Mobility Energy and Transportation

Revolutionizing Electric Mobility: Innovations Shaping a ~US$ 250B Opportunity by FY30

29 Oct 2024

The electric mobility landscape is undergoing a rapid transformation driven by innovations across the ecosystem. The Electric mobility ecosystem is expected to become a ~US$ 250B opportunity by FY30, growing at a CAGR of 38%. One of the key drivers behind this growth will be technological innovations that enhance efficiency, reduce costs, and improve vehicle quality. We are observing a growing emphasis on research and development throughout the entire value chain, driving innovation across multiple EV categories and subcategories.

The following exhibit summarizes the anticipated impact of these innovations. EV battery and EV charging are the two key areas that are likely to witness significant impact because of the technological disruptions.

Trends in EV components

1. Battery: Advancements in battery technology are unfolding with the development of solid-state and lithium-sulfur batteries, promising higher energy density, increased efficiency, and enhanced safety measures. Industry leaders such as Toyota and BMW, alongside innovative startups like Quantum Scape and Solid Power, are actively investing in these breakthroughs. Researchers at the University of Texas have achieved a battery with up to four times more energy storage compared to a lithium-ion battery of similar weight.
Simultaneously, initiatives by Tesla and Redwood Materials are reshaping sustainability efforts through refined battery recycling methods and the exploration of second-life batteries repurposed for home energy applications, underlining the industry's commitment to eco-friendly practices.
Moreover, ongoing efforts in enhancing battery longevity through improved chemistry and manufacturing techniques aim to produce longer-lasting batteries, thereby reducing the frequency of replacements and driving down the overall cost of EV ownership.

2. Electric motor: A significant shift towards axial flux and in-wheel motors is underway, showcasing superior power and efficiency compared to traditional counterparts. Renault has collaborated with Whylot to integrate these advanced motor technologies into hybrid vehicles by 2025.

3. Regenerative braking: The regenerative braking system technology actively captures and converts kinetic energy, thus increasing the vehicle range and reducing maintenance costs by minimizing wear and tear on conventional brakes.

Evolution in EV financing

Geofencing techniques, IoT and vehicle tracking devices, and battery subscription services, are the innovations transforming the EV financing landscape.

1. Geofencing techniques: Enable finance companies to set specific parameters, leveraging geotagging to underwrite loans for individuals lacking credit history.

2. Integration of IoT and vehicle tracking devices: This has revolutionized loan underwriting by assessing vehicle quality, monitoring battery health, and analyzing utilization data for commercial vehicles.

3. Battery subscription services: Finance companies are providing EV batteries on subscription to reduce upfront costs for customers.

Trends in driving assistance and fleet management systems

Driving assistance and fleet management are witnessing a shift through telematics and AI-based technologies.

1. Telematics: These advancements enable drivers and fleet owners by offering application-based monitoring, real-time driving pattern analysis, and remote vehicle diagnostics.

2. Advanced Driver Assistance Systems (ADAS): This provides alerts and warnings and autonomously takes actions to prevent potential accidents, thereby enhancing fleet safety and efficiency.

Advancements in EV charging

EV charging is undergoing a significant evolution to meet the growing demand for efficiency and convenience. Innovations in fast charging technologies like hypercharging and Megawatt systems for CVs aim to drastically reduce charging times. The exploration of wireless charging, employing magnetic resonance coupling and inductive charging systems, as well as experiments with electric roads, showcases promising advancements. Smart charging systems, backed by Artificial Intelligence (AI) and IoT sensors, now integrate Vehicle-to-Grid (V2G) technology, optimizing current flow during peak and non-peak hours.

Trends in EV after-sales market

Predictive maintenance driven by AI and IoT accurately predicts vehicle failures, while self-healing materials and robotic repairs contribute to enhanced sustainability. Augmented reality (AR) and virtual reality (VR) assist mechanics in performing intricate repairs, while 3D printing offers cost-effective and customizable tools, reshaping the after-sales support landscape in the EV industry.

Alternate fuels: ethanol, biodiesel, green hydrogen

India heavily relies on traditional fossil fuels like diesel, petrol, and LPG, constituting about 70% of its energy consumption. Rising fuel prices, increasing carbon emissions, and growing environmental concerns have prompted India, like other countries, to explore renewable alternatives. Biofuels such as ethanol and biodiesel are alternatives that can used in various modes of transportation.

1. Ethanol: Ethanol, also referred to as bioethanol, is a sustainable, renewable fuel produced through the fermentation of organic materials, including crops, grains, sugarcane, and agricultural waste. It possesses about two-thirds of the calorific value of gasoline.
Ethanol blending refers to mixing ethanol with petrol in specified ratios, such as E10 (10% ethanol + 90% petrol) and E20 (20% ethanol + 80% petrol). The E10 blend showcases a slightly lower calorific value of 44.22 MJ/Kg compared to 44.40 MJ/Kg in pure gasoline (E0).
The government aims for country wide E20 adoption by 2025. E10 and E20, as fuel, require less modification in existing vehicles. The shift to E10 ethanol blending in India has brought significant benefits, including reduction in GHG emissions by 32M metric tons since 2014 and savings of INR 54K Cr. on fossil fuel imports. It has also boosted farmers' income and spurred economic growth through the establishment of over 100 new ethanol distilleries.

2. Biodiesel: Biodiesel, a renewable fuel produced via transesterification (where vegetable oil/animal fat reacts with alcohol) is a cleaner substitute for traditional hydrocarbon-based diesel. Biodiesel is mixed with diesel in specific ratios, such as B5, B10, and B20 (5%, 10%, and 20% biodiesel blended with traditional diesel respectively).
While biodiesel possesses approximately 9/10th of the calorific value of traditional diesel, it significantly outperforms in terms of environmental impact. Biodiesel reduces GHG emissions by 50-75%, resulting in lower CO2 and hydrocarbon emissions, particularly in B5 fuel. Additionally, vehicles generally require no major modifications for compatibility with B5 biodiesel. The adoption of B5 biodiesel in India is estimated to reduce 32M tons of CO2 emissions annually till 2030 and also enable significant financial savings of around INR 42K Cr. on import bills.

3. Green hydrogen: Hydrogen is a clean fuel, producing no greenhouse gas emissions during combustion. Fuel cell electric vehicles (FCEVs) are a type of electric vehicle that utilizes hydrogen gas to generate electricity and power the electric engine. FCEVs can cover 300 miles on a single refuel in just 10 minutes. The potential for widespread adoption of FCEVs seems promising due to abundant hydrogen availability and their extended driving range. However, challenges related to hydrogen extraction, initial expenses, complete modification of vehicles to use hydrogen fuel, and insufficient infrastructure present significant hurdles to their adoption.