ASHISH NARAYANAN is Manager, Strategic Business Development – Automotive, QuEST Global
We are already in the second decade of the 21st century, and whether electric vehicles (EV), the future of commute, will hog the mainstream global automobile market remains a debatable topic even now. With EV manufacturers looking at viable options to overcome market challenges, can the Blockchain technology and its promise of peer-to-peer energy contracts optimise key business processes and iron out the hurdles for them in their way forward? Here’s a sneak peek into the future of EVs.
CHALLENGES FOR EVs?
While demand for EVs are driven by an increase in demand for fuel-efficient, high-performance and low-emission vehicles, the high manufacturing cost, low fuel economy and serviceability pose serious hurdles along with the market growth path for EVs. These challenges can be summarised as below:
Range: Range in itself makes the electric car unusable for a majority of people. The common man’s EV – the Nissan Leaf 2019 – claims to run almost 320+ km on a full charge. However, that mileage figure can only be achieved with careful driving. As the range becomes limited, the journey gets restrained.
Time: The availability of EV charging stations remains a key barrier to market penetration. In the case of the Leaf, once the battery is depleted fully, it can take up to 20 hr for a complete recharge from a 120 V outlet. On a 240 V outlet, it takes seven hours, and a 480 V fast-charge station can take just 30 m for a recharge. In our ‘instant gratification’ broadband society, even a wait of 30 m could seem to be an eternity.
Space & Real Estate Cost: An estimated average of 1-1.5 mn cars seem to be running in New York city alone, and if 25 % of the vehicles need to get charged, imagining 30 m each from a fast-charging station, can the city’s charging stations afford to have the space to park so many cars? Additionally, there are as many buses, motorcycles and other motor vehicles. The real estate cost is around $ 5,000-10,000 per square foot here, which basically means the amortised real-estate cost is going to be higher than the real energy cost.
Charging Infrastructure: In addition to these challenges, what truly plagues electric cars in the current scenario is the lack of charging infrastructure. The partner agencies would definitely need to build more charging stations, at least three-fold than the currently available gas stations.
Cost/ Affordability: If a normal vehicle user wishes to buy an EV, he/she would have to use it for a minimum of 160,000+ km to match the extra money he/she has paid on its electric version, which could take years to recover. The most important cost component of an EV is its battery package. And 40 % of the vehicle cost goes to its battery pack, which is around $ 35,000! If your battery gets damaged after the warranty period, which is usually four years, you would have to shell out $ 35,000 again and that is enormous amount of money as compared to a gasoline engine.
Environment: The EV revolution as well as individual ownership of the car and the battery will pose another unprecedented environmental challenge. The ‘use-and-forget’ type of battery packages will be soon piled all around, with no specific ownership. Since EVs will be charged from the grid, it will consume more fossil fuels and indirectly impact the environment.
COLLABORATION WITH EVs
The challenges mentioned do not affirm that the future of EVs is bleak. The silver lining comes in the form of a few practical measures that help overcome these challenges. Let us have a closer look:
Battery Swapping: Battery Swapping is definitely a buzzword – it is exactly like replacing a calculator battery with minimum time and effort, when it dries out. Some automakers have already proposed such a model for their EVs, but we are yet to see real momentum on this front.
Standardisation: The basic requisite for any interoperability models is standardisation. And the same is the case for automobiles. Like the normal AA, AAA type battery cells, if the EV manufacturers can come up with standard size battery packs, battery replacement can be done from any gasoline station, in a matter of minutes. This also gives freedom to the end-users, as they no longer need to stick with a unique supplier/ maker, which also means cost benefits and oligopoly.
ADAPTIVE BLOCKCHAIN-BASED APPROACH
We did talk about a standard design for EV batteries, independent of the OEMs and vehicle models. But how we can operationalise it? In an ideal situation, when an EV battery is draining out, the user can drive into the nearest battery swapping station and replace the battery with a fully-charged one. Here, Blockchain’s core technology proves to be efficient in the secure management of large volumes of transactions in distributed networks.
Central Battery Grid: When it comes to swapping batteries, will any user be ready to swap his/her one-month-old battery with a five-year-old one? To overcome this, we can think of moving all the EV batteries to a central grid (country-based) or moving the battery ownership from an individual car owner to a certain agency. Thus, the car owners need not worry about the battery, its life time, charge cycles, how old/new it is! They just have to pay for the energy they buy from the company. All these are linked to Blockchain and the battery swapping gets registered and updated on Blockchain that will enable the users or authorities to track the different stages of the battery right from its life to movement from one user to another.
Existing Infrastructure & Real Estate: Blockchain empowers the current oil providers to own and operate the Central Battery Grids. The existing gas stations and instructors can be easily converted into battery swapping stations, considerably reducing the infrastructure cost.
Amortised Cost: As EV owners are virtual owners, they pay only the amortised cost of the battery every time they swap it. Thus, the overall cost can be in terms of paise/km usage.
Recycling & Environment: As the complete battery movement and transactions are controlled by central grid companies, they can be accountable, and can easily manage the recycling of old batteries, without posing any hurdles to EV owners.
Better Driving Solutions: By leveraging the solutions of Blockchain across EVs in the automobile industry, OEMs can now transform their businesses ahead of the new industrial wave. OEMs would need to take a cue from the recent market trends and partner with product engineering service providers, who can harness the potential of innovative technology in the traditional automotive ecosystem.