Electric Vehicle Revolution Will Slash Travel Costs in Cities

Autonomous and shared mobility, digitalization and decentralization of energy systems require new approaches to electric mobility, according to the World Economic Forum’s report Electric Vehicles for Smarter Cities: The Future of Energy and Mobility.

The report, produced in collaboration with Bain & Company, examines the major trends affecting the transformation of energy and mobility systems, with a special focus on cities. In this context, it considers electrification, decentralization and digitalization of the energy system, along with the shift towards shared mobility and autonomous driving.

The report calls for the urgent integration of urban-energy-mobility patterns to accelerate the ability of cities to meet climate goals, support energy efficiency and foster innovation of services and infrastructure. Combined, these could dramatically increase productivity and generate economic growth, ultimately providing great benefits to citizens.

In the US alone, achieving the transformation will quadruple value for society by 2030, a gain that could be worth up to $635 billion. As the share of journeys made by electrified vehicles increases, the energy system will see:

  • A reduction in cost per mile of up to 40% as a result of increased use of electrified autonomous vehicles (AV)
  • Additional flexibility for energy system management as electrified non-AV and AV fleets of public, commercial and mobility-as-a-service vehicles connect to smarter charging and ancillary services
  • Lower carbon emissions driven by increased use of solar and wind energy to meet demand for the electricity required to power electric fleets

Cities leading the charge on electric vehicles

Berlin, Germany: The EUREF Campus business park hosts technology companies and research institutions, and offers charging stations for electric vehicles (EVs) as well as inductive charging for fleet operation. Its microgrid uses artificial intelligence to optimize EV charging and send energy surplus back to the grid, based on dynamic pricing.

Buenos Aires, Argentina, Montreal, Canada and Santiago, Chile: Have all prioritized the electrification of public transport through the public procurement of electric buses.

Dortmund, Germany: The city is developing non-financial incentives for last-mile delivery companies to electrify their fleets: EVs receive permission for extended access to the city centre.

Guangzhou, China: The city plans to speed up bus electrification and aims to reach 200,000 new units in 2018. China’s government has also announced it will develop national regulations for testing AV on public roads in cities across the country.

Hong Kong SAR: The local government encourages developers to scale-up the EV charging infrastructure. This includes solutions integrated with the smart payment system, Octopus, which is also used to access the public transport network.

Los Angeles, USA: The Los Angeles Police Department (LAPD) decided to switch 260 fleet vehicles to EVs. Charging infrastructure development is also under way and being integrated with decentralized solar power generation. By leasing rather than buying vehicles, the LAPD can invest in charging stations, including fast-charging stations in city centre car parks.

London, UK: The Transport for London office requires all new black cabs to be electric or emission-free, and diesel vehicles will not be permitted in London by 2032. A total of 80 charging points will be dedicated to black cabs, with plans to implement 150 by the end of 2018 and 300 by 2020.

Oslo, Norway: The city plans to have its fleet of 1,200 public vehicles using electricity by 2020, has introduced restrictions on cars entering the city centre and granted access to priority lanes for shared EVs only. A project in Vulkan on the city’s outskirts demonstrates a public-private cooperation model between the city, a utility company and a real-estate firm for smart charging stations.

Paris, France: The region of Ile-de-France and private partners developed Autolib, an electric car sharing service with 4,000 EVs and 1,100 charging stations with more than 6,200 charging points across the region, accessible to service users and other EV owners.

San Francisco, USA: The Department of Motor Vehicles provides licences to test driverless cars on public roads in the Silicon Valley as part of an experimental programme.

Recommendations for action
The report gathers and analyses practical examples and best practices, which can be tailored to local specificities. The principles – required for action by both public and private sectors – and their corresponding recommendations are described below.

Take a multistakeholder and market-specific approach: A comprehensive approach to electrification of transport will require engagement of stakeholders from different industries and sectors and may vary significantly across different markets based on the local energy mix or mobility patterns.

Prioritize high-use vehicles: The shift of the approach to transport electrification, through advancing and reforming regulation, should prioritize high-use vehicles, such as fleet and autonomous vehicles. The goal is to accelerate the electrification of miles to maximize the value creation.

Deploy critical charging infrastructure today while anticipating mobility transformation: In the context of mobility and energy systems transformation, planning charging infrastructures is critical to cope with the risk of stranded assets as well as ensure the sustainable implementation and use of the charging stations and hubs.

“The convergence of mobility and energy strategies can magnify the economic and social benefits of electric mobility in cities, and ensure increased sustainability, reliability and customer choice”, explains Roberto Bocca, Head of Energy and Basic Industries, Member of the Executive Committee, World Economic Forum.

“Autonomous vehicles and grid edge technologies are around the corner, and cities, in particular the smartest ones, will deploy them at rapid pace. The mobility and energy players should start building strategies and business models now to embrace these changes and leverage them for sustainable and profitable growth”, added Joseph Scalise, who leads the Americas Utilities and Alternative Energy Sector at Bain & Company.