PLUGGED IN TO THE FUTURE
Smaller and cheaper two- and four- wheelers, as well as more versatile batter y technology, could spur much wider adoption of electric vehicles. By Erich Parpart
More drivers are becoming interested in electric vehicles but high prices are keeping them beyond the reach of average consumers, especially in Asia. A lack of charging infrastructure further limits their appeal.
In the United States, all the hype has been about the Tesla Model 3, the first battery-electric vehicle to be priced competitively with average petrol cars, at around US$35,000. But Tesla has struggled to meet demand at home, which makes exports a moot point. If a Thai driver wanted to import a Model 3, the duty of 200% would drive the price up into Mercedes territory.
Nissan, meanwhile, is hoping Thai drivers will respond to its Leaf EV, which it was planning to begin importing from Japan in April. However, the debut has been delayed while the company haggles with the government over taxes as it wants to keep the local price at just over 1 million baht — about 500,000 baht less than what motorists would have to pay if normal duties applied.
The problems slowing the uptake of full-sized all-electric sedans are not going to be resolved overnight, but there is good news elsewhere in the EV world. The prices of batteries and other components are falling dramatically and rapidly, thanks to technology advancement. As well, innovations such as mobile power packs will reduce drivers’ worries about finding charging stations.
At the same time, new and cheaper electrified transport options are emerging, and governments in developing Asia, especially China and India, are pushing for them in a big way in order to reduce air and noise pollution and cut dependence on fossil fuel imports.
TWO-WHEEL PROGRESS
E-mobility is the term used to apply to all street vehicles that are powered by an electric motor, which in turn obtains its energy from the power grid. In addition to the all-electric battery-powered EV, there are vehicles with a combination of electric motor and combustion engine (range-extended electric vehicles or REEV), and hybrids that can be recharged via the power grid (plug-in hybrid electric vehicles or PHEV). Two- and three-wheel and micro-car options are also available.
According to a report by Dublin-based Research and Markets, the global electric scooter and motorcycle market was worth $13 billion in 2016, with Asia Pacific accounting for 90% of all sales, and is projected to reach $22.2 billion by 2025. China has been the largest market for these vehicles globally while India is expected to witness the highest growth through 2025, said the report.
“I am actually quite optimistic about that segment in Southeast Asia and South Asia. We have done some work looking at battery swapping and I think that will be quite a big enabler,” Colin McKerracher, head of advanced transport at Bloomberg New Energy Finance, said at the International Electric Vehicle Technology Conference and Exhibition (iEVTech 2018) held in Bangkok recently.
Battery swapping basically allows people to cut the upfront cost of ownership and sign up for a monthly subscription, which allows them to swap batteries in and out at charging stations as needed.
“Battery swapping was tried for four-wheel vehicles but it didn’t really succeed because you needed standardisation across the automakers and they were very heavy, so you need a lot of machinery to swap the battery,” said Mr McKerracher.
For two- or three-wheelers, the battery can be comfortably manoeuvred by a single person in the same time it takes to refill a vehicle with petrol. Speed and convenience, coupled with a subscription-based business model, seem quite appealing.
“This segment has the potential to grow very quickly here in these markets (South and Southeast Asia),” he added.
Honda Motor of Japan is now betting big on India, the world’s largest two-wheeler market accounting for 30% of all motorbike and scooter sales. Honda Motorcycle & Scooter India (HMSI) plans to invest $123 million in the financial year that began on April 1.
Most of the new investment, it said, would go to prepare Indian plants to make vehicles that will meet the stricter BS-VI emission standards, comparable to the Euro VI standard, which will take effect in April 2020 with a ceiling of 10 parts of sulphur per million.
Minoru Kato, the president and CEO of HMSI, said the company had no firm EV plan for India yet, even though the government is promoting the sector, saying India is a highly price-sensitive market and electric scooters could still be too expensive for most customers.
However, the Indian two-wheeler market still has “big potential” to grow in the next 10-20 years, while Asean countries, such as Thailand, Vietnam and Indonesia, have almost matured.
Honda is planning to launch its new all-electric scooter in Thailand before the end of this year, according to Nobuyuki Aoyama, president of Honda R&D Asia Pacific.
The company believes that two-thirds of the automobiles it sells will be electrified by 2030 and 15% of them will be zero-emission vehicles (either battery or fuel-cell) and 50% will be hybrids.
