eMobility and Fleet Electrification: Where Are the New Profit Pools?

It’s hard to tell what Robert Anderson was thinking in the 19th century when he used crude oil to generate power in a proto-battery, then strapped it to his carriage to ride about town. (Look, peasants, it moves without a horse!)

But probably Anderson never thought that his idea would go mainstream two centuries later.

The demand for electric vehicles (EVs) went from non-existent to dominant in less than two years. But the biggest thrust forward will happen in the next five to ten years, as governments around the globe have announced ambitious eMobility targets for 2030.

But what does mass fleet electrification mean for private businesses and the consumers they serve? Should only automotive and transportation companies get both excited and concerned? Let’s dive in.

What is eMobility?

Electromobility (eMobility) refers to the progressive transition to using electric propulsion technologies and connected infrastructure to enable mass electrification of private, public, and commercial vehicles.

Given that we’ve been using gasoline-fueled cars for a century, orchestrating this change is no small task. From convincing consumers and businesses to switch to e-vehicles to setting up supporting physical and digital infrastructure, there’s a lot to do.

Key enabling hardware technologies:

• Electric powertrain technologies for battery electric vehicles (BEVs), hybrid e-vehicles, and soon fuel cell e-vehicles
• Improved energy storage — home, commercial, or grid-scale batteries, thermal storage, etc.
• Demand-side energy management technologies — robust power grids, e-charging infrastructure, etc.
• Energy supply and delivery management technologies for advanced distribution network management, load management, and systems controls

Key enabling digital technologies and solutions:

• ADAS systems for semi-autonomous and autonomous driving, plus platooning
• Advanced mobility analytics — big data analysis, IoT, telematics, predictive analytics solutions (such as for battery analytics)
• Digital twin technology for advanced transportation scenario modeling, predictive maintenance, and remote diagnostics
• In-car connectivity to support operational and value-added services such as parking management, traffic management, on-demand mobility services, and shared mobility
• New cybersecurity solutions to protect connected vehicles and infrastructure

What are the implications of mass fleet electrification?

An electric car is still a… car. It gets you places and helps transport goods. But it has lower emissions and different fueling needs, plus a greater degree of connectivity.

These attributes have profound implications for transport management. Connected electric vehicles can be managed with higher precision through over-the-air updates, IoT sensors, remote diagnostics, and telemetry data analytics.

• For regular drivers, this means access to real-time traffic information, better navigation, connected parking management, and easy asset sharing.
• For commercial fleet managers, eMobility technology provides the opportunity to track, coordinate, orchestrate, and maintain vehicles from a central control panel.

Furthermore, the effects of transport sector electrification will cascade into adjacent industries: automotive, construction, energy, telecom, and retail.

The e-Mobility transformation will disrupt more than the automotive industry

Source: McKinsey — Why the automotive future is electric

When eMobility solutions go mainstream, a lot of changes will follow:

• Lower operating costs. EVs are estimated to save their owners $6,000 to $10,000 in total cost of ownership over the vehicle’s lifetime. For large fleet operators, this can translate to millions in savings.
• Reduced CO2 emissions/pollution. Manufacturing an EV currently generates more emissions than manufacturing a traditional car. But over time, an EV’s superior energy efficiency offsets these higher environmental costs. Even with no changes in the manufacturing process, driving an electric car will be better for the environment in 95% of the world.
• Phased out dependence on fossil fuels. Fossil fuels are finite. Plus, they are a source of geopolitical tensions. Energy independence is easier to achieve. Plus, electrification has accelerated research into alternative fuel options such as fuel cells, hydrogen, and non-fossil methane.
• Increased demand for electricity. Understandably, mass adoption of electric mobility solutions will hike demand. New approaches to energy management and grid transformations will be required before more EVs hit the roads.
• Greater degree of innovation in the public mobility sector-, courtesy of e-vehicle connectivity. Connected e-cars can be integrated into the mobility as a service (MaaS) ecosystem to progressively transition from asset ownership to shared, on-demand use.

