The federal government's recently updated mandate that all passenger vehicles sold in Canada must be zero-emission vehicles by 2030 is going to change the landscape for fleet operators and the general public alike.
A major question the mandate raises is whether there will be enough supply of EVs. According to recent research by the C.D. Howe Institute, the automakers will need to supply about 1.5 million EVs a year, or 70 to 75 percent of vehicles sold, in order to meet the mandate.
There have been recent suggestions that electrified vehicles and components – particularly batteries – may be built in Canada. For example, Stellantis CEO Carlos Tavares said in a July 2021 press conference that Canada could be a location for the global automaker's two planned North American battery plants.
However, the question remains if the manufacturing capacity can be ramped up quickly enough to meet demand, or if Canadian fleets will be forced to purchase or lease imported vehicles. "Making production facilities is hard," said Brian Livingston, one of the authors of the C.D. Howe Institute report. "The real challenge is you've got a nine-year plan and you don't have a battery in sight."
Adding to the pressure on battery supply is the re-emerging trend for fleets to adopt a battery swapping strategy over fast charging. “Instead of quickly charging the battery, battery swapping solutions aim to physically replace a depleted battery with a charged one,” explained Christopher Robinson, director of research at Lux Research. “Battery swapping can address two main challenges with fast charging: It slowly charges depleted batteries to minimize grid impact and battery degradation, and it allows for faster addition of range in electric vehicles.”
Robinson is lead author of a new report by Lux Research that found battery swapping has become a viable and competitive strategy for fleets, after failing 10 years ago. Systems currently on the market use robotic lifts to raise the EV and change out the heavy battery pack, so users can simply drive in and switch to vehicle with a freshly charged battery on-board. Fleets buy the vehicles lease the battery packs and pay for the service. The study found that swapping is currently most cost effective for very large fleets of over 10,000 vehicles, and pointed to China as having the best economics at the moment. However, it also suggested that early adoption there suggests the concept will gradually become cost effective around the world.
Autonomous driving has been delayed by the Covid-19 pandemic, analysts say. With testing programs having to shut down around the world, research was set back.
However, the pandemic also encouraged the use of smaller scale autonomous vehicles to provide services such as home delivery of groceries and meals. Lux Research highlighted three examples in China and the U.S. where driverless shuttles were repurposed from carrying humans to delivering goods as a result of the pandemic.
Deloitte suggests that such services may act as a gateway for autonomy by making it more familiar to consumers. It predicts that the market for autonomous delivery robots will grow almost 50 percent a year from 2020 to 2025.
However, others are less optimistic about the potential for autonomous driving at any scale. Francesco Biondi is a human factors researcher at the University of Windsor in Ontario. He believes that autonomous passenger cars are a long way down the road, and that at least partial autonomy is likely to see success sooner for trucking fleets.
"Truck drivers can be trained to a larger extent than passenger vehicle drivers, and in terms of control and monitoring of their activities, at least in theory, that's something that is much more feasible than controlling, spying on every single passenger vehicle driver," he said.
Biondi believes that the engineering community, which has been talking about autonomous driving for more than a century, has a built-in bias against humans. "The engineering community, of course, always feels very confident about technological innovations. There's definitely over-estimation, over-confidence, in what the technology can do. And at the same time, [there's an] under estimation of what the human driver is capable of doing," Biondi added.
Although mobility-as-a-service (MaaS) remains largely untested at scale, according to the International Transport Forum (ITF, a United Nations agency), it is poised for growth. A forecast from analyst firm Research and Markets suggests the global mobility-as-a- service market to grow with an annual growth rate of 26.9 percent from 2020 to 2026. Likewise, Statista predicts that by 2025 around 45 million cars will be in global carpooling fleets, up from 23 million in 2020 and only eight million in 2015.
"The concepts underpinning MaaS – user-centricity, seamless digital experience, bundled services and integrated payment and information management – have the potential to address persistent and growing mobility challenges across different contexts and world regions," is the ITF's optimistic view of the trend in a report published this year.
The rapid development of MaaS is likely to be propelled by several trends. The continued urbanization of populations makes it easier for shared services to be used by enough people to make them cost effective. Likewise, digitization is critical to its success, and the unrelenting shift towards connected vehicles enhances the chances of success.
