As electric motor technology continues to accelerate rapidly, the tide is clearly turning in favor of electric and battery power, notably in transportation, but also in many other sectors, such as garden care, fitness equipment, and e-mobility. Many vehicle manufacturers have already announced major increases in their electrified model line ups, with some even committing to electric-only production in the not-too-distant future.
Along with stricter standards introduced by governments in a bid to reach climate emissions targets, incentives are also being offered to consumers to purchase electric over combustion (for vehicles: clean car rebate in NZ). Some countries are also proposing banning the sale of combustion engine vehicles altogether in the coming decades. Meanwhile sales of personal e-mobility options like e-bikes, scooters and skateboards are also increasing as consumers make the switch to electric/battery power.
As global events and other factors out of our control affect worldwide fuel prices, the switch to electrified motors seems like an easy choice for many consumers. But as production increases, are there any hidden costs for manufacturers of electric motors and batteries? Are there any costs that are going down? For the purposes of this article, we are going to refer to the manufacture of e-mobility, along with e-motors in garden care, fitness and industrial pumps.
Public charging infrastructure. Using a public charging station is convenient for consumers and as the demand grows, more are springing up in urban areas. Whilst some are free, such as some public car parks and fast-food restaurant chains, many charge for the service, sometimes costing as much as double what it would be from a home-based charger. Manufacturers will need to keep up with the demand by creating and maintaining the infrastructure required to power the increasing number of units they are producing.
Power stations. As the demand for electrification grows, the need for adequate electricity from the grid also needs to increase to meet that demand. More electricity generated from fuel burning sources such as power plants not only increases emissions but could push up costs in production as governments adjust to higher costs for increased infrastructure. Adding to this is increased manufacturing that goes into producing batteries, meaning not only larger carbon footprints for the products, but also potentially higher production costs. Manufacturers increasingly moving towards renewable energy sources can help to reduce production costs.
Other applications that fall into the categories of garden, fitness or industrial motors, can also have hidden costs associated with manufacturing them.
New technology. Batteries are newer in terms of technology, and that technology is advancing all the time. There is currently no mass market, meaning production costs can potentially be driven up.
Service/repairs. Many manufacturers exercise the right of repair - think of devices made by Apple or Amazon for example. This means any repairs or servicing must be done by the manufacturer's own service department, or a manufacturer certified technician. As this rules out the owner and his or her choice of service provider, this could prove more costly for them. Manufacturers also need to have adequate resources available to meet the needs of consumers' service/repair requirements. This might mean increasing facilities, personnel, and infrastructure to support this.
Reduced size, weight & noise. Electric motors used in sectors such as these have the advantages of being able to fit into smaller spaces, saving money in transportation and storage (warehouse) costs, generally weigh less than their fuel burning counterparts, along with emitting minimal noise. We can expect reduced structural costs with a lower weight, and with less noise comes lower costs involved with covers and protection. All of these points can add up to potentially reduced costs for manufacturers.
Whilst most of the costs associated with fuel burning motors are well known, it is worth noting some of the other lesser-known costs that may have been forgotten, or those that have recently been introduced. The usual costs associated with running combustion engines include fuel, servicing, maintenance and repairs, oil and other fluids, and replacement parts or motors.
Reduced investment in technology. As the use of ICEs is gradually phased out and consumers move in favour of electric motors, we can expect manufacturers to invest less in the outgoing technology as the demand for ICEs reduces. Manufacturers building motors on a smaller scale will inevitably mean higher costs per unit.
Regulations. As stricter regulations are brought in, it will inevitably contribute to combustion engines becoming more expensive to buy, run and maintain. Some countries may have further taxes imposed, or it may just be that an ICE is not even a feasible option in certain countries or environments.
Brand impact. Manufacturers of ICEs may experience a more negative impact on their brand as time goes on and electric motor technology advances, as opposed to those manufacturers who are moving their offerings to increased electric or all-electric variants. Unless brands offer at least some electric options, they will risk being left behind.
We are familiar with the usual costs associated with ICEs and as technology advances we will likely see differing costs with the gradual phasing out of fuel burning motors over the coming decades. We are also aware that the manufacturing of electric motors has its share of costs over the lifetime of the product. Initially, new infrastructure and electric motor production costs may be higher, however as the industry grows and catches up with technology, costs may begin to level out, with some of them potentially reducing. However, we don't know what will happen to the cost of electricity and what the demands will be on power plants, both from fossil fuels and renewable sources.
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