Mobility continues to undergo its transformation with the rise of electrification and even a return of interest in hydrogen-powered vehicles. As electric vehicles continue their trajectory toward a critical tipping point in the market, some of the attention has shifted toward non-road transportation - aviation and shipping. Even though electrification seems to be a panacea for mobility at times, it is not the universal solution for the entire transportation sector. Falsely assuming so will lead to technical and economical challenges, as the future energy mix for mobility will consist of a wide variety of energy carriers dictated by mode of transport, range, and applications.
The global pandemic in 2020 had an immediate impact on mobility and is the most noticeable effect on modern life at the moment. As the world sheltered in place, demand cratered in the aviation, shipping, and road sectors - creating an immediate reduction in emissions and improved air quality. Decarbonization initiatives in the transportation sector are closely tied to regulatory bodies, and most around the world are broadly showing an unwillingness to relax current emissions laws while offering larger incentives for zero-emissions vehicles in the automotive sector. In the long term, demand for mobility will likely see a downturn post-COVID as more people work from home and replace work travel with virtual meetings, but the magnitude of that shift remains very much unclear. What is clear, however, is that the push to reduce and eliminate emissions from the transportation sector has not been impacted, even not even catalyzed.
In this blog, we take a look back at some of the most important developments that occurred in the Future Energy for Mobility storyline.
- Joby Aviation raised a $590 funding round, including $394 million from Toyota, to commercialize eVTOLS for air taxis. While Joby is an early leader in the eVTOL space given its longer history and more testing than its peers, Toyota badly misjudged the appropriate size and timing of this investment.
- Ehang obtained an operational flight permit in Norway, allowing it to explore serving the oil and gas industry. While opportunities in passenger transport remain limited, a push to decarbonize the O&G sector – especially in the North Sea – is a boon to eVTOL for cargo.
- Lilium added to its war chest raising $275 million in total in 2020 mainly from tech giants including Tencent, as the company continued to sign new pilot programs and partnerships in 2020.
- Rolls-Royce and Airbus cancelled the e-fan project. After launching in 2017 with test flights scheduled for 2021, a combination of COVID-19’s impact on aviation and enough learned knowledge on hybrid system ultimately killed the project.
- Texas Aircraft announced development of an electric two-seater airplane using Oxis Energy’s lithium-sulfur batteries. Aviation applications require lightweight batteries, and Oxis’s 400 Wh/kg batteries are the first usage of the chemistry in manned aviation thus far.
- LNG coalition reports increasing orders of LNG-powered vessels. Within a month of IMO 2020 taking effect, U.K.-based SEA-LNG reveals that the shipping industry has seen increasing orders for LNG-powered vessels and LNG bunker vessels and expanding infrastructure to facilitate growing demand at major ports.
- Corvus Energy expands production capabilities with $16 million investment. The investment will expand production at its Richmond, British Columbia, facility for its 20 MWh to 50 MWh battery pack, Blue Whale. Corvus Energy expects to begin shipping its products from the Richmond facility in 2021.
- ICCT report finds 43% of container vessels on transpacific routes can be completed with hydrogen. With a 5% reduction of cargo to make room for hydrogen fuel storage, 99% of the fleet could complete the journey. However, the limited supply of hydrogen today is the current barrier, with transpacific vessels requiring more than 20% of the hydrogen produced today.
- Stena Bulk offering 20% to 100% bio-based fuels for its customers. Stena Bulk is taking the shipping industry's first step by offering all of its customers the option to blend up to 100% bio-based fuels. To avoid fuel supply issues, Stena Bulk is also introducing an offsetting program for its customers; where any option for high-blend bio-based fuels is unavailable, it would be accounted for within Stena Bulk's entire customer fleet.
- Maersk, Ørsted, and other Danish companies embark on full-scale synthetic fuels project. In what is likely the most high-profile and large-scale synthetic fuels project to date, a total of 1.3 GW of electrolyzer capacity is planned to come online by 2030 to produce 250,000 MT of fuels.
- Tesla opted to use LFP Li-ion cells from CATL in short-range versions of its Chinese-made Model 3. While Ni-based chemistries captured over 98% market share in the first half of 2020, cell-to-pack technology and a desire to diversify the battery supply chain indicated LFP will have a future in passenger BEVs.
- General Motor’s announced its BEV3 platform, its first dedicated electric vehicle platform after the Bolt was build on a modified combustion engine platform. To achieve cost reductions at the vehicle level, dedicated BEV platforms are a necessity and BMW has since announced similar plans.
- Nio announced in June it had achieved a cumulative 500,000 battery swaps in its network, and just several months later announced it surpassed one million swaps. Nio’s swapping stations enable its “battery-as-a-service” model, which has proven popular with Chinese consumers in 2020.
- Nikola briefly became the darling of the SPAC craze, briefly surpassing the market cap of Ford after going public. A potential (albeit lopsided) deal with GM fell apart after allegations of fraud were leveled at the company by shortseller Hindenberg – most of which appear to be true.
- Tesla’s Battery Day outlined a series of technical innovations at the pack- and vehicle-level which provide a promising path to price parity with combustion vehicles, including increased vertical integration as it looks to enter cell manufacturing.
Additionally, the Lux Energy Team curated the following “Analysts’ Choice” for further reading on the Future Energy for Mobility storyline.
- Momentum for hydrogen fuel cell vehicles shifted from passenger vehicles to medium- and heavy-duty vehicles, and this insight forecasts a cost tipping point in the 2030’s with additional benefits in payload capacity compared to BEVs.
- Toyota remains a leader in fuel cell development, and in order to gain better access to China the company formed a joint venture with several key Chinese firms. China’s generous incentives for fuel cell vehicles make it a promising market, and this joint venture allows Toyota to access that growth.
- Ionity introduced subscription-based pricing for fast-charging services, a move Lux believes foreshadows the future of fast-charging as a way to manage the high costs of chargers and close dependence on utilization to drive profitability.
- By 2050 the shipping and aviation sectors could be facing an emissions problem to the tune of 6.1 billion MT of CO2 emissions, although as we highlight there are a variety of low- and zero-carbon solutions.
- Electric vehicles are improving quickly, and the Electric Vehicle Inflection Tracker 2020 Edition highlighted continued lower costs, longer range, and faster charging in electric vehicles sold today.
This blog is part of the Lux Energy Team's Year in Review series examining the highlights and key developments of the energy industry in 2020. For an overview of the other storylines in Owning the Energy Transition, be sure to subscribe to our energy newsletter.