Henry Ford did not invent the car. Credit for ushering in the age of the automobile widely goes to Gottlieb Wilhelm Daimler and Karl Benz for their landmark vehicles of 1886. But it was Ford’s Model T, first produced in 1908, that changed everything – transforming personal motorized transport from a boutique business to an industry based on expensive tooling, mass production and economies of scale.
Over the past century, as the automobile gained popularity across the world, there was a dramatic transformation in city planning, infrastructure and distribution systems. The migration from densely populated urban areas to suburbs, in turn, has transformed people’s lifestyles and social interactions, even their employment patterns. While the effects of modern automobile use continue to generate philosophical discussions, perhaps the most controversial debate centers around the impact that nearly one billion cars worldwide are having on the environment. Environmental sensitivities have begun to drive demand for an alternative to the conventional internal combustion engine (ICE) vehicles.1 Among the front-runner technologies: the Battery Electric Vehicle (BEV), a zero-emission vehicle.
Because BEVs consume electricity, replacing ICE cars with BEVs has the obvious benefit of reducing significantly the amount of vehicle-emitted environmental pollution. But the implications are broader and potentially disruptive, both with regard to infrastructure and more immediately the automotive value chain. Because BEVs contain a large capacity battery, they could act as distributed power storage devices in cities, thus potentially reducing the risk of blackouts as well as generating intermittent renewable energy. The nature and characteristics of BEVs may well change the structure and business models of the auto industry – who the players are and where the money is made. In that sense, the spread of BEVs may be even more transformative than the Ford Model T and its legendary assembly line.
BEVs have a bit of a “been there, tried that” aura to them. Automakers and parts suppliers have made several attempts to introduce the BEV to the market, with each effort foundering on inadequate battery technology and ultimately cruising range. But the playing field has changed. Advances such as tires with lower rolling resistance, lighter body materials and regenerative braking have made the concept more feasible and practical. Governments, too, are lending support through policies to reduce environmental impacts and offering economic stimulus measures to boost the sales of environment-friendly vehicles. To that end, in Japan—one of the leading automotive manufacturing countries in the world—2010 has been touted as “the Year of the BEV.”2 Many major automakers in the world are entering the market with their versions of the BEV.
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