Value-added eMobility opportunities

If there’s one thing regular folks and government regulators agree on it’s the desire for zero-emission mobility.

2021 was another record year for e-car sales globally, with 5.6 million units sold. That’s a 168% increase from 2019 sales volumes and an 83% bump from 2020.

At the same time, the new EU “Fit for 55” program has set a target for reducing net carbon emissions by 55% by 2030. Changes to the transportation sector occupy a good chunk of that proposal.

The US government has set the target of a 50% e-vehicle sales share by 2030. China has mandated that automakers ensure EVs reach 40% of all sales by the same year. In both cases, these percentages include both commercial and private vehicle sales.

These sweeping changes affect every industry that relies on vehicles — and require them to adapt.

Mass fleet electrification and subsequent CO2 neutral mobility open new possibilities for growth not just for businesses in the automotive and transportation sectors but for mobility startups, fleet management software providers, OEMs, and logistics companies.

Electrification and other disruptions are shifting value pools

Source: McKinsey — Global emergence of electrified small-format mobility

Here are some emerging value pools to consider.

E-hailing and electric carsharing

To some extent, electrification is imposed on e-hailing and carsharing companies. But their commitment to government emissions targets also leads to other returns such as lower vehicle operating costs and more positive consumer perceptions of the brand that goes green.

It should be unsurprising that ridesharing companies all over the world are making fleet electrification pledges. Uber, Lyft, Ola, and Didi are already on board.

But electrifying ridesharing fleets requires a lot of consolidated effort. Persuading drivers and subsidizing the switch to EVs, increasing prices to offset the capital expenditures, and convincing consumers to pay green surcharges are just the tip of the iceberg.

Uber alone has said they plan to meet the imposed emission reduction targets by:

• Paying higher fares to drivers and giving riders discounts for green trips
• Partnering with other businesses to improve EV charging costs and speed
• Launching a multi-modal journey planner across cities, allowing riders to switch transportation modes

Other eMobility providers are dealing with similar challenges and can be open to involving more partners (tech and business) in their ecosystems to facilitate the transition.

Charging infrastructure

A lack of fast and reliable e-vehicle charging infrastructure is the biggest barrier to mass eMobility adoption.

Top five barriers to EV adoption

Source: IEA — Trends and developments in electric vehicle markets

Yet for regulators, this seems to be a chicken and egg problem: Do we build more charging stations to encourage use, or do we build out infrastructure as ownership grows? Due to shaky regulations and pricing structures, the private sector is also reluctant to invest in charging infrastructure.

So what are the areas of responsibility for each player?

• Authorities need to streamline the planning and installation of public charging infrastructure. The planning process can be improved with the use of geospatial data. Also, incentives and subsidies should be provided to private players constructing or hosting charging stations on their premises.
• Utility providers need to simplify the grid interconnection process for adding charging stations and introduce competitive (likely dynamic) pricing for different types of charging scenarios (fast, overnight, etc.). This will require better internal big data analytics solutions as well as more complex technological transformations of energy management systems.
• Automakers will have to reach a cross-industry agreement on charging standards to ensure better interoperability. Also, they will need to develop solutions for accurate battery life predictions, remote diagnostics, and servicing — as well as consumer-facing products for navigating and conveniently paying for charging.
• The transportation industry — composed of commercial fleet managers, public transport companies, and private TCNs — will have to work closely with the above groups to ensure that the proposed options meet all their needs. Plus, they will need to gear up with better transportation management systems to benefit from the new degree of connectivity EVs offer.

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Electric micro-mobility

“E” isn’t just for cars — we also have e-bikes, e-scooters, e-motorcycles, and more. Global sales of two-wheel and three-wheel EVs have increased by over 14% annually.

