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Europeans and other western nations have dominated automotive excellence for over a century. Whether it is the satisfying thud of the door closing on a Volkswagen from Wolfsburg, or the beauty of a Ferrari from Modena, these brands are iconic – and very lucrative for their manufacturers. When we think of reliability, the Germans, and latterly the Japanese, have had it sewn up. But if you rest on your laurels, an upstart will soon be chasing at your heels.

The Chinese are not exactly upstarts in the traditional sense: it’s more than a decade since they surpassed America to become the most prolific car-makers in the world. But despite reaching that milestone in 2008, China’s cars were still mostly clones of cheap western vehicles.

Now, however, China is arguably producing the best cars in the world, and on track to dominate auto manufacturing. How did this happen, and will the west be able to regain its crown?

Advantage, Beijing

The centre of excellence in car manufacturing moved from Europe at the turn of the 1900s to the US with the growth of Detroit as the world’s auto powerhouse. The 1980s and 1990s saw Japan and South Korea surge ahead, only for Europe to rise again in the early noughties as Volkswagen duelled Toyota to be number-one manufacturer by output.

Each continent has added its own flavour along the way, from innovation in safety in Europe to volume production in the US to lean manufacturing in Japan. It was Toyota’s manufacturing systems that saved German-owned Porsche when it was facing dire business conditions in the 1990s, for instance.

China has gradually built its auto-making capabilities during these different eras. It originally began making Soviet-designed utility vehicles under licence in the 1950s, before its state-owned companies reached similar arrangements in joint ventures with western manufacturers like General Motors and Volkswagen in the 1980s. This produced cars that were far better designed and more sophisticated, and soon China’s roads were becoming choked with western clones.

But if that steadily elevated China to number-one world carmaker by output, it can now go one better. The goal for any automotive nation is to produce vehicles of outstanding quality at the lowest possible price, simultaneously delighting the owner with innovative features and good design.

Vehicle quality is both about simple reliability and also what we would describe as build quality: how well the vehicle is finished, the uniformity of the paint finish, how well the different panels on the body align, and even – as Volkswagen made famous – the sound the doors make when they close.

Japanese and Korean vehicles have dominated reliability, while build quality has been the preserve of the Germans for mass-manufactured cars, and British names like Rolls-Royce and Bentley at the luxury end (ironically both are owned by the Germans).

China is now a major threat on both fronts, having had the advantage of maturing most recently: as each new nation learns to produce vehicles at scale, they benefit from all the learning and technical developments that have gone before. Incumbent nations would have to start from the ground up to unlock these benefits, which is an enormous upheaval and expense. Many US car plants were built in the 1950s or even before, for instance.

China is also well placed to build cars for the right price. It still pays relatively low wages and has millions of skilled workers steeped in the nation’s strong manufacturing culture. Skilled workers are vital to reducing automotive costs because they make vehicles that need fewer adjustments or rebuilds.

China also has excellent shipping links, with many auto factories close to Shanghai, the world’s largest shipping port. This includes Tesla’s gigafactory, one of the largest facilities in the world, capable of producing around 2,000 cars daily. Getting the product out, shipped and with the customer quickly reduces costs because manufacturers get paid sooner. Also crucially important is China’s huge components supply-chain, which is already a large exporter of car parts to other nations. This all adds up to huge economies of scale that don’t exist anywhere else, and are difficult to replicate.

Changing of the guard

Admittedly, some Chinese vehicles in the past decade have not had the design or performance expected by western buyers, so have not sold in enough volumes in Europe to worry the establishment. Yet this is changing rapidly. Start-ups like Polestar (owned by Volvo) are building vehicles that combine excellent build quality and the safety features, design and performance that western buyers demand. Sales of the Polestar 2 electric SUV have actually outpaced the Tesla Model 3 in Sweden and Norway at times, albeit the Model 3 is still the bigger seller overall.

Comparing vehicles that are built both in the west and China is particularly illuminating. Tesla’s Model 3 and Model Y cars are both built in the US and China, and owners in Europe have reported that the Chinese versions are better. I hear that their all-important panel gaps are tighter, and fewer trips to the repair shop are required.

Polestar and Tesla both have very modern factories and are fully electric. Both are designed in the west, as is BMW’s iX3, another fully electric SUV built in China for export back to Europe. Like Polestar and Tesla, the iX3 is taking advantage of China’s supply chain in EV batteries, among other things.

Yet Chinese-designed and built vehicles are not far behind in their design (if not equal), and starting to invade European markets. Xpeng is one Chinese start-up that only produces electric vehicles. Having sold well in China, it is making its first moves into Europe via Norway with its G3 model. Reviews of this compact SUV by the established auto press have been good. Meanwhile, Nio is another Chinese manufacturer making great strides in becoming a global name in pure electric vehicles.

