BMAN30010 Management, Technology & Innovation
Electric Vehicles Report
Course Coordinator: Hugh Cameron
Seminar Leader: Amir Khorasani
Joshua Hall
Student ID: 7606488
Abstract
This report examines the effect innovation in battery technology has on the electric vehicle market. Evidence suggests that there has been much development in battery technology in the past twenty years and has progressed from the low performance lead-acid type battery to the higher density and higher power lithium-ion batteries (LIBs). Sales of electric vehicles have fluctuated since the early 2000s, but have been doing so at an increasing rate with sales up 34% in 2015. The research suggests that there is a strong positive correlation between battery technology innovation and electric vehicle sales. The second part of this report is to assess how innovations in battery technology enable electric vehicles to disrupt the automotive market. It shows that electric vehicles are getting cheaper to buy and are becoming more efficient enabling them to obtain stronger competitive values. Electric vehicles are still an emerging market and have a long way to go in order to gain a substantial market share, however from my research I have found that there are various measures in place that will help to achieve this.
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Contents
1. Introduction 3
1.1. Background History 3
1.2. Research Question 3
1.3. Theory 4
2. Methodology 4
3. Findings & Discussion 4
4. Conclusion 8
4.1. Limitations & Further Research 8
5. Appendices 9
6. References 10
1. Introduction
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1.1 Background History
Electric vehicles (EVs) have been a technological phenomenon at the edge of legitimacy since the
early1800s. However, it wasn’t until the second half of the 19th century that French and English
inventors built some of the first practical electric cars (The Department of Energy, 2014). At the turn
of the 20th century the sales of EVs surged, however with the introduction of gasoline powered
vehicles lead to the near demise of the electric vehicle by 1935 (The Department of Energy, 2014). It
was not until the 1990s that things started looking up for electric vehicles; thus with the introduction
of various regulations (see appendix), the EV was revived (The Department of Energy, 2014).
One of the main issues with EVs was that they could only travel short distances. Most drivers
required a cruising range of about 125-150 miles, however most EVs only offered around 50-80 miles
(Christensen, 1997). They would take around 20 seconds to get from 0-60 when drivers required half
that time. Both of these issues were down to the lack of battery power that was encased within the
vehicle. John R. Wallace, of Ford, for example, stated that “The only solution for problems of range
and cost is improved battery technology […]” (Christensen, 1997, p. 215).
1.2 Research question:
How has innovation in battery technology affected the electric vehicle in the US market in the
last 20 years, and how is it enabling them to be a disruptive innovation in the automotive
market?
I have chosen this research question as I believe the past 20 years is the period in which the most
innovation in battery technology has occurred and it is also the period that the EV market has been
revived. I chose to enquire about the disruptive innovation as I feel it is a theory that can be applied to
the electric vehicle market.
1.3 Theory
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I will be concentrating on two major theories throughout this report, the first being disruptive
innovation. I will be considering some principles of disruptive innovation that (Christensen, 1997)
introduced and I will then consider the work of (Markides, 2006) who proposes a different view of
‘Disruptive Innovation’. I will also be briefly exploring the theory of innovation diffusion from
((Moore, 1998) & (Rogers, 2003)).
2. Methodology
I must now consider how I will gather the evidence I need in order to address the research question.
Journal articles will present me with the necessary information I need concerning battery technology.
Books like (Christensen, 1997) and (Moore, 1998) will help me understand the theory needed. State
Official websites such as that of The Department of Energy (US) will give me an insight into the
various aims, regulations involved, and an overview of the electric vehicle market.
Although primary data would have allowed me to address my specific research issue, I chose
to use secondary data as it is much more accessible and allowed me to create new insights from prior
analyses.
3. Findings and Discussion
From my research it has become clear that the most important measures of performance of an EV are
range, power, safety, convenience, cost of ownership, and reliability (Hayner, et al., 2012, p. 446).
The battery is seen as the heart of the propulsion system and plays a vital role in all of these features.
Christensen claimed that the performance of electric vehicles was improving at a faster rate,
suggesting that sustaining technological advances might have been able to carry EVs into the
mainstream markets (Christensen, 1997, p. 207).
The problem with the initially used lead-acid batteries was that they had limited energy density, which
meant that they had a relatively short battery life, and a long recharging time (The Department of
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Energy, 2011, p. 7). Looking at the diagram given in fig.1 we can see that the lithium-ion (Li-ion)
battery technology has a clear edge over other electrochemical approaches when optimised for both
energy and power density (International Energy Agency, 2009, p. 12).
