Speed Bump

In 1900, electric cars were all the rage.

These battery-powered “horseless carriages” outsold gasoline and steam-powered cars that year. But then along came Henry Ford and the gasoline-powered Model T roared into the picture. By the 1930s, the electric car was dead, killed by Ford’s mass production of the internal combustion engine (ICE) and readily available cheap gasoline.

Fast forward nearly a century, and electric vehicles (EVs) are back. According to McKinsey & Company, global sales of new EVs passed a million units in 2017, and they predict 4.5 million units by 2020 – about five per cent of the global light-vehicle market. Deloitte predicts 21 million EVs on the road by 2030.

In Canada, there were just under 100,000 EVs on the road in 2018. And though they still make up a small percentage of overall car ownership, EV sales grew by 125 per cent from 2017 to 2018. Powered by federal and provincial rebates devised as incentives to reduce greenhouse gas emissions and combat climate change, more and more Canadians are choosing to go electric.

It’s a movement that’s having a profound impact on multiple industries, and Ivey alumni are at the centre of the action, envisioning what a potential worldwide EV revolution could look like.

From Auto Manufacturer to Tech Company

“Electrification is the type of technology where you don’t really have a choice as to whether to adopt it or not – it’s either innovate or die,” says Safir Jamal, HBA ’11, Head of Strategy and Operations for the Ford X incubator.

It’s Jamal’s job to be at the absolute cutting edge of mobility innovation. The Ford X incubator was created in 2018 to help Ford envision, build, and validate its own startups. Employees worldwide are invited to submit venture proposals in areas like shared mobility, autonomous driving, vehicle connectivity, and electrification. Those with the best submissions are plucked from their day jobs to develop them in the incubator on a “shoestring” budget of $400,000.

“The goal is that by the end, you can graduate certain ventures and turn them back over to the core business for additional resourcing to scale them up,” says Jamal, who’s based in Palo Alto, Calif. The incubator has about 40 people working on top-secret ventures.

Ford is committing $11 billion to EV technology that will lead to 40 new hybrid and fully electric models to be released by 2022. It’s a big step for a company built on the ICE.

“Electrification is the type of technology where you don’t really have a choice as to whether to adopt it or not — it’s either innovate or die.” —Safir Jamal, HBA ’11, Head of Strategy and Operations for the Ford X incubator

“The future of the auto industry really requires an identity shift from being industrialized companies to becoming tech companies,” Jamal says.

In Jamal’s view, electrification is a foundational technology for the future of transportation. He notes that Tesla has done a great job of putting EVs into the mainstream conversation, and now the price point has come down with products like the Nissan Leaf and Chevy Bolt. Meanwhile, when it comes to self-driving, or autonomous cars, everyone working in this space is doing it in the context of EVs.

“I think that we’re going to see an absolute extinction of the ICE vehicle. It’s just a matter of time before that entire transportation ecosystem shifts,” he says. “At Ford, there have been a lot of really exciting shifts in order to embrace a new identity as a tech company. And we’re not done yet.”

It’s a pro-electric mentality familiar to Brent Smith, HBA ’97, Deputy General Manager, Chief Marketing Management for Nissan Canada. Smith notes that the Nissan Leaf is the world’s best-selling EV, having sold 400,000 units worldwide since its launch in 2010.

Electrification is a big part of Nissan’s corporate vision to become a leader in zero-emission vehicles, Smith says, and to “lead the pack” toward a zero-emission society. Switching from a gas-powered vehicle to an equivalent EV can cut greenhouse gas emissions by up to 90 per cent.

“The Leaf is also the embodiment of our corporate strategy for Nissan intelligent mobility,” Smith says. He points out that many of the company’s forward-looking technologies, such as semi-autonomous driving feature Pro- Pilot Assist, came out first on the Leaf.

Smith says he thinks the biggest challenge of selling EVs is awareness that they can deliver a mainstream driving experience. “What a lot of people don’t realize yet is that you don’t need to make any compromises when you’re driving an EV; everything from great cargo capacity, to the latest infotainment, to overall comfort and convenience – these things are all present in zero-emission vehicles,” he says.

Ridesharing Goes Green

While electrification has transformed how clean driving can be, ridesharing is transforming who we ride along with. Some of the most prominent ridesharing companies, like Uber and Lyft, have been loudly declaring their support for EVs.

Joanna Reardon, HBA ’09, Strategy and Planning Manager, Driver Operations for Lyft, says the company launched their Green Cities initiative to “take a stand” about the fact that transportation is one of the worst contributors to greenhouse gases. The initiative is a multi-million-dollar commitment by Lyft to purchase voluntary carbon offsets (such as planting trees and supporting wind farms), so that every Lyft ride is now carbon neutral.

That commitment ties into Lyft’s support for EVs, Reardon says. “It creates this great accountability where the more shared rides we can offer in clean vehicles, the fewer carbon offsets we need to purchase.”

People can rent cars through Lyft with their Express Drive program, and Reardon says they are introducing 4,600 EVs to the platform. In Seattle, Lyft also offers riders the choice to request a ride in either a hybrid or EV with its Green Mode program, with plans to roll out the option in more cities in the future.

Reardon notes that Lyft is just at the beginning of the journey to provide more environmentally friendly options.

A Question of Capacity

As more and more EVs end up on our roads and in our garages, it raises questions around how our current infrastructure will be able to handle it.

Chuck Farmer, HBA ’86, is Director of Resource Planning for the Independent Electricity System Operator (IESO), a non-profit agency of the government of Ontario. He says IESO’s role is to anticipate what the electricity infrastructure requirements will be for the next 20 years and whether there are gaps to fill.

