not have even considered.

“In the transition from petrol to electric vehicles, potential confounding factors include questions about electric vehicle uptake, whether alternatives, such as hydrogen, could challenge batteries as an energy carrier, and how to reform our tax system to recover lost petrol-excise revenue.”

The questions examined in the paper can be found below.

1. Can our infrastructure scale?

Poor recharging infrastructure in Australia has led to doubts about whether electric vehicles are suitable for this country. However, the paper concludes that Australians, who were early adopters of petrol vehicles before refuelling infrastructure was widespread, will follow the same pattern with electric vehicles.

“Early electric vehicle adopters will take home-charger cords with them to recharge en route,” said O’Neil.

“We also expect that electric vehicle charging stations will become common at workplaces and shopping centres, as employers and retailers take the opportunity to provide a perk for employees or attract shoppers.”

2. Will consumers be able to afford them?

Using off-peak residential electricity to charge electric vehicles costs less than filling similar vehicles at the petrol pump, offering a saving of more than $30 for 500 km of driving. Electric vehicles also need less maintenance than petrol or diesel cars, making them cheaper to own in the long term.

“Electric vehicles will become increasingly attractive from an economic perspective,” said O’Neil.

“But we’re still looking at a couple of decades to change over from full petrol to full electric, which reflects the normal turnover in the personal car fleet. However, the rapid adoption of car sharing and autonomous vehicles has the potential to reduce this period dramatically.”

3. Will recharging stay cheap?

New players in the production and distribution of transport energy are competing for customers with electric vehicle manufacturers, pushing down recharging prices for electric vehicles. Tesla is already offering owners of most vehicles in its range free recharging using its Supercharger network. Electricity retailer AGL has announced electric vehicle charging for $1 per day.

“The convergence of technologies suggests that we will also be using our electric cars to store energy from household solar panels for later use, or even to sell it on the National Energy Market,” said O’Neil.

4. How will fuel production and refineries respond to electric vehicles?

High electric vehicle uptake could reduce demand for lighter fractions, such as petrol, while demand for heavier fractions, such as diesel and jet fuel, would likely remain unmoved. This changed balance of demand could see a surplus of lighter fractions drive down petrol prices.

“Lower petrol prices could have some impact on electric vehicle uptake,” said O’Neil.

“But it’s not a sure thing. Refineries might instead use key components like naphtha and gas as oil petrochemical feedstocks instead of for petrol production. This is a process of ‘cracking’ molecules to form the building blocks for plastics, resins and chemicals.”

Each of these potential obstacles to large-scale electric vehicle adoption could have major implications for industry and policymakers. According to O’Neil, “A thorough understanding of the variables is vital to preparing.”