Fig.1;
Source: (Hayner, et al., 2012)
(Lee, et al., 2010) showed that lithium based batteries had been introduced that provided much more
power than conventional batteries and provided much longer lifetimes; leading to faster vehicles that
can travel longer distances. The higher energy and higher currents found in these batteries are vital for
heavier hybrid vehicles (Lee, et al., 2010), which have really come to fruition since the turn of the
century (see fig.2). A popular battery for hybrid electric vehicles (HEVs) however is the Nickel-
Cadmium (NiMH) as they can be more durable and can sustain a higher number of lifetime cycles for
deep discharging up to 80% than Li-ion. However they offer a lower vehicle speed and acceleration
performance, as well as a lower electric travelling range, which are important features to the
consumer.
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If we look at the two graphs in fig.2 we can see that HEV and Plug-in Electric Vehicle (PEV) sales
have fluctuated but at an increasing rate in the past 20 years. In 2011, Barack Obama stated that he
wanted one million vehicles on the road by 2015 (The Department of Energy, 2011).
Fig.2,
Source: (U.S. Department of Energy: Energy Efficiency & Renewable Energy, 2014)
The full electric vehicle (FEV) market has not seen as much success as HEV and PEV market with
only about 280,000 sales since 2011 (Tuttle, 2015), less than a third of Obama’s target. However, total
FEV sales in the US were up 34% from 2014-2015 (Shahan, 2015). There have been advances in
performance thanks to built-in high power battery packs (Poullikkas, 2015). The most recently
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manufactured FEVs use state-of-the-art Li-ion battery backs and have a typical range of
approximately 120-390km with a top speed of 200km/h (Poullikkas, 2015).
One of the most recent innovations in battery technology is the introduction of silicon-graphene
composite electrodes for lithium-ion batteries. These are stable self-supporting composite electrodes
with an enhanced accessible interior and a high rate capacity (Zhao, et al., 2011). These batteries
could provide a 300% improvement in LIB capacity and an estimated 70% reduction in lifetime cost
for batteries (PRWeb, 2012). However this is in need of further development as its severe volume
change results in drastic capacity fading (Zhang, et al., 2015).
Although some manufacturers in the market solely produce EVs (e.g., Tesla) many of the key players
in the market are established firms such as Nissan and Daimler. This suggests that incumbent firms
are adopting the electric vehicle, a feat that according to (Christensen, 1997), is the best method to
confront a disruptive technology. Christensen also claimed that disruptive technologies will
eventually grow to dominate the market, which, as of yet, cannot be applied to EVs. Some academics,
such as Markides apply a modified version of disruptive innovation with the idea of business-model
innovation, where the new way of competing in the business can grow, to a certain percent of the
market, but can fail to completely overtake the traditional way of competing (Markides, 2006);
perhaps a more apt evaluation of EVs.
Many established firms are currently in partnership with battery manufacturers such as Ford and
Toshiba, BMW and SBL and Daimler and Sanyo (see fig.3 in appendix). These partnerships can be
seen as affective methods of gaining competitive advantage and assisting the companies to diffuse
their innovations.
According to Everett Roger’s innovation diffusion model, FEVs are still in the early stages of
adoption (Rogers, 2003). The next step for them is establishing themselves in the mass market, or as
(Moore, 1998) phrases it, ‘Crossing the Chasm’. They have succeeded to spread their products across
the innovators and early adopters; they must now advance into the ‘early majority’ or mass market.
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4. Conclusion
From my findings I can see that there is a definite correlation between improving battery technology
and sales of EVs. One of the fundamental points that Christensen makes is that disruptive
technological innovations will continue to grow until they dominate the market, however it is difficult
to predict whether or not this will happen in this case as EVs still have a tiny portion of the market
share; 3.66% of all vehicles sold in the US between January-September 2014 (Flemming, 2014). The
EV is still in the early stages of adoption and more development is needed in order to achieve
substantial market success. In order to render EVs more disruptive, higher energy densities, with less
capacity fading need to be developed in batteries. Increased energy density means energy storage
systems will require less active material, fewer cells, and less cell and module hardware (International
Energy Agency, 2009). These improvements, in turn, will result in batteries, and by extension
EVs/PHEVs, that are lighter, smaller and less expensive; allowing EVs to –according to Christensen’s
theory – become a fully disruptive innovation.
