17/08/2020
The Automotive Group at Reddie & Grose recently held a virtual round-table with a select group of experts in the industry. We had representatives from an electric vehicle start-up, an energy services company, an automotive funding platform, an energy and sustainability strategy consultancy, the IMechE’s Powertrains and Fuels group, and a barrister who is a specialist in the law of Connected & Autonomous Vehicles.
We set ourselves the ambitious agenda of discussing the likely key technologies to emerge in the next 10 years in powertrains, energy storage and delivery, autonomy, and sustainability, and whether there would be any legal challenges to overcome, IP or otherwise.
With the long list of discussion topics in mind, we jumped off from the UK government’s proposal to end the sale of new petrol, diesel and hybrid vehicles by 2035, or even 2032. What would that mean for the industry, and would it be effective at reducing greenhouse gas emissions? The conversation flowed from there …
As you might expect, most of the group did not believe that the “simple” banning of IC engines by as soon as 2035 would achieve the desired result, the problem is far more complex. In addition, the legislation to date for EVs and indeed AVs was considered piecemeal, with automotive OEMs, insurance and energy companies filling the gaps where there were concerns. There were also some comments about how governments legislating for the long-term, where a future government has to deal with the repercussions, rarely turns out well, but we will leave the politics for another time …
Despite the reservations, it was interesting to hear from the representative from the EV start-up that the public, and businesses, were ready to buy battery electric vehicles (BEVs). Nevertheless, there was resistance to doing so because of two main issues: 1) high upfront costs, and 2) lack of universal charging infrastructure.
Although innovation is taking place to reduce the upfront costs, it was felt that government assistance is needed, at least in the short-term, to enable the transition away from IC engines.
A clear factor here was also the public’s expectation of their vehicle. The average private car is bought not based on the most common use case, but on the annual 250 mile trip to see Granny. If the car cannot get there and back on a single tank of fuel, while carrying the kids and accompanying paraphernalia, then it is not “fit for purpose”. With a BEV, this means carrying around significantly more battery capacity than is needed most of the time. As one attendee put it, that means a “double whammy” – the vehicle is larger and heavier, thereby requiring more energy to get from A to B and therefore still more battery capacity, and the additional weight increases tyre and brake wear, increasing the pollution caused by these, often less considered, components.
Even when considering commercial vehicles, where total cost of ownership is a bigger factor, the upfront costs, coupled with the lack of infrastructure, mean that BEVs are often considered too high a risk to take for business; the balance is clearly shifting though, in particular so that companies can meet their CSR requirements.
The other main issue of lack of universal charging infrastructure was also seen as an issue that government could and should be assisting with more. Although not discussed, the government does have various initiatives, the on-street residential chargepoint scheme (for councils), workplace charging scheme (for business), and EV homecharge scheme (for individuals), and so perhaps the issue is more the charging points being “universal”. That does seem to be the case when looking at the confusing number of connector types (some of which are proprietary), and types of charging (rapid, fast, and slow) – “universal” is not yet a word that can be applied to the EV charging infrastructure. This also potentially puts the brakes on investment as investors are wary of assets being stranded in the losing technology – VHS vs Betamax anyone?
As well as government, this was also seen as an area where large energy providers, Shell, BP, and the like, could step in and invest, although the conflict with their existing business model was acknowledged. And, that does seem to be happening, Shell have acquired NewMotion, an EV charging company, and shortly after BP acquired Chargemaster.
At this point, as Patent Attorneys, the term “universal” makes us think of “standards”, and that leads us to thinking of Standard Essential Patents, or SEPs – will these be as key and widespread in the automotive sector as they are now in the mobile phone/telecoms sector?
Which leads us to another key point made, ownership models for the automotive sector are changing, and there is a continued move to Mobility as a Service (MaaS) especially for the younger generations; it is yet to be seen whether the pandemic will slow this move because of hygiene concerns. This means that, like the mobile phone market, some people will still buy their car out-right, but others will pay a monthly fee and “upgrade” regularly, yet others will pay-as-you-go. It was also commented that upgrades during the life of the vehicle, particularly software, but perhaps also battery packs, will be more common, if not the norm.
Talking of the life of the vehicle takes us to the elephant in the room, perhaps 50% or more of the CO2 emissions from a BEV occur before a wheel ever turns; this proportion only goes up with increasing use of renewable energy to supply the electricity network. This was a particular concern of the representative from the iMechE’s Powertrains and Fuels group – to get meaningful reductions in greenhouse gas emissions for the world, and not just any one country, a full life-cycle analysis was required. It is no use simply to consider the UK as a closed system, and say our emissions have gone down, when the only closed system that matters is the world.
As we mentioned above, because of the full life-cycle emissions, it was not thought that the “simple” banning of IC engines, including Plug-in Hybrid Electric Vehicles (PHEVs) would achieve the desired result. This was especially true when sustainable fuels were considered. Nevertheless, there was thought to be no reason why BEVs would not be the future for passenger vehicles, but in the transition, PHEVs with EV only city modes to reduce local air pollution should not be ruled out. The industry clearly agrees and is still investing in IC engines, at least based on the proxy measure of patent filings – see our blog here.
Although sustainable fuels were considered part of the solution, in particular for heavy freight, investment in them is lacking, at least in part because whilst they can make a significant contribution to achieving greenhouse gas emissions targets, they do not count in the current tailpipe-focused framework; we plan on a future round-table to discuss sustainable fuels in more detail.
In addition to sustainable fuels, sustainability as a whole was also discussed. Recycling BEVs is significantly more challenging than recycling IC engine vehicles – indeed, recycling of IC engine vehicles is so widespread, that one attendee thought it likely his current vehicle had at least some steel from the first mass-produced vehicle, the Ford Model T!
Many attendees thought this all this added up to the potential for “battery-gate” once it entered the public consciousness that the zero tailpipe emissions BEV that they bought might only have emitted less CO2 than an equivalent IC engine vehicle after 10’s of thousands of miles, that the Li-ion batteries used are very difficult to recycle, and that the cobalt in those batteries likely came from “artisanal” mines in the Democratic Republic of Congo.
However, there are technical solutions to these problems, including among others, second-life use of automotive battery packs in stationary applications, and alternative battery chemistry (which is something we have written about here).
There are also clearly related areas which will assist in achieving the ultimate goal of significant reductions in greenhouse gas emissions (worldwide, and not just locally). To name just a few, improved control systems for PHEVs, light-weighting, heat management in battery packs to improve lifetime, and battery chemistry, will all play their part. We know this first-hand because Reddie & Grose has experience in assisting our clients with obtaining valuable IP rights in all of these areas.
Finally, we touched upon MaaS above, and that will also need to be factored in to the future of automotive powertrains. Currently, the average passenger car spends 95% of its life stationary – that lack of utility only exacerbates the embedded CO2 in BEVs. If through the increased prevalence of MaaS and perhaps in particular through the introduction of autonomous vehicles, that utility is increased, then the balance shifts to BEVs being the future of passenger vehicle powertrains; the subject of yet another round-table perhaps.
So, all in all, it was a great discussion that attempted to solve one of the world’s biggest problems, that could easily have continued had the group not needed to step away from their respective computers to put children to bed, cook dinner, or attend to miscreant IT equipment.
We in the Automotive Group are very much looking forward to hosting the next event later in the year, where the topic will be Connected Vehicles: Communications and Cyber-Security. If you work in this industry, and would like to be involved, please do get in touch.
This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.
