The 160 years old automobile industry is at the crossroads of history - its fate hangs on a thread of uncertainty and great expectations. The COVID-19 pandemic has kick-started a creative disruption in the auto industry and the extent of its impact is still being explored.
When we hear Greta Thurnburg demanding all of us to drive electric vehicles (EVs) and save the environment, we cannot help wondering about its feasibility.
EVs have been around for more than a century and yet the internal combustion engine (ICE) cars are far ahead of EVs in terms of range, utility, and supply chain management.
The big oil and the giant carmakers have long suppressed the innovation of EVs and until the 2000s, the investment and energy diverted towards EVs were minuscule. The ICEs enjoy 160 years of leadership in the race. So the competition looks like that of David and Goliath.
Clearly, EVs are the future unless humans have no problem with destroying their cradle and turning earth into a real-life dystopian film set. The world is moving fast towards an EV era and it has created a creative disruption in the auto industry.
However, despite the massive investment and interest in the EV sector, a few key obstacles remain standing on the path to the brave new future. Bangladesh Auto Industries Limited (BAIL) has taken the initiative to manufacture EVs in our country and evidently, the road is just as smooth as the streets of Mirpur. Moreover, the global EV industry itself is marred with a number of shortcomings.
EVs require a large investment in R&D (Research and Development). Tesla spent USD 1.5 billion in R&D last year, while the figure stands at a staggering USD 7.5 billion for BAIC, the second most selling EV producer. Therefore, it is no surprise that EVs are nearly USD 100,000 apiece, which is beyond the reach of mass people.
The EVs require a substantial amount of connectivity among vehicles and cloud servers. At present, the current infrastructure is not sufficient enough to support this system.
The security issue still looms large. Fully connected vehicles are vulnerable to hacking and cyberattack. And the driving assistant installed in the EVs is yet to gain confidence.
According to the American Automobile Association, an issue is found with the driving assistants every 8 miles on average. The data should be taken with a grain of salt, but it does not change the consumers’ scepticism as only 17 per cent of them trust EVs’ driving assistance system.
The biggest challenge for the EVs is the battery which is the most important part of the vehicle. Unless the battery is improved, neither the range nor the versatility of ICEs can be achieved by green cars.
The complex supply chain will also be a major obstacle for EVs as an average car requires nearly 30,000 parts from all around the world. This supply chain process is nowhere near prepared to be operated by AI. It has become evident when Tesla went through a production hell to mass-produce its Model 3.
Moreover, the tech giant’s grip on the software of the EVs can potentially undermine the current global automobile scenario and no one is a fan of the all-encompassing influence of tech giant companies over our lives.
At an organisational level, EVs require a complex network of human operators. Such a delicate network is still a far cry at today’s standard. Software development is still at an obscure level of machine learning algorithms.
The data collecting method of the EVs will raise ethical questions. Tech giants have gained notoriety for unethical data collection already. Therefore, a strong framework is needed, in which both the governments and the manufacturers are lagging far behind.
Lack of regulation, infrastructure and recharging capacity will hinder the EVs’ entry into the local consumer market.
Most of the EVs are being sold in the so-called first world, whereas the impoverished but global warming hotspots like China and India are not in the mood of ending their relationship with the ICEs.
So, the EVs have remained a rich man’s choice, leaving out the middle class off the game.
The class conflict of green policies is evident here, and this gap is going to be widened unless there is a systematic approach to transform the automobile industry to be not only pro-earth but also pro-people.
And most importantly, the electricity of the EVs has to come from somewhere as EVs are expected to raise the global demand for electricity by 6.8 per cent in 2040.
For now, the most popular source of electricity is coal which provides 38 per cent of global electricity. Any alternative is just too risky and too troublesome at present. The recent global energy crisis stands as a testament to this statement.
So, unless a clean source of electricity becomes mainstream, pushing the EVs on the streets serves no better purpose than being a feel-good shallow environment policy.
So, whatever the shiny experts or green politicians say about the global auto industry going electric in the next 20-30 years is a bit hard to achieve as the scenario stands at present.
Shadique Mahbub Islam is currently pursuing a bachelor’s degree in Economics at the University of Dhaka.
Shadique.mahbub.islam@gmail.com