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  • Innovation Diffusion

Evolution and Diffusion of EVs as a Force of Disruptive Innovation

Technology progression and public policies have been playing vital roles in the evolution and diffusion of electric vehicles

  • Rokon Zaman
  • Created: December 8, 2021
  • Last updated: January 16, 2022
Evolution and Diffusion of EVs as a Force of Disruptive Innovation
Electric Vehicles have been evolving and diffusing as a disruptive innovation

All eyes are on the evolution and diffusion of EVs. Deaths and sicknesses due to air pollution caused by automobiles are about to come to an end. The world has been eagerly waiting to witness the disappearance of the reign of internal combustion engine-based polluting automobiles. All predictions are after the timeline of the victory of EVs. This imminent victory is the outcome of a long journey.  Over more than 150 years, several generations of electric vehicles emerged. Despite the potential and immense urge, all previous generations failed to cause creative destruction to the polluting ICEs. Hopefully, this time, the long journey of evolution of EVs will lead to making ICE-driven automobiles history.  

A Disruptive Force about to face Disruption

The invention of the automobile created a shy of relief among the dwellers of New York City and many other major cities. It was a hope of getting rid of manure of horses. For example, in 1900, around 3.5 million New York City (NYC) inhabitants needed the service of about 170,000 horses, also living in NYC, to move around the town.

A quick calculation suggests that these animals were producing almost two million kilos of equine excrement every day, plus a litre of urine from each animal at least. The accumulation of faeces, intensified with the rain, used to attract all kinds of rats, flies, and other disease-transmitting insects. To make it worse, carcasses of dead animals used to get abandoned on the streets, creating an additional health issue. Hence, despite the pollution caused by internal combustion engines, the automobile was a ‘green’ solution to the problem of horses and their manure.

Humble Emergence of Disruptive Innovation Force

The journey of ICE-based automobiles started with issuing a patent to Carl Benz in 1886. Despite the substantial latent potential, it emerged in primitive form. Compared to speed and payload, automobile in the early days was quite inferior to horse wagons. After 15 years of invention, in 1901, German automobile makers succeeded in selling just 900 vehicles. The situation in America was no different: thirty American manufacturers produced 2,500 motor vehicles in 1899. During the first decade of the 20th century, a one-cylinder, three-horsepower, tiller-steered, curved-dash Oldsmobile, which was merely a motorized horse buggy. But the situation kept changing with the continued improvement of ICEs and the design of cabins.   

Uprising of ICE based Artmobiles as Disruptive Force

Advancement of ICEs, cabins design and standardization of products resulted in a surge in the volume production and demand of automobiles. Consequentially, in 1913, the United States produced some 485,000 of the world’s total of 606,124 motor vehicles. Further continued advancement led to powering the diffusion of automobiles and causing disruption to the horse wagon industry.

Enabling factors—growing air pollution, worsening climate change, and technology progression  

After 100 years of the rise of the automobile as a disruptive force, history is about to witness the disruption of this once disruptive force. Ironically, once a green solution is a target of disruption with better green innovation. As opposed to horse manure, automobiles have been causing pollution due to gasoline-burning within cylinders. Besides smoke, particulate contamination is a significant source of many respiratory diseases—leading to deaths.

Already, some cities of South Asia have reached an unbearable state. For example, as per a study, air pollution caused 54,000 deaths and $8.1 billion economic loss in Delhi in 2020. A study of International Council on Clean Transportation (ICCT) estimated above 60 percent of deaths from air pollution in India is due to exhaust emissions from diesel vehicles. The study approximated that nearly two-thirds of 385,000 deaths in India in 2015 were due to automobile pollution. For this pollution, the global cost on health impacts in 2010 and 2015 was estimated at USD one trillion. Hence, after 100 years, there has been intense urgency to find a green solution for automobiles; ironically, once it arrived as a green alternative to horse wagons.

Automobiles Worsening Climate Change Effects

Further to outdoor air pollution, automobiles are attributed to greenhouse gas emissions, worsening climate change concerns. Fortunately, technology progression has been driving the economics in favor of EVs. By the way, over more than a century, EVs made several attempts to cause disruption to polluting ICE automobiles. But they failed due to economics. For example, innovators started touting EVs in the 1870s. Due to the slow growth of battery technology, it lost the battle to ICEs. Subsequently, Thomas Alva Edison attempted to innovate EVs to take over automobiles. the 1960s witnessed further attempts. Unfortunately, the slow growth of the battery technology kept failing all those attempts. Surprisingly, the situation changed due to the high amenability of the progression of lithium-ion batteries.    

