A Study on (Plug-in Hybrid) Electric Vehicle Adoption: Case Study of Toyota in Dubai and Sydney

Amit Dutta1, Gayathri Goonaratne2, and Balakrishna Grandbi2

  • 1 Ashiana Housing Ltd., India
  • 2S P Jain School of Global Management

Introduction

Marion King Hubbert, a highly learned and respected geologist who was engaged in extensive research at Shell Oil, predicted that global oil production shall peak in the year 2000 and then decline at an accelerating pace owing to a drop in pressure in partially depleted oil basins. This prediction was made 50 years ago. If Hubbert is correct in his prediction, the economic scenario looks extremely grim, more so if the reliance on fossil fuel for transportation remains at the current pace. However, it is important to note that humans, though their ingenuity, creativity and determination, have successfully averted many crisis situations which were headed for disastrous consequences.

Technological innovativeness has led to a suitable sustainable transition of economic variables and has paved the way for efficient ways and means of accomplishing required tasks while keeping the scarcity function well balanced. It has influenced and created companies to come up with innovative business models.

A plug-in hybrid vehicle (PHEV) is a form of HEV which can be recharged by plugging the vehicle to an external grid source and the internal combustion engine (ICE), which can be activated when the vehicle battery requires charging. PHEVs have the advantage of offering the range provided by HEVs along with the cost and energy savings of electric vehicles (EVS) and end the reliance on gasoline demand for transportation and allied purposes.

In recent years, starting from 2013 onwards, the number of electrically propelled vehicles have significantly increased.

As reported by Global EV Outlook 2017, Norway is the leader with a market share of 28.76% in EV/PHEV sales, followed by Netherlands with a share of 6.39% and Sweden at 3.41%. France at 1.46% and

UK at 1.41% follows suit. Further, China leads in Asia in terms of EV adoption rates with a market share of 1.37%.

As per the report Automotive Revolution—Perspective towards 2030, stricter regulations pertaining to vehicular emissions, advancement made in vehicle battery technology (which has reduced the cost of the component along with increasing its life), wider availability of charging stations and increasing consumer knowledge and acceptance of EV/PHEV propulsion technology shall in the near future create stronger momentum for the penetration of electrified vehicles (hybrid, plug-in, battery electric and fuel cell) in civil society. The rate at which the adoption shall take place will be determined by the combined effect of a strong customer pull and the regulatory push as being rightfully professed by governments across nations. However, this said interaction shall vary at the regional and national levels, at least for some more years to come.

However, over the next decade, through the continuous technology and cost improvements for vehicle battery and the improvement in charging infrastructure, these local differences shall become less pronounced, which shall result in a greater market penetration rate and share for EV/PHEV vehicles as per estimates. Amongst the aforementioned factors, the cost competitiveness achieved through greater focussed improvements in technology shall be the most contributing catalyst for higher vehicle penetration levels as compared to traditional ICE vehicles. What is important to note that as PHEVs will be a major portion of EV sales globally in the coming years, the ICE shall will be relevant in the coming decade.

Electric Vehicles

The main types of electric vehicles as distinguished by the usage of

electricity used as an energy source is as follows:

  • • HEV: A hybrid electric vehicle uses both petrol and electricity as its power source. The required electric energy is generated by the vehicle’s braking system which is then used to recharge the vehicle battery. This process is known as ‘regenerative braking’. Vehicles available in this category includes Toyota Camry Hybrid and Honda Civic Hybrid.
  • • PHEV: A plug-in hybrid electric vehicle is also powered by both gasoline and electricity sources. These vehicles recharge their battery through regenerative braking and via plugging into an external electrical charging unit. They are also known as extended-range electric vehicles or EREVs. Vehicles available in this category include Toyota Prius and Mitsubishi Outlander PHEV.
  • • BEV: A battery electric vehicle uses only electricity as its main source of power. It is characterised by the lack of a traditional internal combustion engine and a fuel tank. It is also known as a plug-in electric vehicle as it uses external charging units to recharge the batteries present. These vehicle types can further recharge their batteries via ‘regenerative braking’ and they do not produce any C02, which acts as the main polluting agent for the surrounding environment. Vehicles available in this category include Nissan Leaf and Chevrolet Bolt.
 
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