Who drives the demand? Private owners and sharing platforms. Personal micro-mobility solutions saw a boost during the pandemic as people ditched public transport for alternative options. Then the trend was propelled by micro-mobility sharing platforms, estimated to grow at a CAGR of 13.7% from 2021 to 2028.

Yet the road to electric micro-mobility expansion has been bumpy too. Lack of physical infrastructure and lack of regulations are two well-known issues. But there are several other hurdles micro-mobility companies have to clear:

• High rates of asset damage and theft. In Paris, up to 1,000 shared city bikes are stolen or vandalized each week. Bird has similar issues with e-scooters in Mexico and Chile. Providers need to come up with more creative asset tracking and user verification solutions to prevent such scenarios while maintaining an easy rental experience.
• Short lifecycle. This is primarily due to limited battery life, recharging capacity, and the complexity of maintenance. A short lifecycle, in turn, results in frequent (and often unregulated) asset disposal, which dissatisfies regulators. Micro-mobility providers are grappling with these issues in several ways. Some like Okai have launched electric scooter models with swappable batteries and incentives for users to drop batteries for charging at a nearby location. Others are working with technology partners on developing remote battery analytics solutions to improve battery shelf life.
• Integration with other transportation nodes. To further grow adoption rates, micro-mobility companies (similar to ride-hailing companies) will need to partner with other transportation players. Thus, building out an open API ecosystem will become a crucial step for securing a spot in urban MaaS ecosystems.

On-demand autonomous e-transportation

Both private companies and public authorities view electrification as a stepping stone towards the connected autonomous transport of the future.

Reduced reliance on human drivers can not only trim operational costs but also:

• Extend transport network coverage
• Connect smaller communities to urban hubs
• Increase transport working hours (24/7)
• Reduce traffic congestion
• Speed up last-mile deliveries
• Improve road safety

It follows that many marvelous pilots are underway. Copenhagen, for example, plans to deploy autonomous public transport in the currently constructed Nordhavn district. At present, the authorities are testing an autonomous shuttle loop with six stops. The shuttle will be integrated with other public transport options through a “mobility cloud” that riders can access via an app to book and pay for a ride.

In Lyon, France, public authorities in partnership with NAVYA are also testing an autonomous e-shuttle service in one neighborhood. In the meantime, Seoul, South Korea, has installed 5G-powered ADAS systems on all buses and taxis as a push towards adopting V2X connectivity — one of the key enablers of the autonomous e-transportation future.

At the same time, autonomous e-vehicles require advanced software for:

• Real-time environment analysis and instant decision-making
• Route (journey) building, coordination, and supervision
• Connected ticketing experiences and integration with other transportation nodes

All of the above are complex and labor-intensive projects requiring cross-functional expertise in AI (deep learning and reinforcement learning), IoT, location-based services, and HMI development.

eMobility reality check: what challenges need to be solved?

An electric autonomous shuttle picks you up next to your home to drive you to your shared vehicle for the day (prepaid and with no parking hassle!). This is the “green” future we’d all like to see one day.

But it won’t happen in one beat. The transition to eMobility requires meticulous eMobility engineering of both digital and physical infrastructure.

And as we’ve mentioned, this is a job shared by different players (which doesn’t make things easier).

Is there any way your business can contribute? Yes, if you’re keen on addressing either of the following challenges.

Better route planning for e-vehicles

Electric car range anxiety is a big holdup for both commercial fleet operators and private EV owners. No one wants to get stuck mid-road on an e-bus because the battery just… died.

So while charging infrastructure is under (moderately) rapid construction, you can work your way in by offering better route planning solutions for operators. Specifically, consider features such as:

• Range confidence, which assures drivers that the set distance can be covered
• Multi-stop route planning with the ability to fast-charge midway
• Adaptive battery charging based on a driver’s usage patterns
• Built-in navigation to nearby charging stations and connected payments
• Self-service driver tools for booking charging slots and managing billing and payment plans
• Built-in multimodal trip planner to direct drivers and passengers to alternative modes when the vehicle will soon run out of charge

Battery performance and analytics

EV batteries remain the weakest link in eMobility driving solutions. Much research is focused on improving the hardware. But software too can help improve battery performance while we wait upon bigger innovations.

