A future without oil

With the death knell sounding for gas-guzzlers, will batteries or hydrogen become the automotive power of the future? James Ashton weighs the evidence

Sector Focus. Tesla leads the way in electric cars.

The nation’s two largest carmakers, Toyota and Honda, both have fuel-cell cars on the road. They might even use them to transport athletes around Tokyo once the Olympic flame has been lit. The technology has been stuck in the slow lane but experts think its effectiveness may help it to pull ahead in the long term. Because the hydrogen is transformed to electricity by an on-board fuel-cell engine, these cars require smaller batteries than their electric rivals whose power is generated elsewhere and then stored in a battery pack.

Shinzo Abe, the Japanese prime minister, wants to see 40,000 fuel-cell vehicles on the road by 2020. That will only happen if today’s handful of refuelling stations is radically scaled up. “This is the car of a new era because it doesn’t emit any carbon dioxide and it’s environmentally friendly,” Abe said in 2014 when announcing generous subsidies designed to woo drivers. “The government needs to support this.” His target may not be so outlandish. Research from the Centre for Future Studies said last year that the UK could operate 1.6m hydrogen cars by 2030.

The rise of the electric car

One thing is for sure: gas-guzzling cars have been put on notice by consumers and civic leaders who want to breathe more easily. Electric car sales have been rising sharply in the UK, up from 500 per month in the first half of 2014 to almost 4,000 per month in 2017 according to the Society of Motor Manufacturers and Traders. Many of the electric cars on the road are hybrids which combine batteries, electric motors and internal combustion engines. Since October, older petrol and diesel cars that do not meet minimum Euro emission standards have had to pay the £10 per day T-Charge to drive into central London, on top of the Congestion Charge. By 2040, they will no longer be sold in several countries including France. It leaves motorists with a quandary. Because buying a car is second only to buying a home, they don’t want to shell out on unproven technology that might be discarded by the industry in a couple of years’ time.

“You have to match the convenience of the gasoline car in order for people to buy an electric car,” Tesla CEO Elon Musk has said. The company leads the way in achieving that aim, but it's not alone.

The big issue is: who will build the estimated 3m charging points needed in Western Europe by 2030?

The China syndrome

The Chinese also fancy their chances at electrifying the car market. Start-ups including Weltmeister, NextEV and Future Mobility, which was co-founded by ex-BMW and Nissan executives, have all enjoyed generous funding rounds. The dominant automakers are getting there too, but their problem is working out how much capital to divert towards electric car development while trying to protect profit margins.

“I don’t think we should walk off a ledge where we destroy the earnings power of the company,” Ford chief executive James Hackett commented recently. His company plans for a third of its vehicles to still have internal combustion engines by 2030.

By then, there will have been a breakthrough in battery life. To date, larger batteries can cover a range of up to 300 miles, enough for 95% of car journeys, so motorists shouldn’t have to worry about anything other than a tyre going flat. But questions remain about charging times. Tesla recently unveiled a haulage truck it claimed could add 400 miles of charge in as little as 30 minutes – enough time for a bacon sandwich break at a truck stop. Experts at Aurora Energy Research said to do that the charger the truck uses would require the same energy as 4,000 homes.

The usual suspects such as Samsung and LG sense an opportunity in creating the next generation of batteries. Newer, specialist entrants are also causing some excitement. Companies such as Cadenza Innovation and Australia’s Syrah Resources are incorporating substances such as graphite and graphene into lithium-ion batteries to see if they can improve energy density and drive down cost.

Positively charged

And then there is the big issue of who builds the up to 3m charging points that analysts from Morgan Stanley estimate will be needed in Western Europe by 2030. Royal Dutch Shell announced recently it would install 350KW fast-charging points from Ionity at 80 of its biggest petrol stations. Ionity is a joint venture formed by BMW, Daimler, Ford and Volkswagen with Audi and Porsche that aims to reach 50% of all petrol stations by the end of the decade. There are start-ups in this segment of the market too, such as InstaVolt, which has raised £12m to put in 3,000 charging points of its own.

So the race is on. Who ultimately wins as the car industry remakes itself will depend on high-tech brains as much as financial brawn.

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