The road to an EV future still has a few potholes. Here’s how to fix them

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Luiz Avelar, Strategy Senior Director, Envision Digital, Envision Group, Envision Group

• Around the world, governments are driving the shift away from fossil-powered cars to electric vehicles.
• But several issues still pose obstacles to the widespread adoption of EVs.
• Here’s a guide to those challenges – and how we can solve them.

Late in 2021, Germany announced that sales of new internal combustion engine-driven (ICE) vehicles would end in 2030. The move did not catch the industry by surprise, despite the country having one of the largest ICE fleets in use in the world and being the proud home of traditional brands such as Mercedes-Benz, Audi and Porsche. With more 40 countries pledging to phase out ICE vehicles before 2050, Germany simply joined the international race to cut emissions and electrify transportation.

Globally, electric vehicle (EV) sales grew 80% in 2021 and companies like Toyota and Volkswagen announced $170 billion of investment into electrification. Besides eliminating exhaust emissions and tackling part of the 23% of global CO2 emissions contributed by the transportation sector, EVs also provide key flexibility to the grid as we transition to a greater share of renewable energy (RE) supply. However, despite this global push, EVs only accounted for 7.2% of global car sales in 2021. The electric revolution still has a long way to go.

Challenges to the widespread adoption of EVs

Capital cost has always been a major factor in the EV purchase decision, with 63% of consumers believing that an EV is beyond their budget. However, with the falling cost of batteries and cost parity between EVs and ICE vehicles to be achieved by 2026, focus is shifting towards the challenge of scaling the necessary infrastructure and supply of raw materials to enable the mass adoption of EVs. Here are four of the issues we face:

1. Inadequate charging infrastructure

Compared to traditional petrol stations, charging stations are harder to find, normally limited by investment costs and difficult infrastructure development. The cost of installation – from $2,500 for a slower charger to $35,800 for a fast charger – plus miscellaneous fees, such as permits and regulations, have made charging stations an expensive investment. Furthermore, enabling people to charge where they usually park, at home or at work, has its own challenges, such as dealing with multi-tenant buildings, grid-connection management, and charging slot availability. This results in a smaller network of functional charging stations and has deterred consumers from making the switch to EVs.

2. Risk of grid overload

Power grids are already strained as we deal with a greater RE share and the challenge of more intermittent energy supply. Increased adoption of EVs adds further electricity load, potentially requiring new investment in grid infrastructure to meet this increased demand. Forecasting when and where this power is needed is a further challenge faced by utilities and power generators as they grapple to understand the rapidly growing EV market. However, there is a lower risk of grid overload if EVs were to be charged during off-peak hours – that is, late at night or early in the morning.

3. High-carbon grid profile

Grey electricity grids, with their high reliance on fossil fuels, decrease the effectiveness of EVs as a way for firms and consumers to cut their emissions. Therefore, it is crucial to decarbonize the grid as much as possible to convince buyers that their switch to an EV is worthwhile and reduces carbon emissions.

4. Finite critical minerals and rare earth metals

EVs use about six times more mineral inputs than ICE vehicles. The IEA’s forecast of 70 million EVs on the road by 2040 will be accompanied by a 30-fold increase in demand for minerals. There is no shortage of these resources underground, but rather a concern as to whether they will be extracted sustainably, in line with social responsibility governance, and in time to meet demand. It is anticipated that there will be a shortage of nickel and challenges in scaling up lithium production. This supply shortage may also cause manufacturers to use lower-quality mineral inputs, adversely affecting battery performance.

Advances in technology can help mitigate these challenges

Technology will play a significant role in enabling charging and grid infrastructure and maintaining a steady supply of critical minerals to support the widespread adoption of EVs at an affordable cost.

1. Smart and flexible charging

Cars are normally idle 95% of the time. Smart and flexible charging technology utilizes unused power from car batteries to provide additional electricity supply to the grid during times of peak demand or, in some cases, just intelligently pauses or reduces charging power. Conversely, it enables consumers to recharge during off-peak hours, at one-third or less of the peak-hour charging price, thus reducing grid congestion during peak hours and cost for consumers. By allowing EV owners to schedule charging based on power constraints, price and priority, and to sell unused power back to the grid, the charging system can better anticipate sudden peaks in electricity demand. The technology also enables the grid to increase capacity, serve the increased demand from electric vehicles at a lower cost to consumers, reduce grid system stress and avoid energy price surges.

2. Smart energy management for effective EV load management

Energy management systems orchestrate the generation assets (such as solar or wind power installations) and demand assets (such as EV chargers, heating and cooling systems, and lighting) of an energy system on an integrated digital platform. This allows real-time monitoring of asset health and performance via Internet of Things (IoT) connectivity and AI-driven algorithms, which in turn maximize renewable energy consumption, thus reducing operational costs and system investments. It also allows EV and stationary storage to be co-optimized with other assets connected to the grid, providing additional grid stability services compatible with local renewable energy resources, to balance the load and ensure steady energy supply and stable market prices.

3. Battery monitoring, analytics and recycling

AIoT-enabled battery monitoring and analytics for EVs and stationary storage enables predictive maintenance and usage optimization that can extend battery lifetime, helping reduce the need for new batteries and supply chain pressure. Furthermore, data can support better decisions on when to repurpose or recycle batteries and identify individual cells that are damaged (vs scrapping the entire battery pack) thus simplifying and optimizing recycling of lithium-ion batteries.

The way forward

With the transition to EVs well underway, fueled by rising environmental concerns, government legislation and financial incentives, the challenges presented by this shift are only increasing. Fortunately, together with other hardware, manufacturing and supply chain solutions, AIoT-assisted technology enables us to overcome many challenges. Smart charging technology improves charging infrastructure and customer experience. Smart energy management improves EV and stationary load management, reducing the risk of grid overload, and enables greater consumption of renewable energy. Battery monitoring, analytics and recycling mitigate supply shortages faced by rising demand for the needed battery minerals by extending lifetime and reusability.

With the global drive to reduce emissions, coupled with technologies expediting the electrification of transport, more countries will follow Germany and other nations in banning sales of combustion engine vehicles. Knowing that the ban could be enforced as early as 2030, the question that remains is: are companies, districts and cities ready to switch to EVs in this decade?

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