CASE in point: ElectricCorporate News -
By Jack van Reisen, Executive Director Mobility Sector at NIBC
To live is to move. The concept of mobility has evolved enormously over the years and continues to change rapidly. Mobility is increasing across the world, both in developed and emerging countries, as people live longer and data plays an ever more integral part in our lives.
This is the final blog in our series about four key trends in mobility: Connected, Autonomous, Shared and Electric (CASE). Drawing on NIBC’s expertise and experience in these areas, we look at themes and innovations in mobility, and the opportunities and challenges they present for businesses. In this blog:
You might be surprised to learn – as I did when I visited the Louwman Museum in The Hague – that the first electric cars appeared on the road more than a century ago. But electric vehicles are a very modern and irreversible mobility trend.
As the climate crisis grows more urgent, we’re shifting from traditional fossil fuels towards cleaner, more sustainable forms of energy to heat houses or power vehicles. Targets to reduce emissions are becoming more stringent, and it’s clear we can’t achieve them with diesel or petrol-fuelled cars, buses and trucks. It’s time for electric, which includes hydrogen and solar-powered vehicles.
In July, 2019, 7.4% of new car sales in Europe were electric. In the first 9 months nearly 200,000 electric vehicles were sold in the EU (50% more than last year). And the Netherlands is in the vanguard – as you might expect from a densely populated country where clean air is a major issue. In June, the Tesla Model 3 was the best-selling car on the Dutch market. It will take a few more decades before the total Dutch vehicle fleet has gone electric, but I do believe it’s only a matter of time.
Vehicle producers are moving fast in this direction. Volkswagen has launched the biggest electrification initiative in the auto industry, with plans to invest some EUR 30 billion in development and manufacture of many more and also cheaper models. The demand is huge: what Dutch municipality or province, for example, wants to have diesel buses spewing out nitrogen oxide emissions on its roads?
There are challenges galore, such as the distance electric cars can drive before needing to be recharged, the network of charging points, and the demands placed on the grid system. The number of electric cars in the Netherlands is growing faster than the quantity of charging points. As for the grid, as I recently heard TU Eindhoven professor Maarten Steinbuch say on the radio, we don’t want to channel so much electricity from the grid into cars that our fridges don’t work.
These challenges can and will be solved. Good progress is already being made. As more and more electric cars are produced, battery quality will improve further, cars will be able to drive longer distances between charging, and prices for the vehicles – which are still expensive now - will fall. As more electric cars are driven and parked, decentralised energy will be produced that can be fed back into the grid. And artificial intelligence will enable us to make more efficient use of that grid.
New business models
Those positive prospects will challenge the business models of many companies, however. For example, electric cars need much less repair and maintenance than ‘ordinary’ cars, because they use no oil and fewer parts. So companies that now earn well on lucrative aftersales and oil replacement will see that income shrink and may need to go back to the drawing board.
Businesses also need to think about financing to grow in the electric mobility market. At NIBC, we support companies which produce electric buses and e-bikes and heavy-duty chargers to lease to public transport companies. We also support car leasing companies focusing on electric vehicles.
The electric mobility market is moving fast. NIBC has in-depth knowledge of the mobility industry and experience in funding businesses with tailor-made solutions to accommodate their future growth. Want to finance your company to get ahead? Get in touch with us.
- Read the first blog: "CASE in point: Connected mobility"
- Read the second blog: "CASE in point: Autonomous"
- Read the third blog: "CASE in point: Shared mobility"
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