The future of electric vehicles: 3 predictions for 2023
You don’t need to be clairvoyant to predict that more electric vehicles (EVs) will hit the road in 2023. It’s official: EV adoption has accelerated rapidly, and is now mainstream. In the UK, battery electric vehicles (BEVs) made up around 17% of new cars registered in 2022, making them more popular than diesel engines. And that trend doesn’t show any sign of slowing; EVs are forecast to have a 67% adoption rate across Europe by 2030. Thanks to significant investment, innovation, and regulatory support, EV owners have ceased to be seen as outliers. Instead, they’re merely early adopters of what will soon become ubiquitous technology.
Sustaining that growth is less straightforward, however. Though EVs are becoming more popular with consumers, they’re still in their relative infancy. As consumer demand and market competition increase, EVs will need to evolve – and fast. So what’s next? Here’s what we expect to happen in 2023.
EVs leverage data to add new use cases
Competition in the EV market is hotting up. Though Tesla still dominates, nearly every legacy car manufacturer has now launched an electric model to catch up. They’re joined by an influx of startup challengers in the fight for customers’ attention (and wallets).
The winners will be those that can create the best customer experience – and that means adding new use cases to EV apps that increase functionality, convenience and cost savings. Ultimately, there’s still an experience gap for EV owners. There are obvious infrastructure issues, like the patchiness of charge point coverage. But there are other problems too, which are much lower-hanging fruit to solve. Today, the apps consumers use to manage their vehicles don’t often do much besides surface data like model details, location, and sometimes state of charge (SoC). Failing to enable them to action that information is missing a trick, and limiting the amount of value they can get from their EVs.
As we get closer to the promise of the software-defined vehicle, we expect to see lots of new functionality added to EV apps to increase their value for consumers. 4G connected vehicles contain a massive amount of data that can be displayed and leveraged. Take SoC data. It can power a range of new use cases like trips and charging statistics, fleet management and e-mobility. But the first we expect to see become table stakes is smart charging. With smart charging, drivers can set a time when their EV should be fully charged the next day (e.g. 7am). Then, their EV app can automatically trigger the car to start charging when prices are lower when renewable energy is available. It saves them money and helps them reduce their carbon footprint. This is something that every EV owner will soon expect by default.
EVs accelerate the transition to renewable energy
Electrification of transportation could eliminate up to 16% of today's emissions – but only if we can power EVs with renewable energy.
Today, that’s not possible. Or at least - not consistently, and not at scale. Solar and wind power is, by nature, intermittent. That presents a challenge, as we need to consume electricity simultaneously as it is being produced. One solution would be to build more capacity into the grid. But that would be an enormous infrastructure project. Rystad Energy estimates that it would be necessary to install solar and wind capacity that produces at least 150% of the energy needed throughout a year to power Germany by renewable energy alone. And even then, there would still be times when demand outstripped supply. In many countries, much larger over-capacity would be needed, especially as more and more consumers switch to EVs.
The other solution is to use EVs more flexibly – like in the smart charging example above. One of the good things about EVs is that they’re idle and plugged in for most of the day. Because they don’t need to consume energy all the time, they’re well-positioned to respond to fluctuations in production. Doing so could have significant impacts, since 30% of household electricity consumption comes from EV charging.
Alongside smart charging, we can also expect EVs to be used as Virtual Power Plants (VPPs). EV batteries can be used to capture renewable energy when it’s abundant and store it for use in times of deficit, helping stabilize the grid in a world of intermittent supply. Creating that demand-side flexibility means we can continue accelerating our transition to renewable energy, even as millions more EVs connect to the grid.
EVs turn to open energy to win customer share
All the above - connecting consumers to their EVs and connecting EVs to the grid – requires infrastructure. That connectivity is provided by Application Programming Interfaces (APIs), which make it possible to transfer data to and from the EV, including automatic commands to stop and start charging, for instance.
Each EV comes with its own API, but they’re not all made equal. They’re not all publicly available, they don’t share the same data, and they’re not all consistent or quick enough to power the use cases consumers will soon demand. That means the people building EV apps for consumers must develop and maintain their own APIs to ensure consistent performance. That’s not easy to do – and with 400 new EV models expected in 2023, it’s about to get much more challenging. Instead, EV app creators will start to rely on Open Energy in order to increase functionality, get to market faster, and win customer share.
But what is Open Energy? It follows the same principles as Open Banking. Banking, like Energy, used to be dominated by a handful of legacy incumbents. They owned consumer financial information but did little with it to engage or add value for consumers. When regulators decided consumers owned their data, it opened the floodgates for fintech innovators. Consumers could share their financial data with them, and they could use it to build things like budgeting apps and robo-advisors. All of this was enabled by APIs, which facilitated the flow of consumers’ financial data between banks and fintechs.
The energy industry is going the same way. Specialist APIs that share EV energy data and plug it into apps will become the norm. They’ll help cut the technical complexity of surfacing consumer data, so innovators and app creators can focus on creating winning customer experiences, and getting them in the hands of consumers faster.
In short, we can expect some big strides forward for EVs in 2023. To stay ahead of what comes next, sign up to our newsletter in the footer below.
