‘Global vehicle electrification is at the stage of no return’ | Estadão Mobility | Electric Planet
4 min readAmerican Brian Collie is one of the world’s most respected voices on the topic of vehicle electrification. Global leader of Boston Consulting Group’s (BCG) automotive and mobility markets, Collie specializes in working with manufacturers and suppliers on a wide range of strategy, operations and organization topics, as well as the potential for convergence of sharing, autonomous technologies and , mainly, electrification.
Based in Chicago (United States), Collie travels the world to discover new projects related to electrification. “Europe and the United States went through a first wave. The challenges will appear now”, he reveals. On a recent visit to Brazil, the executive gave the following interview to the channel Electric PlanetO.
In Brazil, electrified vehicles have been recording an increase in sales. How is the situation out there?Brian Collie: It is necessary to look by region, because there is no homogeneous progression in the world. China is already past the point of no return, with rapid growth, many launches and investments. There, 50% of sales are pure electric or plug-in hybrids. There is widespread consumer support and the infrastructure is being put in place.
In the United States and Europe, the picture is a little less clear. Everything new has its bumps and, in the last 12 months, there have been more challenges, especially in the United States, with high interest rates dampening demand a little, in addition to quality problems in some products. The North American heavy pickup truck market is very strong and difficult to electrify. A battery It is too heavy and the car is often used off-road. Then, sales stagnated at 10%.
What should happen now in markets like the United States? Collie: The long-term vision has not changed, but the path is less linear. Despite the difficult times, these markets will electrify for simple reasons. Firstly due to the need for decarbonization and the main path — it seems to be clear — is vehicle electrification. Secondly, because costs tend to be favorable. Battery prices have been falling, consumers are more accustomed to them and the products are getting better.
Masao Ukon, executive director and partner at BCG in Brazil, and Brian Collie, senior partner and executive director at Boston Consulting Group. Photo: BCG/Disclosure
With such bumps, isn’t there a risk that these markets will face a decline in sales? Collie: We’ve passed the point of no return for passenger cars. In the United States, a consumer survey showed that 40% intend to buy an electric car in the next two or three years. It is a large sample, much larger than 10% of sales volume. Automakers face challenges, such as gaining scale to make the numbers close, because electric cars are less profitable. Therefore, it needs to be made economically viable in the long term. Finally, governments must invest in charging infrastructure. These are factors that will dictate the speed, but there is no way back.
What are the obstacles preventing further growth?Collie: Price, obviously, is a barrier, although it is falling. The other is autonomy anxiety. Hybrids enter this equation, as they solve this dilemma. In the coming years, adoption waves will be from families with two vehicles – one gasoline and the other electrified. China is already a big market for hybrids, the United States is starting too. And, to reach 50%, 60% penetration, charging infrastructure will need to be built on streets and roads.
Could lithium exploration be a problem in the future for battery manufacturing?Collie: Where the raw materials are is a relevant topic in electrification. Minerals and their refining are concentrated more in Asia. However, there is a movement to reduce supply chain dependence on the United States. It’s a challenge, because moving a chain from one region to another takes time and requires investment.
What does this movement look like?Collie: The United States Department of Energy launched the Li-Bridge project, with the mission of strategizing a robust and sustainable lithium battery supply chain. By 2030, Li-Bridge wants to double current value capture for the United States to increase its domestic share to 60%.
Could green hydrogen be a good fuel solution for the future?Collie: The application of hydrogen is more limited in passenger cars because it requires complex infrastructure. It may be more viable in commercial vehicles, which travel long distances and transport heavy loads. Brazil has everything it needs to be a leader in green hydrogen, but for specific applications.
‘In Brazil, electrification will be gradual’
In the wake of Brian Colle’s interview, Masao Ukon, executive director and partner at BCG in Brazil, spoke about the energy transition in the country.
Given the global scenario, how is electrification in Brazil? Masao Ukon: We are in a privileged position for decarbonization due to sustainable resources. But the path will be more gradual and with the combination of forces from several technologies, such as hybrid, electric and flex engines. The entire structure built around ethanol cannot be discarded.
Here, there is a strong debate as to whether the electric car is really more worth it than ethanol. What is your vision?Ukon: The discussion is difficult, because it depends on the use of the vehicle. It can be said that biofuels and electric motors are complementary forces. A viable and possible combination.
Is the flex hybrid an ideal solution for Brazil until the electric market is consolidated? Ukon: It is an accessible technology without the impediment of infrastructure. This is a necessary option, especially because the Brazilian portfolio is focused on entry-level cars, in which pure electrification is very expensive.
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Author: Dante Grecco