By 2030, electric vehicles will account for about a quarter of all cars and trucks on the road 50-60% of new car sales. According to a survey by Boston Consulting Group,electrification of transport it could generate between 3 and 10 billion dollars in added value over the next decade for an average utility with around 2-3 million customers. A figure that includes the return on investments to improve the electric grid (about 1.8-6,2 billion dollars), the activities in support of the policies of the authorities on electric mobility (about 50 million - 1 billion dollars) and the revenues resulting from the offering of new products and services related to electric vehicles (from 1,3 to 2,9 billion dollars).
Utilities - the BCG survey reveals - must prepare to respond to the new energy needs created by the electrification of transport and to play the role of both guides and beneficiaries of this transition, immediately starting to move in three directions. Firstly, in upgrading the infrastructure of the electricity grid, which must be able to handle any overloads in times of greatest energy demand. It will also be important to support the efforts of the authorities to encourage electric mobility, proposing new rate plans, discounts and promotions. Finally, they should take action to enter new markets with products and services designed for electric vehicles, such as the installation, maintenance and commissioning of charging systems.
Falling battery costs – Among the factors that will push the growth of electric vehicles in the next decade, technological progress will have a significant weight, which is causing a rapid decrease in battery costs. The cost per kWh of a battery (the largest item in the total cost of owning an electric vehicle) for hybrid and full electric cars and trucks has dropped from $700 in 2009 to about $150-175 at the end of 2017 and is expected to decline further up to about $70-90 in 2030. BCG estimates that by 2028, the five-year total cost of ownership for an electric vehicle battery in the United States will be lower than for an internal combustion engine vehicle.
Strengthen the electricity grid – Investments in electricity grid infrastructure will focus primarily on grid capacity (ie the amount of energy that can be supplied at any given time) rather than increasing overall electricity generation. According to BCG estimates, the penetration of electric vehicles will have a limited impact on total energy needs (including residential, business and industrial uses) through 2030. But significant increases in certain locations and at times of high energy demand could put excessively straining the capacity of the current electricity grid.
The investment required to push the transmission and distribution capacity required by an individual utility will depend on how well utilities are able to encourage electric car owners to charge their vehicles during periods of low demand and in locations where grid capacity does not it's under strain. If the battery market share for electric cars jumps from 1% to 15% from 2019 to 2030, BCG estimates that the necessary transmission and distribution improvements will require $1.700 to $5.800 for each electric vehicle that connects to the grid. depending on when and where people put it on charge. It means a cumulative value generated by power grid upgrades for an average utility by 2030 of between $1,8 billion and $6,2 billion.
The strategy for electric mobility – The diffusion of electric vehicles and the development of electric mobility draw a positive scenario for utilities, which can attract new customers and at the same time support the political and environmental objectives of governments. But utilities will need to clearly communicate to regulators how their plans align with the overall goals of the regulation and stimulate the market with specific tariffs for electric cars, assistance to customers choosing these vehicles, discounts and promotions, and the construction of ready-to-use charging infrastructure. As more electric vehicles are being charged, the electricity load will increase. Forward-thinking utilities are starting to implement low rates for off-peak EV charging. They are also starting to experiment with dynamic pricing through smart charging points to shift charging towards periods of low prices. BCG estimates that the added value generated by support for electric mobility would be between $50 million and $1 billion through 2030, equal to between $50 and $950 per electric vehicle for an average utility, depending on the different regulations in the various jurisdictions and of the different consumption groups.
Electric vehicle services to enter new markets – E-mobility creates opportunities for new products and services for utilities, including vehicle maintenance and operation, installation, operation, maintenance and service of charging points, software solutions for energy management and fleet start-up, and consulting services. The penetration of electric vehicles is not yet such as to justify an immediate effort by utilities in recharging infrastructure, which would have very low usage rates and which would hardly be sustainable without public subsidies. To feed an ecosystem that supports the demand for electric vehicles, utilities could partner with vehicle manufacturers and large fleet owners or offer new value-added services, such as charging alongside parking, technical assistance, parcel delivery , maintenance and repair. Assuming that each electric vehicle travels approximately 13 miles per year, BCG estimates a cumulative value of new electric mobility products and services of between $3.400 and $7.400 per electric vehicle from 2019 to 2030, for a total value approximately $1,3-2,9 billion for an average utility with 2-3 million customers.
The challenges to overcome – The first to act will have more possibilities to exploit the opportunities offered by electric mobility and there are already other players, such as some companies in the automotive and oil & gas sectors, who are ready to invest. To position themselves at the center of the ecosystem and influence the policies of the authorities in the sector, utilities must first align their vision and strategy with those of all the stakeholders involved. The second step will be to build a network of partners to help them expand their offering of electric vehicle-related products and services, initiate new collaborations between different business functions and coordinate efforts on electric mobility programs. It is also essential to develop new skills to launch new electric mobility projects, such as the design of charging infrastructure, data analytics capabilities, customer experience and management of B2b sales processes. Lastly, since these are often very competitive and unregulated activities, the ability to shorten the planning and implementation times of investments and projects will be decisive.
