E-mobility is an energy transition enabler because of its emphasis on technological progress and emissions reduction, Peter Badík says.
Peter Badík is a pioneer of electric mobility in Slovakia and co-founded two electric vehicle service companies, Voltia and GreenWay. He is former director of the Slovak Electric Vehicle Association. The interview was first published in International Issues & Slovak Foreign Policy Affairs Vol. XXVI, No. 1–2, 2017, pp. 62 - 68.
You started doing business in e-mobility in Slovakia at a time when few people were interested in it and the government was clueless. Where does your interest in e-mobility come from?
I was active in the Slovak renewables sector and that took a different turn. So I started looking for a new company focus in what I call the “new energy system,” which comprises renewables, smart grids and storage systems. I chose e-mobility since it interconnects the whole sector. At that time, there was no company focusing on this area. However, we saw the potential in it. Compared to the power sector, the automobile industry’s innovation cycle is relatively fast. We therefore expected a fast uptake of e-mobility compared to, for example, smart grids.
That is when you launched GreenWay?
Yes. But at the time Greenway had a different focus from today. We concentrated on developing the infrastructure for charging electric vehicles in Eastern Europe. We started by supplying adapted vehicles to the commercial logistics sector. This business is now being developed under the Voltia brand.
What exactly does Voltia do?
We adapt electric vehicles for city deliveries, a sector whose fast growth is driven by e-commerce. We are currently seeing increased volume across a single area, for example in a city, and a reduction in the distances travelled. In many cases therefore the shorter driving range of electric vehicles is not a problem, but more space is needed to store parcels.
Do you see the biggest short-term potential of e-mobility in Central and Eastern Europe in the commercial sector generally?
Yes. In Slovakia as well as in the whole of Europe the logistics market is an underestimated sector from the point of view e-mobility. The problem is the lack of choice in electric vehicles. Today e-mobility is mainly being promoted in the car market.
Manufacturing the highest number of vehicles per capita, Slovakia is an auto superpower. Being so dependent on car production, why don’t we have any research in e-mobility?
We have some but not enough.
Subcontractors do research, but the large car companies don’t.
That’s not so bad. To a large extent, e-mobility is a matter for “tier I” suppliers. They supply the components. It is rare for electric components to be produced by the big car companies.
The fact that very little research is done in academia or industry is a symptom of the lack of long-term vision. E-mobility is coming and Slovakia should be part of it.
Do you believe Slovakia lacks political initiative?
Yes, enormously. And in contrast to Poland. Two and a half years ago the Polish government listed e-mobility as one of seven priorities in its plan to reindustrialize Poland. It was most vigorously promoted by Deputy Prime Minister and Minister of Economic Development and Finance Mateusz Morawiecki (designated Prime Minister as of 7 December 2017). He is the most important government official when it comes to the economy. He delegated this area to State Secretary at the Ministry of Energy Michał Kurtyka. And he goes from one event to another giving presentations on e-mobility. I have seen him at several events and his personal engagement is instrumental to setting the tone of debate across the industry.
So you think Slovakia lacks a political figure who would promote e-mobility?
Yes. Because when there is political push it has an immediate impact on the industry. I participated in the first meeting of the Polish e-mobility association. At that time the Slovak association had already existed for five years. The small room was filled with quite high-ranking industrial representatives. The industry had really jumped ahead. It is a lively sector. Some companies are refocusing on e-mobility, and research is being done. A battery factory is being built in Poland by LG, one of the world’s biggest battery producers.
Is the development based on state subsidies to an extent?
Not where LG is concerned. The government has a subsidy scheme for cities deploying electric buses.
But doesn’t one of the objectives behind e-mobility – to decrease urban pollution – contradict Poland’s continued reliance on coal power?
E-mobility is not the cause of the problem. It provides the opportunity to decrease emissions. An electric car can be solar powered – unlike the combustion engine.
The question is whether the Polish government shouldn’t prioritize renewable power over e-mobility.
We have to see things in perspective. The government’s support for e-mobility in Poland is proportional to its significance. As for policies, e-mobility cannot compete with the energy sector a whole. I don’t think the two issues are mutually exclusive. On the contrary, there has to be synergy. There is no question that Poland has to decrease emissions in the energy sector. But e-mobility is not an obstacle. It is an energy transition enabler because of its emphasis on technological progress and emissions reduction.
Let’s take a more critical standpoint. Do we really need governments to push for e-mobility? Why can’t we rely on the bigger companies and their smaller subcontractors to drive the change?
It comes down to a basic question: Should governments fund research and development? I think they should. Because funding them is too risky under normal market conditions.
The other question is where the funding should go. E-mobility is bringing about such a big change in the automobile sector that if I was the Slovak government, I would direct the funding there.
Can a small country like Slovakia influence the thinking of the big multinational companies that are the backbone of its automobile sector?
I don’t know. But it could emphasize that e-mobility is a priority. It worked in Poland. LG’s decision to invest in Poland is one of the consequences. But we don’t have to influence decision-making at LG or Bosch. We have many Slovak-based small and medium enterprises, which may benefit from the political push.
In Slovakia even subsidized electric cars are way more expensive than cars with combustion engines. Why can’t we let the market decide and wait for batteries to get cheaper and consequently electric cars too? Why do we need subsidies?