Batteries generate a wealth of data during production, testing, and in-vehicle use. Yet most battery management systems (BMSs) capture only a fraction of it. So operators have limited knowledge about a battery’s performance and response to environmental factors over its lifespan.

How do you learn about these things? By combining these three technologies:

• Cloud computing
• Big data analytics
• IoT sensors

Jointly, these can be used to create digital twins of physical EV batteries.

A digital twin is a virtual representation of a physical asset powered by real-time data collected from edge devices and operational software.

Digital twins of EV batteries can collect data from BMSs, plus other sensors, to analyze battery performance during testing and use. Once data is collected, you can generate a digital twin to simulate battery performance under different conditions. This allows you to track battery aging, failure, or malfunction rates — and then fix things.

A joint project by battery analytics specialist Silver Power Systems (SPS) and Imperial College London recently found just how effective digital twins for EV batteries can be. The group collected data from over 500,000 kilometers of journeys made by e-cars using IoT sensors. Then they injected the data to an ML-powered cloud platform to generate digital twins, offering a real-time view into battery performance across multiple parameters. By doing this, they gained knowledge for improving performance!

Digital twin technology could also help:

• Predict battery lifespans for different types of e-vehicles to improve servicing
• Optimize battery charging patterns and schedules to extend the battery life cycle
• Introduce self-healing capabilities to new battery types
• Better coordinate maintenance and servicing of large e-fleets

Intelligent transportation management

The transition to electric public transportation fleets will require upgrades to traffic management systems.

Arguably, the most turbulent period will be when public authorities have to manage a hybrid fleet of diesel-fueled and electric vehicles. Since each has drastically different “fueling” needs, both route planning and transport management will have to be adapted.

Connected e-vehicles also produce more data, which will need to be securely stored and exchanged among different operational subsystems and, soon, connected road infrastructure.

Legacy transport management systems lack connectivity and data management capabilities eMobility will demand. So there’s going to be a surge of interest in cloud-based, high-load tolerant, and secure intelligent transportation management (ITM) systems.

V2X connectivity

New-gen ITMs will have to also perform the function of “routers,” disseminating real-time information on traffic conditions and dynamic rules among all road actors.

Vehicle-to-everything (V2X) is an umbrella term for all the means of connectivity that can be used to establish such cooperation. These include cellular connectivity (4G/5G), onboard computers, roadside sensors, and other edge devices.

Implementing all of the above sounds like a complex project, which it is. But the gains from connecting every player in the eMobility sector with one another are huge too. Especially if we are ever to welcome a future of autonomous transportation.

Take it from the Smart Mobility Living Lab (SMLL) in London, a government-backed entity in charge of deploying a 5G network for all connected vehicles and infrastructure. The lab has already hosted several successful trials for connected, (semi-)autonomous transport. O2, a partnering mobile operator, reported on the projected benefits from mass V2X adoption:

• At least 10% reduction in transit times
• £880 million in reduced operational costs
• Up to 370,000 metric-ton reduction in CO2 emissions per year

Racing towards green

Aggressive net-zero targets set this year by governments around the globe have prompted transportation companies to make electrification pledges too. But now we’ll have to collectively deliver on them. And execution is always the trickiest part.

Mass fleet electrification across the private and public sectors will happen — that’s certain. The question is how many detours (and losses) companies will have to take en route to the greener future. Especially when success depends on the ability to collaborate and integrate with other industry players. After all, the value pools are no longer just in the hands of automakers but with data, tech, and consumer-facing service providers too. What will be your role in electrifying the future of transportation?

Interested in eMobility? Contact Intellias to discuss how we can implement your idea.