Year in Review

Future analysts will point to 2019 as the start of the groundswell in electric driving, certainly in terms of new models. In 2018, virtually all major manufacturers presented a mass-market battery electric vehicle, including PSA and Volkswagen Group. In China, the push for BEVs continued unabated, with more automotive groups launching new, all-electric sublabels. In Japan, the famously hesitant Toyota and Mazda finally got on the BEV bandwagon, while the meteoric rise of Tesla’s Model 3 showed no signs of slowing down. 

2019 was the year of the Tesla Model 3, which at long last became available worldwide. Deliveries quickly quadrupled as a result, and in many markets the BEV is now encroaching on the sales territory of internal combustion engine vehicles. Measured over the first eight months of the year, the Model 3 had a lead of more than 100,000 units over China’s BAIC EU series in global BEV sales.

With permission to begin producing the Model 3 in China and the first U.S. deliveries of the all-new Model Y scheduled to begin by the end of 2020 (Tesla in October even alluded to the possibility of bringing the start of production forward to the summer), next year looks even more promising for Elon Musk’s company.

This has not gone unnoticed by the competition. In 2018, Audi CEO Bram Schot said had it not been for Tesla, the German automaker would probably not have built its e-tron. “Necessity is the mother of invention, and Tesla gave us a wake-up call,” he told Dutch media. 

His statements were echoed by Volkswagen CEO Herbert Diess in late 2019: “We have a lot of respect for Tesla. It’s a competitor we take very seriously. Tesla is not niche.”

German nerves may be frayed by Musk’s announcement in November 2019 of plans to build Tesla’s next factory and an engineering and design center in Berlin. This ups the ante in Europe by a considerable degree.

Potential Penalties Push Production

While Tesla will likely remain the world’s leading BEV manufacturer for some time, electric driving is still very much a Chinese manufacturers’ game, with nine out of the world’s top 20 bestselling plug-in EV constructors in China, and three of those – BYD, BAIC and SAIC – are in the top five.

Not to be outdone, European automakers launched a major BEV offensive in the past 12 months, no doubt also spurred by the 2021 EU fleet-wide average emission target of 95 grams of CO2 per kilometer, which will be phased in from 2020 onward. 

Carmakers face a fine of €95 for every gram over the 95 g target as a fleet average, potentially leading to multi-million euros in penalties. Twenty-one new all-electric models for the European market were presented in 2019 that will all go on sale in the coming months.

Some, including the new Renault Zoe, are already available, while other compact BEVs will be on sale from the first quarter of 2020. Unlike 2018, when vehicles such as the upmarket Jaguar I-Pace made waves, most of the 2019 launches are vastly more affordable. European launches such as the Mini Electric, Opel Corsa-E, Peugeot e-208 and Volkswagen ID.3 will cost around €35,000, competing with a Nissan Qashqai on price. The same goes for the Honda e and the Mazda MX-30.

American and Japanese Giants Behind the Curve 

U.S. automakers, excluding Tesla, risk falling behind in bringing BEVs to market. Fiat Chrysler Automobiles only offers the aging 500e in selected regions, and a mere 10 BEVs are planned across three of the group’s nine labels in the coming five years. That compares with a marque like Audi, which is targeting twice as many BEVs in the same period. 

Ford Motor Co. presented its Mustang-inspired BEV in November 2019, finally joining the electric driving movement with a vehicle designed as a BEV from scratch. The Blue Oval will offer 16 BEVs by 2022, and thanks to a 2019 agreement with Volkswagen Group, Ford will be able to use the German EV architecture in Europe from 2023 onwards. 

GM is targeting 20 BEVs over the next five years; two of those are planned to launch in the coming year under the Chevrolet label. The first of those, the China-only Chevrolet Menlo, was unveiled in November 2019.

While U.S. manufacturers are behind the curve compared with the Chinese and, to a lesser extent, the Europeans, the Japanese are only now heeding the BEV wakeup call. Although Nissan was one of the first global carmakers to catch on with the Leaf in 2010, Toyota and Honda, the third- and seventh-biggest automakers in the world, respectively, launched their first all-electric models earlier in 2019. In October, Mazda followed suit. 