Unfolding Evolution and Diffusion of EVs

During the first decade of the 21st century, the world witnessed serious moves to roll out EVs out of lithium-ion batteries. A remarkable initiative is California’s upstart Tesla. Along with Tesla, Nissan and Toyota rolled out EVs. Due to the increasing performance of the battery pack, the adoption of EVs has been rapidly increasing, reaching a sale of a total of 2.65 million new EVs during the first half of 2021, an increase of +168 % compared to 2020”.

Serval countries and automobile makers have announced a few important deadlines. For example, the European Union aims to have at least 30 million zero-emission vehicles, EVs, on its roads by 2030. To reach the target, among other measures, the EU set a target of 1m charging points by 2025. EV has been part of the broader strategy of the EU for meeting its target of reducing average carbon emissions by 55 percent in 2030, compared with 1990 levels. To meet a target for at least 65 percent of all new vehicle sales to be electric by 2030, India has come up with Rs 10,000 crore to promote EVs by extending buyer subsidies.

Evolution and Diffusion of EVs accelerate

China’s Lead in EV’s Diffusion

By the way, among all the countries, China has been leading EV diffusion, with 1.1 million vehicles sold in the first half of 2021. In addition to giving subsidies for EVs, China has been discouraging ICE-based automobile sales through several regulatory measures.    Automobile accompanies have also ramped their steps in reinventing their existing models in turning them into EVs. For example, German automakers produced 53,221 EVs in July of 2021, 21.7 percent of the total number of cars produced in Germany that month. According to Energy Monitor, this is a sharp rise from just 6.8 percent of new vehicles produced were Evs in March 2020, and only 3.2 percent of new cars were electrics in January of 2019.

Barriers—cost, quality, infrastructure, and recycling

Despite many favorable regulatory measures, the diffusion of EVs has been facing several barriers. Notable ones are cost, quality, infrastructure, and recycling of e-waste. Furthermore, the scarcity of natural resources needed to make all those batteries is a crucial barrier. The cost of the battery pack, weighing almost 1000 lbs for a typical family sedan, is still far higher than an ICE for powering an automobile. Charging time, range, and declining battery performance are among significant issues. Besides, recycling a staggering amount of e-waste, comprising batteries, motors, and power electronics, is a growing concern. In addition to dealing with pollution issues, recycling battery packs is a must to ensure the supply of minerals needed to keep making new battery packs. So far, not much progress has been made for the profitable recycling of e-waste, likely to be produced by EVs. Furthermore, the availability of charging points is an issue.        

Role of Public Policy and Regulation Affecting the Evolution and Diffusion of EVs:

From the very beginning, the role of the government has been very supportive to the evolution and diffusing of EVs. In addition to imposing increasingly stringent regulatory measures on emission control of automobiles, Governments of major countries, like the USA and China, have been providing subsidies for the sale of EVs. Such actions are vital to support the diffusion of early emergence of costly EVs. Furthermore, Government’s role in supporting battery R&D and linking incentives to battery performance improvement and cost reduction has been a vital enabling factor. Besides, the Government’s role in stimulating the growth of charging infrastructure rollout has been crucial to the diffusion of EVs.    

Response of Different Customer Segments

Despite the rapid growth of EV diffusion, the sale of EVs as a percentage of a total number of vehicle sales is relatively small. In 2020, electric vehicles accounted for about 2 percent of all car sales. Still, to date, innovators and early adopters have been responding to the adoption of EVs.

For sure, successive releases, having better battery packs and more easily available charging points, have created bursts of thrusts generating progressively larger diffusion waves. In addition to regulatory measures, the amenability of technology progression, making battery packs increasingly better and cheaper, has been contributing to the evolution and diffusion of EVs. Such reality demands a strong focus on systematic effort on idea generation from the advancement of science and technology. Hence, management of technology and innovation has been playing a crucial role for the evolution and diffusion of EVs.   

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