It is early days for these entirely Chinese-designed cars to take on the establishment, and there is always the possibility that geopolitics upsets progress, but it finally seems that all the ingredients are there. The next revolution in automotive is replacing petrol and diesel vehicles with electric. With all of China’s advantages, it could yet lead this shift, and finally become the home of the best cars in the world.

Tom Stacey, Senior Lecturer in Operations and Supply Chain Management, Anglia Ruskin University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Europe is facing an energy crisis thanks to low wind-power generation, broken connections that allow electricity to be shared across nations and shrinking nuclear energy sources. The UK has responded by burning more gas to produce electricity – but gas prices are at a record high. The result is that wholesale electricity costs are at their highest levels in years, and this is having a knock-on effect for anything that uses electricity.

One benefit of owning an electric vehicle (often abbreviated to EV) is that they are usually cheaper to run, even if the cost of buying one is higher. Driving an EV 100 miles will, on average, cost around £4-6 (US$5.50-8), compared with £13-16 in a petrol or diesel car.

In the first half of the previous decade, nearly all public chargers in the UK were free to use. Back when I drove my first EV in 2013, I travelled between public charging stations, frustrated by the car’s paltry range of under 100 miles on a full battery. I stuck with it though, because not only was my sacrifice better for the environment, my fuel was free too. And even when it wasn’t free, it was still significantly cheaper than running my old diesel car.

While it is true that fossil-fuel prices are rising too, motorists need good reasons to dump their old vehicles and switch to electric. But as electricity prices rise – and with them, the running costs of the average EV – where does that leave electric-car owners and those contemplating becoming one?

What does it cost to charge an EV?

In 2019 and 2020, the average price per kilowatt-hour (kWh) of electricity in the UK was around 18p. The data for 2021 hasn’t been published yet, but an online quote from one of the UK’s big six energy providers shows an average cost of around 24p per kWh for September 2021.

A car with a 50 kWh battery would cost around £9.50 to fill (allowing for some energy loss during charging) at 2020’s average rate. At the September 2021 rate of 24p per kWh, that same car will cost around £13 to charge, and that charge would be good for 200 miles. Filling up your EV will still cost you half of what it costs to fuel a petrol or diesel car. But public charging rates vary wildly, from around 24p per kWh at some rapid chargers to 69p at other units at motorway service stations that offer super-fast charging.

At 69p, the full charge will cost £34.50, which is equal, or in some cases more than using fossil fuels. Of course, you’re unlikely to charge your EV from completely empty to completely full, so some of that energy would be at a cheaper rate. But even so, the financial benefits of switching to an EV don’t look so strong when electric costs are high.

Where does that leave EVs?

Even though electricity prices are increasing, an enduring benefit of EVs is that they are what researchers call “energy source agnostic”. Vehicles with an internal combustion engine typically need fuel refined from oil and have been designed for over 100 years to run on fossil fuels. EVs run on energy stored in batteries, and those batteries are effectively indifferent to where the energy comes from. It could be nuclear power, hydroelectric power, or solar power generated by photo-voltaic panels on the roof of a house. Again, these panels will cost money to be installed (although prices are falling every year), but once they are installed and the sun is shining, you can charge your car while it sits on your drive. When you consider that the average car isn’t used 95% of the time, it gives plenty of time to charge up from the sun for free.

Let’s also think about the times national power generation networks produce too much electricity. It seems unbelievable in the midst of an energy crisis, but there are times when the national grid generates so much power that operators don’t know what to do with it. This phenomenon was more prevalent during the peak of COVID lockdowns, when some energy companies even paid customers to use renewable sources rather than switch them off. Electric vehicle batteries were the perfect sponges to soak up this excess power.

Many countries are building more resilient power networks based around generating electricity when it makes sense – capturing the sun when it shines and the wind when it blows – and storing that in huge grid-scale batteries known as megapacks, to use when renewable electricity isn’t been generated. Electric cars could be part of that storage too, and trials are ongoing to assess the viability of vehicle-to-grid technologies, which allow car batteries to transfer their power to the local grid during a shortage.

If you charge your car on energy rates that apply to your home (and remember, electricity is priced around supplying a home’s power needs, not charging more than 50 kWh of car battery each day too) your costs will almost certainly rise. But if you are smart about when and how you charge your EV, you could benefit from very cheap, if not free fuel costs for years to come. EVs may even become an important part of how energy networks balance supply and demand, controlling costs for everyone’s benefit.

Rather than being more expensive to fuel in an energy crisis, EVs, and their huge grid-connected batteries, could actually help prevent future crises and high prices.