4.1 Limitations & Further Research
It is not certain whether we can put the rise in electric vehicle sales down to innovation in battery
technology or if it is down to increased pressure from the government to switch to EVs or whether
they are becoming more popular because of how they look, not whether they perform well. Therefore,
further research needs to be done into business models that will enable EVs to breakthrough into the
mass market as well as more developing a better understanding of driving behaviour and likely EV
purchase and use patterns. Christensen’s book is coming up to 20 years old, therefore some of the
assumptions he made may have changed since then. Another issue with my research is that it lacks
primary data, which would have improved my data interpretation and made it more accurate.
Word Count: 1,592
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5. Appendices
Regulations:
The Clean Air Act Amendment and the 1992 Energy Policy Act Increases in the Corporate Average Fuel Economy (CAFE) standards The National Highway Traffic Safety Administration (NHTSA) published a rule raising
CAFE standards for both cars and light trucks (The Department of Energy, 2011)
Fig.3,
Source: (International Energy Agency, 2009)
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References1. Christensen, C., 1997. The Innovator's Dilemma: When New Technologies Cause Great Firms to
Fail. 1st ed. Boston: Harvard Business Review Press.
2. Flemming, C., 2014. Los Angeles Times: Electrified car sales stall as buyers back away from hybrids. [Online] Available at: http://www.latimes.com/business/autos/la-fi-hy-electric-vehicle-sales-20140903-story.html[Accessed 16 March 2015].
3. Hayner, C. M., Zhao, X. & Kung, H. H., 2012. Materials for Rechargeable Lithium-Ion Batteries. Annual Review of Chemical and Biomolecular Engineering, Volume 3, pp. 445-471.
4. International Energy Agency, 2009. Technology Roadmap: Electric and plug-in hybrid electric vehicles, s.l.: International Energy Agency.
5. Lee, S. W. et al., 2010. High-power lithium batteries from functionalized carbon-nanotube electrodes. Nature Nanotechnology, Volume 5, pp. 531-537.
6. Markides, C., 2006. Disruptive Innovation: In Need of Better Theory. The Journal of Product Innovation Management, Volume 23, pp. 19-25.
7. Moore, G. A., 1998. Crossing The Chasm: Marketing and Selling Technology Products to Mainstream Customers. 2nd ed. Chichester: Capstone Publishing Limited (a Wiley Company).
8. Poullikkas, A., 2015. Sustainable options for electric vehicle technologies. Renewable and Sustainable Energy Reviews, Volume 41, pp. 1277-1287.
9. PRWeb, 2012. New Lithium Si-Graphene Battery Material Opens Doors. [Online] Available at: http://www.prweb.com/releases/2012/10/prweb10055151.htm[Accessed 17 March 2015].
10. Rogers, E. M., 2003. Diffusion of Innovations. 5th ed. London: Simon & Schuster.
11. Shahan, Z., 2015. Tesla Model S, Nissan LEAF, & BMW i3 Top US Electric Car Sales in February. [Online] Available at: http://cleantechnica.com/2015/03/06/tesla-model-s-nissan-leaf-bmw-i3-top-us-electric-car-sales-in-february/[Accessed 16 March 2015].
12. The Department of Energy, 2011. One Million Electric Vehicles by 2015. [Online] Available at: http://www1.eere.energy.gov/vehiclesandfuels/pdfs/1_million_electric_vehicles_rpt.pdf[Accessed 20 February 2015].
13. The Department of Energy, 2014. The History of the Electric Car. [Online] Available at: http://energy.gov/articles/history-electric-car[Accessed 3 March 2015].
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14. Tuttle, B., 2015. Time. [Online] Available at: http://time.com/money/3677021/obama-electric-cars-gas/[Accessed 15 March 2015].
15. U.S. Department of Energy: Energy Efficiency & Renewable Energy, 2014. Alternative Fuels Data Center. [Online] Available at: http://www.afdc.energy.gov/data/[Accessed 15 March 2015].
16. Zhang, J. et al., 2015. Silicon-nanoparticles isolated by in situ grown polycrystalline graphene hollow spheres for enhanced lithium ion storage. Journal of Materials Chemistry A, Volume Pending Article.
17. Zhao, X., Hayner, C. M., Kung, C. M. & Kung, H. H., 2011. In-plane Vacancy-Enabled High-Power Si-Graphene Composite Electrode for Lithium-ion Batteries. Advanced Energy Materials, Volume 1, pp. 1079-1084.
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