“If everybody comes home from work and plugs in their car, then it’s like rush hour on a highway. You’ve got everybody wanting the electricity at once and that peak can be a difficult thing to deal with.” —Chuck Farmer, HBA ’86, Director of Resource Planning for the Independent Electricity System Operator

Farmer says EVs have been on their radar for years.

“We’ve been planning for the build out of EVs since about 2013,” Farmer says. “In our latest outlook, we’re currently accounting for somewhere around a million EVs to be on the roads in Ontario by 2035. There’s currently about eight million small passenger vehicles in Ontario, so that’s quite a big uptake.”

But even with that large increase, Farmer says it will affect Ontario’s demand for electricity a lot less than people think. “We forecast that it will increase the demand in the order of one-to-two per cent.”

However, EVs could potentially cause issues in a more local way.

“If everybody comes home from work and plugs in their car, then it’s like rush hour on a highway. You’ve got everybody wanting the electricity at once and that peak can be a difficult thing to deal with,” Farmer says. There are ways to mitigate these costs, he notes, such as incentivizing people to invest in timers so they can charge through the night.

While Farmer thinks they’re “out in front” of any potential problems caused by a proliferation of EVs in the province, he notes that it can be difficult to forecast a tipping point for EVs because, “You only really see tipping points in the rearview mirror.”

To Believe, or Not to Believe

For all the people sure that EVs are on their way to take over the auto industry, there are others who approach the issue with a bit more caution.

Silvia Mok, EMBA ’13, is Head of Marketing and Business Development at BASF, the world’s leading chemical supplier to the automotive industry, where she is responsible for automotive coatings for BASF Asia Pacific. Based in Hong Kong, Mok says she is a bit more skeptical about how quickly “new energy vehicles” will dominate the automotive landscape, particularly in Asia.

“We believe it will be a mix of a battery and the combustion engine. But it depends on factors like the willingness of the government to provide subsidies. If circumstances are right, I am sure EVs will take off.” —Silvia Mok, EMBA ’13, Head of Marketing and Business Development at BASF

“According to our intelligence, even by the year 2030, we believe more than 50 per cent of vehicles will still be gasoline, 20 per cent diesel, and 20 per cent plug-in hybrids. Only about 10 per cent of the total market would be battery-only vehicles.”

Mok notes that in a country like China, the government has invested a lot of money into incentives for citizens to buy EVs. But the infrastructure is just not there yet, she says.

“When they build new condominiums in China – huge residential complexes – they do build in charging stations. But what about all the other old ones? They need to catch up with building the infrastructure.”

In Mok’s view, hybrids may be more likely to flourish in Asia than pure battery EVs. That’s why BASF has chosen to produce active cathode materials for the lithium-ion batteries used in the majority of EVs, but they also produce mobile emission catalysts for gasoline and diesel engines.

“We believe it will be a mix of a battery and the combustion engine,” she says. “But it depends on factors like the willingness of the government to provide subsidies. If circumstances are right, I am sure EVs will take off.”

Greg Zhao, MBA ’03, Managing Director of EV Business for Panasonic China, also thinks that EVs are not quite where they need to be to displace ICE vehicles, and that consumers who are interested in EVs are likely to choose hybrids over pure-battery EVs for the foreseeable future.

“EVs can solve many problems, and pollution is a big issue in China,” he says. “That’s the good part. The negative part is the EV still cannot solve some of the user-experience problems, like the charging speed is still very slow.”

Zhao says that the limitations faced by EVs are because of the “slow evolution” of battery technology.

“There’s a consensus amongst most of the experts, including myself, that the current lithium-ion-based battery has almost reached the last phase of its potential,” he says. “Maybe we will never be able to charge a battery in five minutes – maybe it will always be hours.”

Going forward, Zhao says there are two possibilities to displace the lithium-ion battery: the solid-state battery and the hydrogen fuel cell (currently there are a few vehicles available that feature the fuel cell).

“A lot of companies and universities are working on them,” he says. But while both hold the potential to improve EVs, “it’s not a hundred per cent for sure that the whole industry will go in that direction.”

A Need to Act Now

While technology may hold the key to improving the performance of EVs and prompt mass adoption, there are those who say we don’t have time to wait to find out.

Juliane Schaible, MBA ’94, is a Senior Economic Development Consultant in the climate change, energy, and clean tech branch for the Government of Manitoba, and she has been consulting on sustainability issues for over 20 years.

“Now is the time to rethink transportation,” Schaible says. “Because climate change action is so urgent, EVs are very important in reducing greenhouse gas emissions which are causing climate disruption.”

Any kind of large-scale switch to EVs will require a great deal of will and ambition from “that triad of the citizen, the businesses, and the organized structures of society to actually work together on it,” she says.

Schaible gives the example of Norway, where EVs are now outselling gas-powered vehicles. She points out that taxation has been a way to steer transportation policy in that country. Zero-emission vehicles are exempt from the 25-per-cent tax levied on gas and diesel vehicles, and they save on other costs, such as registration and ownership taxes, road tolls, ferry fares, and public parking fees.

These kinds of solutions could work in other jurisdictions, Schaible says.

“If there is one challenge in particular, it’s this presumption that the market can evolve slowly and naturally of its own free will,” she says. “The longer we delay becoming more resilient to climate change, and actually reducing the source of that pollution, the harder it’s going to be.”

Safir Jamal from Ford is optimistic that there’s a massive shift in consumer behaviour on the horizon. Just like the ICE saw the end of the horse-and-carriage era, we will be able to witness the transition to clean transportation.

“I can tell you personally that this is why I chose to build my career in this space,” Jamal says. “I think that the next five-to-10 years are going to shape the next hundred years of this industry.”

Photos: Jay Watson (Safir Jamal), Nation Wong (Chuck Farmer), DM Wedding (Silvia Mok)
Art Direction: Greg Salmela, Aegis