Tom Stacey, Senior Lecturer in Operations and Supply Chain Management, Anglia Ruskin University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Electric cars could help to power millions of households in the coming years, simply by harnessing their battery power. The electricity in the vehicle’s battery could be plugged back into the grid, instead of being stored. The technique was pioneered in Japan and our research will help understand how best to use it in the UK.

Many electric vehicles (EVs) are being produced with the ability to use their onboard battery to send power back to the electricity supply they are connected to. Whether that is the owner’s house, or the electricity grid more generally, these technologies have been led by governments and electric car manufacturers mainly in order to balance the demand on the power transmission network, or grid.

The ability to use these huge connected batteries complies with the future management and provision of cleaner grids – instead of burning fossil fuels to generate electricity, we should harness clean renewable sources such as wind and solar when abundant, and store the electricity in batteries for when not. So by charging electrical vehicles from renewable sources, we can lower our greenhouse emissions.

The plan sounds great, but is made tricky because electricity is difficult to store. But we already store huge amounts of electricity – in our cars. With around 1% of the UK’s 27 million households currently owning an EV, each with an average 60kWh battery, these 300,000 EVs could store an incredible 18GWh of electricity which could usefully be used to power houses. That’s more than the Dinorwig pumped storage plant in Snowdonia, the UK’s biggest storage facility, which stores around 9GWh.

By 2030, the UK could have almost 11 million electric vehicles on the road. Assuming 50% of these vehicles were able to feed unused energy back into the grid, this would open up opportunities to power 5.5 million households.

How do we make it happen?

In order to allow cars to power the grid on a technical level, three things need to happen. First, a two-way transfer of power from the car to its charging point should be made possible. This system is known as vehicle-to-grid and was first introduced in Japan after the Fukushima disaster and the following power shortage.

But there are more areas of development needed to roll out the technology. These include vehicle-to-grid charging hardware installation at home, vehicle compatibility, and energy market changes. There are also two competing types of rapid charging equipment, which will need to be addressed, perhaps with units that have both types of connector.

The third part of the technical puzzle is ensuring support from the power distribution networks. Some parts of the grid are incapable of having a significant amount of power being dumped back through the connections at the same time so local networks need to ensure they can cope.

Engaging drivers

Once the technology is all in place, how do we make sure that people engage in the scheme? We are researching consumer acceptance and knowledge of vehicle-to-grid systems, with a view to show drivers how the technology works and prevent their batteries from being flat when they’re needed.

At the moment, most trials are undertaken by energy companies or power distribution companies, who want to figure out how the technology works commercially and to help balance the power grid. But we believe focus should also be directed to cost benefits, eco-credentials and convenience for drivers.

Charging electric vehicles with the cheapest energy and selling energy back to the grid at the peak time could enable customers to earn as much as £725 a year. This is in addition to the fuel cost savings: an EV costs on average £500 a year to run versus £1,435 a year for a petrol or diesel.

Reducing the impact on the environment, saving on fuel costs, and powering your house on cheap, clean energy, are all great benefits, but instances of low car battery could lead to a lot of disgruntled owners.

Other concerns also include: the potential costs of installing compatible V2G chargers at home; impacts on lifestyle, and inconveniences of delayed plug-in electric vehicle charging (if the car is powering the house); and the fear of battery degradation (which some research indicates is justified, but outweighed by the potential benefits).

The UK’s electricity and gas regulator, Ofgem, intends to invest millions of pounds in creating a more flexible energy system to support the electrification of vehicles and the generation of renewable energy, and to make the transition to a low-carbon economy more fair, inclusive and affordable.

If enough drivers were to take advantage of the vehicle-to-grid technology, the UK could gain power generation capacity of up to ten large nuclear power station and reinvest the saving cost in developing clean energy and flexible energy system.

The process won’t be smooth. Solutions are numerous, but will need support from power companies, and even car manufacturers and finance companies. There are lots of parts of the puzzle to solve, but as the average car is unused 95% of the time, chances that its power source could be used for greener and cheaper living are enormous.

Tom Stacey, Senior Lecturer in Operations and Supply Chain Management, Anglia Ruskin University and Ying Xie, Professor in Supply Chain Management, Anglia Ruskin University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Nissan recently announced a new £13 billion investment to help transition its business to being focused around electric vehicles (EVs). The investment is centred around its Sunderland plant in the north east of England, which already makes the popular Nissan Leaf, and a plan to build 23 new electric models by 2030.

