Sunday 21st July 2019

Electric vehicles can charge our economies but there’s a lot of EV lifting to do before we clear the air

Published on January 30th, 2019

If you want to know anything about any market, the best people to consult are the risk assessors.

It doesn’t matter if they are lawyers, insurance underwriters or spread betters, they know everything, says freelance technology writer, Nick Booth. They have to or they’d lose their house. The risk obviators of The City have all kinds of intelligence feeds, which are fed into brains that can justify fees of £500 (€575) an hour.

Sadly, unlike journalists, they are generally quite tight-lipped and unlikely to share these valuable nuggets. So I’m indebted to Ragi Singh, the head of the EV Sector team corporate partner at legal practice Gowling, for the perspective from Britain’s car-making heartlands.

By necessity, Gowling is all over every aspect of the EV industry like a hungry polar bear on a bin bag. It has to legislate for everyone: car makers, software developers, battery designers, chargers, component makers, battery recyclers, power brokers and every level of the supply chain on which the local economy will survive. As a lawyer Singh can make everything end in Tiers (namely Tier 1 and Tier 2).

Onward march of the EV

“We specialise in dealing with the issues faced by power and network providers and the OEMs (original equipment manufacturers), whether they are traditional [car makers] or non-traditional,” says Singh. Singh advises clients on the march of the EV and he sees them dominating for at least half a decade. But will the investment be rewarded if Hydrogen is the future?

Deborah Harvey

If the business of Gowling’s EV Sector team is anything to go by, the electric car industry has a good decade of legal business ahead of it. The vehicles themselves are mostly battery, and it’s not just the cost that is the problem, but the mystery surrounding them. It’s hard to create leasing contracts for EVs when the depreciation of the asset is difficult to quantify accurately.

All eyes are on every aspect of the battery and power distribution. Gowling has a mining resources team that advises on getting the necessary minerals out of the ground and on disposing of these raw materials when the time comes.

The engine of an EV has 30 parts, whereas a combustion engine has 3,000. The lack of moving parts mean that lower running costs will eventually prove very persuasive for EV sales. Gowling’s intelligence sources suggest that the cost of making EVs is falling by a fifth every year. The manufacturing price – as measured in dollars per kilowatt hour – of an EV was $1,000 (€874) in 2010 but it currently stands at $176 (€153), edging ever closer to the $100 (€87.4) tipping point.

How will our infrastructures cope?

Drivers will soon adopt the requisite refuelling culture (see IoT Now Transport column) needed for EVs. All we need is the physical infrastructure.

This is where the IoT industry has its work cut out to make the case for EVs, based on the reliability of the infrastructure. According to one of the charging providers, Pod Point, EV drivers are already adding to peak time power congestion by plugging their cars into the grid the minute they’ve commuted home from work. How will our infrastructures cope?

Will this be a race against time? Britain has had a relatively low adoption rate of electric cars according to the EV Readiness Index 2019 research from LeasePlan.

Ragi Singh

The UK only has 0.27 charging plugs per 1,000 inhabitants whereas the top adopter, Norway, has 4.5 – and that’s in a country with battery-punishing hills and freezing temperatures.

The difference is that Norway gives tax breaks on electric cars that make them the same purchase price as a petrol engine. If the UK government one day provides a similar tax break and the manufacturing costs of EVs simultaneously drops, there could be a massive surge in demand.

Can we cope? UK Power Networks, the electricity distributor for London and South East outlines its long-term strategy here I’m none the wiser, are you? One year after it launched its Active Response how ‘smart and proactive’ are its networks in moving capacity around? Are we there yet? Who knows, the lawyers have the inside view. So let’s get Deborah Harvey, associate director specialising in Energy & Utilities at international legal practice Osborne Clarke LLP, to sum up.

“The legal landscape needs to evolve to support progress in automotive design and intelligent transport systems,” says Harvey. “Whether EVs themselves represent the end game, or just a stepping-stone, is still open to question,” she concludes.

It all hinges on how well the IoT industry legislates for change.

The author is freelance technology writer, Nick Booth.

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