In e-mobility we need to solve three problems: the underdeveloped charging infrastructure, restricted driving range and high price of electric vehicles.
Solving these problems at least partially would have a significant impact. We can look at Norway. It has managed to solve the problems with infrastructure and price. The driving range is in the hands of the auto industry and it is increasing very quickly. One generation takes over from another in e-mobility in just two years.
As for the price, the Norwegian example shows that electric cars don’t have to be cheaper on price. They just need to be seen as cheaper overall. People need to understand that the initial price is higher, but the total cost of ownership is lower than it is for combustion engines. A subsidy could help bring about the tipping point. Besides, a subsidy is not meant to pay for the whole vehicle, but to serve as an incentive.
And if we solve the infrastructure issue, people will start looking at electric cars in a completely different way. Electric cars won’t achieve a large market share simply because they are ecological or cheap, but because people like them as a product.
If we are aware of the issues and know that uptake can occur quickly, then allocating subsidies can be very effective. They can help to overcome the clearly identified psychological obstacle. It’s not a case of throwing money down the drain. A snowball effect will start to occur.
Why can’t we wait for electric cars to get cheaper here in Slovakia?
We can, but it will delay us. If we have fewer cars, we will have an underdeveloped infrastructure. We will have to catch up later.
And indeed there are positive externalities. Electric cars are good for decarbonization, for decreasing energy dependence, for cleaner cities. We could be four or five years late in deployment. But would that be effective? Also, in Slovakia we are not talking about huge subsidies. So far maybe a million euros has been spent. There are also socio-economic concerns about the size of the auto industry.
But Slovakia exports most of the cars it produces.
Right, I do think that investing in electric cars is comparatively efficient if we just consider air quality. In Slovakia we are not talking about tens of millions of euros, but relatively small sums to launch the uptake.
It is a paradox that at the moment the European Commission has directly invested more in Slovak e-mobility through its Connecting Europe Facility (CEF) than the national government has.
You mentioned energy dependence. Electric cars could decrease it because today’s combustion engine vehicles rely on fuel imported from abroad. Won’t e-mobility create a new type of dependency on raw materials or ready-made electric batteries produced in Asia?
These are many myths around the dependency on raw materials. Battery production needs certain rare metals like lithium, cobalt, aluminium and graphite. Bloomberg calculated how the production of these materials would be impacted if electric vehicles represented a third of the world market share in 2030. There isn’t much interdependence between the materials and car production. Lithium is an exception as its annual production is expected to triple. While cobalt is expected to double. We have to take the 15-year timeframe into account.
Do we have enough experience of the life of these batteries to be able to make such precise predictions?
We can make fairly precise predictions about the amount of materials required. We can estimate the number of cars, the size of the batteries and the amount of materials.
The uptake of e-mobility will not lead to a significant lack of raw materials. Plus, from past experience, we know that if demand for a material rises, new reserves are found in places where they wouldn’t be found otherwise. This is clearly the case with lithium. Its price has doubled and suddenly we hear talk of new reserves. And it is not true that everything comes from China. The biggest lithium mine is in Australia. So demand increases supply.
The other point is that an electric vehicle battery does not contain that much lithium. At the moment, a 100-kWh battery contains about 200 euros worth of lithium. Even if the price doubled, the impact on the vehicle price would be low.
And the dependency on battery imports?
Battery production is a different issue. Questions about where the responsibility will lie are geopolitical in nature. This isn’t just about electric car batteries. Electric storage generally is an issue of crucial importance. It needs to be dealt with in a range of devices as diverse as pacemakers, cell phones and energy storage in large power plants.
The other issue with energy storage is one that provides enormous opportunities. The reason we don’t all fly drones is that we are not able to store sufficient energy. We are unable to produce a drone capable of carrying both batteries and passengers.
So you are saying that in the future battery storage will enable us to have electric planes.
That’s one example. It will enable us to have many things. But above all it will enable us to make the transition to a low-carbon economy.
If energy is carbon-free, transport will be carbon-free too.
They go hand in hand. Of course, we need to reflect on the use of batteries in electric cars. They should not just be for cars but should support the energy system. Energy storage is a number-one issue for the world industry and we need to come up with ways for Europe to maintain its skills in this sector.
Do we import most batteries today?
Yes. China produces the most batteries. But European Commission Vice-President Maroš Šefčovič has launched a very important initiative for this to be controlled from within Europe. In October, the first meeting between industry and government took place. They discussed how the situation that occurred in the solar industry could be avoided when production was moved to China. The European Commission sees energy storage as a top priority, not only in transport, but also in energy and other sectors. The institutions will not, of course, produce the batteries, but they will have to be involved as coordinators.
The Commission’s recent legislative package on clean mobility does not include quotas for electric vehicle production. What’s your view of its proposal?
First of all it is very good that the Commission is again putting clean mobility at the top of the agenda. I fully agree with the assessment that we need to stay ahead in the new era of mobility, given its enormous economic impact on three important industries – the automotive, oil & gas and energy (electric generation and transmission) sectors. And for that change to happen we need strong and clear political leadership. From this point of view, a sales target for zero-emission vehicles would be much more appropriate than the proposed general CO2 reduction target. Fortunately, it seems some countries are more ambitious than the Commission. Hopefully they will lead by example.
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