But Nissan, like most traditional automakers, has a long way to go if it wants to catch Tesla. Elon Musk’s company is easily the biggest seller of EVs in the world, with the Model 3 and Model Y shifting around 230,000 vehicles per quarter between them worldwide. China’s SAIC is in second place thanks to its Wuling Hingguang Mini, which is the best selling EV in China. After that come Volkswagen, BYD and Hyundai.

So why are many of the traditional players that have built their businesses on internal combustion engines so far behind Musk, and can Nissan buck the trend?

Why some have struggled

Tesla created the first serial production EV with lithium-ion batteries in 2008 with the launch of the Roadster sports car. It has gone on to evolve a suite of vehicles whose range, performance and efficiency are arguably the best in the business – as reflected by the company’s impressive growth and profitability.

It makes sense that if you have been making EVs for the last decade, you’re probably more successful at making them now. You will have vastly more data in terms of how drivers use your vehicles, what goes wrong with them, and how to best manage suppliers of motors and batteries.

Nissan has certainly served its time, having debuted the Leaf in 2011, which is one of the best selling EVs of all time, having sold half a million units over a decade. But if there has been a lesson in this sector, it’s that being successful at making vehicles with internal combustion engines does not guarantee success at making EVs.

An example is General Motors (GM). GM was there all the way back in the late 1990s with its ground-breaking EV1. These little cars, loved by their owners, showed how an all-electric future could look. But GM went on to crush the EV1s en-masse, saying they were insufficiently popular, though conspiracy theorists have questioned whether it was ever serious about taking them to mass market. In the process, EV1s became the star of their own documentary.

GM tried again to crack EVs with its Volt in 2010, which was also popular until being killed in 2018 (the demise was blamed on an ageing production facility). It also launched the Bolt in 2017, which was designed to be a relatively cheap, long range EV. But while it achieves this, it has been plagued with battery issues. The knowledge that Bolt packs can catch fire has become so pervasive that car parks in the US have reportedly been banning them from entering.

GM says it now has a solution, and has recalled tens of thousands of Bolts to have their battery packs replaced. But as a result, production of new Bolts is currently suspended until late January. GM also promises some 20 new EV models by 2023, but recently came in for criticism after displaying no EVs at the 2021 LA Auto Show (whose theme was electrification). Given that President Biden recently credited GM with leading the industry in EV manufacture, this surely raises eyebrows.

Toyota was also a key player in moving the industry to greener vehicles with its hybrid cars of the late 1990s, but is now also playing catch up. It has only just, in December 2021, released its first volume production EV, the bZ, after going much further than others with developing hydrogen-powered vehicles. Toyota’s hydrogen-powered Mirai failed to gain market share in the way that EVs with batteries have, selling just 316 in Europe in the first half of 2021. Toyota is reportedly also teaming up with China’s BYD to launch a US$30,000 EV in 2022.

Meanwhile, Volkswagen is the legacy automaker seen as most likely to catch up with Tesla’s EV production rate – potentially by 2024. The German giant is spending some €35 billion (£29 billion) on the sector. But Volkswagen acknowledges that it takes them three times as long as Tesla to make its flagship EVs, making the gap in capabilities painfully apparent. It aims to narrow the gap to double in 2022.

Nissan’s advantage

If we have learnt anything from Tesla and also Chinese EV entrants such as NIO, BYD and XPeng, it’s that bespoke electric chassis make better electric cars. For example, Tesla’s Model 3 rival, the Polestar 2, was originally meant to be a petrol Volvo S40, but adapting an internal combustion engine vehicle to be electric just doesn’t work as well. You end up with cars with less range on the battery and often less space inside.

Fortunately for Nissan and its alliance partner Renault, they already have such a bespoke EV platform. Known as CMF-EV, it allows the group to share a number of components across different EVs and maximise the efficiency of manufacturing them.

From observing Tesla, the second vital factor to producing EVs at scale (and profitably) is to make your battery packs as close to the final assembly factory as possible, reducing transport cost and time. Again, Nissan ticks this box. Its Sunderland plant, which not only produces the Leaf but will also produce its successor, is situated very close to the Envision battery “gigafactory” that supplies it. Chinese-owned Envision plans to produce 38GWh of batteries a year – enough to power 500,000 new cars, which would put Nissan on par with Tesla’s factories in the US and China.

So with its years of EV knowledge, efficient battery supply chains and bespoke EV platform, Nissan could very well be the legacy automaker that ends up being able to compete with the new kids on the block. But if it fails to capitalise on its advantages to reinvent itself as an EV-first company, we have seen from numerous other companies that being an early runner is certainly not enough on its own.

Tom Stacey, Senior Lecturer in Operations and Supply Chain Management, Anglia Ruskin University

This article is republished from The Conversation under a Creative Commons license. Read the original article.