Fork in the Road

All major manufacturers face the major question of how they can roll out a BEV lineup quickly and cost-efficiently. The fork in the road is a vehicle’s architecture, commonly referred to as its platform. Often the most expensive element of a vehicle to design, develop and engineer, automakers will have to decide whether to develop standalone yet modular BEV platforms, essentially constructing EVs from ICE cars, or create flexible platforms that can accommodate a variety of drive trains.

Volkswagen Group went all in on a dedicated BEV platform when it developed the multi-billion-dollar Modular Electric Toolkit (MEB), which will be used by Audi, Volkswagen, Seat and Skoda. Mercedes-Benz’s parent company Daimler and the Renault-Nissan-Mitsubishi alliance are also betting on BEV-only platforms. 

Automakers BMW, Jaguar Land Rover and PSA went the other route by developing a flexible vehicle architecture. In 2018, PSA unveiled its CMP platform, co-developed with Chinese joint venture partner Dongfeng. CMP architecture will be used for ICE vehicles, while the e-CMP will underpin BEVs.

Toyota will go down the same road, platform project chief engineer Koji Toyoshima said in October 2019. It has modified its existing Toyota New Global Architecture modular platform to create the e-TNGA.

Conservative Bets

Arguably, those opting for a flexible platform are playing it safe. While BEV sales have picked up dramatically, they are still nowhere near the level that would warrant major investments in a dedicated BEV architecture, certainly not for the time being. On top of that, electric mobility develops at a different pace around the world. The U.S. market will not shift nearly as fast as China, the world’s largest EV market. 

According to BMW’s forecasts, more than half of new passenger cars sold in China in 2030 will be BEVs. The company puts the figure for Europe and the U.S. at around 25%.

“In 2030, we might have a different approach. But we are not living in 2030, and we believe very firmly this is the right answer to keep the company afloat and profitable,” said BMW CEO Oliver Zipse.

Challenges in All Directions

The costs involved in developing an EV architecture has seen competitors collaborate in an effort to reduce expenditures. In 2019, Ford teamed up with Volkswagen in an effort to gain access to the MEB platform, and Jaguar Land Rover chose to join forces with BMW to advance the transition to electric driving. After a full-blown tie-up between Renault of France and FCA fell through, FCA finally found a merger partner in PSA in late October. 

Automakers at this point face challenges in every direction, with companies under pressure to simultaneously invest in electric driving and autonomous technology, as well as ridesharing and mobility solutions. Additionally, manufacturers face balancing acts not only between the type of platform to pursue, but also whether to continue to pour resources into the development of ICEs. 

Volkswagen has already announced its final generation of new ICE vehicles for 2026, and that its last such vehicle will come off the assembly line in 2040. In September, Daimler said it would pause development work on new conventional engines, focusing on electrification instead. Development chief Markus Schäfe said there were no plans at present to continue ICE development work, although he could not rule out its resumption in the future. 

All About the Chemistry

Perhaps the biggest testament to the growth of electric driving came in October, when the Nobel Prize for chemistry was awarded to the team responsible for the development of the lithium-ion battery that powers today’s BEVs, among other applications.

According to David Labrosse, head of product planning at Hyundai Motor Europe’s technical center, the car industry in 2018 used about the same number of lithium-ion battery packs as all other industrial sectors combined. “In 2030, we will need 30 times as many batteries in the car industry,” he said.

The next stage of development will be toward mass production of so-called solid-state batteries. These batteries contain a non-flammable solid electrolyte, as opposed to a liquid organic electrolyte, thus eliminating the fire risk that has plagued Tesla of late. They do not require cooling either, further improving safety and reliability. 

At present, the technology is held back by a high resistance at the electrode-solid electrolyte interface, which hinders fast charging and discharging. Japanese researchers have developed solid-state battery packs with a low interface resistance. Utilizing ultra-high vacuum conditions, batteries were fabricated in such a way as to keep electrolyte-electrode interfaces free of impurities.

If successful, this technology could deal another blow to lubricant marketers hoping to transition to battery coolants to offset a potential decline in engine oil sales. 

At the 2019 Tokyo Motor Show, Toyota announced it would introduce a working prototype fitted with this solid-state holy grail in battery technology. The vehicle will be put into service during the 2020 Tokyo Summer Olympics.

The technology will not be rolled out across Toyota’s BEV lineup anytime soon, though. According to Chief Technology Officer Shigeki Terashi, solid-state batteries will not be ready for mass production until 2025. Other manufacturers, including BMW, do not expect the technology to be viable for another five years after that.