Honda and General Motors are also teaming up to develop a new generation of batteries. Battery packs, typically the most expensive component of electric vehicles, can cost $10,000 to $12,000 and GM plans to cut this price nearly in half by 2021. GM plans to supply cells and modules, mainly for electric vehicles to be sold by both companies in North America.
This development fits with the Japanese company’s “Honda Mobile Power Pack World” campaign, built around swappable electric power sources that can be used in various vehicles including motorcycles and automobiles.
The swappable power packs are complemented by an “exchanger”, which is a charging station that can simultaneously charge multiple packs and supply replacements at the same time. There is also a portable charger for mobile power packs that can serve as an outdoor power source when needed.
“This concept of the mobile power pack could be the breakthrough for achieving volume and suitability simultaneously in the future,” Mr Aoyama said.
Honda’s swappable mobile battery for small EVs weighs around 10 kilogrammes and can power its PCX electric scooter and the MC- ( MC-beta) EV concept micro-car. Instead of
The concept of the mobile power pack could be the breakthrough for achieving volume and suitability simultaneously in the future NOBUYUKI AOYAMA Honda R&D Asia Pacific
buying a battery, users can subscribe for monthly use. Once the battery runs out, users can go to the charging station or exchanger and swap the battery for a fully charged one at any time, meaning they don’t have to waste time waiting for the battery to charge.
“Under the Honda Mobile Power Pack World theme, we can also use this mobile power pack with all sorts of products from power supply to scooters and micro EVs which, we believe, can form a kind of energy link and a very good way to reach the smart community concept,” said Mr Aoyama.
The PCX, powered by two swappable power packs, will be launched in Thailand later this year, he added.
A Honda salesperson told Asia Focus that the PCX can also be linked to a smartphone app that will
notify the user when a battery needs charging. The app will also identify the nearest exchanger and check whether any full batteries are available there. Fully charged, the two batteries can power the PCX for six to eight hours depending on how fast the driver goes, with a top speed of 90 kilometres per hour.
The price of the bike will be determined by the Thai government’s EV promotional privileges for two- and three-wheelers, now being negotiated by the manufacturer and the Board of Investment.
THREE-WHEELERS & MICRO-CARS
Even without privileges for two- and three-wheeler makers, Thai government support for EVs has already drawn investors to the country. One of them has developed a new spin on the iconic tuk-tuk.
“Now that the government in Thailand is providing some support for EVs with the intention to change the traditional tuk-tuk into an electrified vehicle, we decided to enter the Thai market this year,” said Alix Jiang, general manager of Leabon New Energy.
The company’s electric tuk-tuk, he said, can be used for other purposes besides taxiing but drivers need financial support from the government to make the switch.
Leabon sources electronic parts from China and assembles them in Thailand with a Thai-made body. It is already selling the tuk-tuks overseas, and it used iEVTech 2018 to launch the vehicles in Thailand, where they will sell for 350,000 baht. Most of its customers in Europe and the US are individuals but the company believes there will be a good market in Thailand among hotels, condos, and as mobile food stores.
“In Europe, most people are able to afford [the tuk-tuk] as an extra car because of their higher level of income and government subsidies, so our market in Thailand, at the current price, will be mostly for businesses. Still, it is not that expensive if you consider that a traditional tuk-tuk would already coast you around 200,000 baht,” said Mr Jiang.
“A tuk-tuk driver pays around 6,000 to 7,000 baht per month for gasoline, or around 4,000 to 5,000 for LPG, but it will be only 500 or 600 baht for the electricity, so the government should consider some kind of financial support for this switch.”
Micro-cars powered by electricity, meanwhile, have the potential to reduce traffic congestion along with noise and air pollution in Asean cities, just as they have begun to do in Europe, according to Daniel Borrmann, an EV expert with the Germany-based Fraunhofer Institute for Industrial Engineering.
“As a scientist, I am convinced that the potential for micro vehicles in Asean is very high ... maybe within the next three to five years. They could actually be produced and even engineered in this region,” he told Asia Focus. “I do not see a reason why it should not work here.”
Thailand, one of the top car manufacturers in the world, could easily produce such cars with the current technology it has.
“Micro-cars, similar to tuk-tuks, are not complicated to construct and it is easier to replace the internal combustion engine with an electric drive,” said Mr Borrmann.
“I see no hurdle to designing a new vehicle here. Of course it will not be able to compete with a BMW 5 series but it will be enough to fulfil the purpose, and then you can develop it further and sell it in larger numbers in the future.”
Automakers in Asean have the capability but public money makes it easier as they would not have to carry all the risks by themselves, he added.