For fleets, it offers opportunities for reduced vehicle ownership and potential savings. However, it won't make sense for all fleets. It might make sense for those where the need is for simple movement of people between two points, while fleets that need to carry equipment of have specific needs might be more likely to require specialized, customized vehicles.
The ITF cautions against an overly optimistic view. Despite the potential benefits of MaaS, because it has been largely untried, there is "little available evidence regarding its impacts, either positive or negative", ITF said in the report. Further, a viable business model for MaaS – as well as many of its component parts – is unclear, the agency concluded.
Ride sharing encompasses a wide range of services, from traditional carsharing, peer-to-peer (P2P) carsharing, e-hailing, ridesharing, bikesharing, demand-responsive transit (DRT), and mobility-as-a-service (MaaS). All initally suffered as a result of the Covid-19 pandemic, which saw people forced to stay put during lockdowns. As the pandemic wanes, however, preferences are changing, indicating that some parts of the sharing marketplace will bounce back more quickly than others.
An early 2021 study by consulting firm Deloitte found almost 60 percent of Canadians reported they would decrease their use of shared transportation modes due to the need for social distancing. As well, Deloitte found that 80 percent of Canadians planned to rely on their own vehicle for trips instead of public transit. But, according to Ryan Robinson, Deloitte's automotive research leader, that is shifting back to pre-pandemic levels.
As a result, of the pandemic-induced shift away from shared mobility, providers in the market have been pursuing strategies to mitigate the steep decline in demand for services. In the short term, operators have diversified their business models to include delivery services for groceries, food and e-commerce packages.
However, according to analyst firm Frost & Sullivan, by 2025, the industry is expected to rebound with global revenues for the shared mobility market estimated to reach US$1,002.84 billion, up from $305.92 billion in 2020, with expansion at a double-digit compound annual growth rate (CAGR) of 12 percent.
"As economies gradually open up, mobility companies have demonstrated their agility and resilience to recover, with business innovation and technology taking center stage, whether through rethinking their business models or repurposing fleets to support frontline workers and healthcare institutions during the pandemic," said Geraldine Priya, mobility project manager at Frost & Sullivan. "Consumer preference for single-occupancy modes, reduced fear of infection, and the increasing emphasis on sustainable mobility will expand the micro-mobility segment, which includes kick scooters, e-scooters, and bikesharing, over the forecast period."
Covid-19 has unlocked opportunities for the connected cars industry due to the significant increase in technology implementation in this space. Demand for innovative features such as bio-based health monitoring and non-touch-based haptics, such as gesture recognition, has increased due to the urgent need for driver protection and risk aversion.
In 2021, the global sales of new vehicles with connectivity features are estimated to reach 50 million units after an eight percent dip in sales in 2020, according to recent analysis from Frost & Sullivan, the Global Connected Cars Outlook, 2021. Increased monitoring capabilities in these cars may aid in the ability of the ridesharing sector to rebound by providing a better sense of security that the vehicle is indeed clean and germ free.
On the flip side, connectivity presents the threat of hacking and exposure of personal data to potential criminals. In its 2021 study of consumer attitudes, Deloitte found that three in five Canadians would fear hacking in a connected car that could threaten their physical safety or privacy.
Deloitte found that people were most concerned about sharing biometric data collected in the cockpit, such as heart rate, with 58 percent saying they found this somewhat or very concerning. This was followed closely by concern about mobile phone usage and vehicle location. On the other hand 44 percent of Canadian said the little concern about data regarding the car's status being shared.
According to new research by UK-based cybersecurity firm Pen Test Partners, it's not just the car that can be a weak link. Numerous EV chargers the company reviewed were found to have flaws that could allow a hacker access to user accounts and possibly even access to home networks, as well as the ability to possibly overwhelm the electricity grid. "Manufacturers have exposed users to fraud and/or prevented their cars from charging. They’ve also unintentionally created a method for others to de-stabilise our power grid," the company said in its analysis.
This is a significant issue that fleet operators need to be aware of, with potentially scores of users accessing public charging grids and possibly allowing hacks or fraudulent use of charging accounts.