A Big Step for Mankind

The EU Commission has decided to make the EU independent of Russian oil. They have also decided to make the union fossil-free by 2045, meaning that no petrol or diesel cars, buses, or lorries will remain on the roads by that year. This may sound reasonable and straight-forward but making the EU fossil-free will involve very large investment and change efforts. The change will be much larger than the President of the EU-Commission, Ursula von der Leyen, and other high-level politicians within the EU and in national governments have realised.

To run the EU’s 240 million cars and several million transport vehicles on electricity there will be a large need for power. One nuclear reactor can cover the need of 4.4 million cars, which means that there will be a need for the power equivalent of the production of 50 nuclear reactors. About half as much will be needed to power transportation by bus and truck, some 25 additional reactors. The total need will be higher than 75 nuclear reactors, because electric cars need more power in the winter than in the summer to drive a certain distance. (It takes about 3,000 wind turbines to produce the same amount of electricity as a nuclear reactor, so to cover the need using wind it would take more than 225,000 turbines.) This may not sound like a lot, but it is! The number of wind turbines in Europe in 2020 amounted to almost 179,000.

Some of this power is already available, especially at night, when power production exceeds demand, but even to make use of this large investment will be needed. Overall, investment will be needed in a large number of areas – the topic of this article.

For the EU and the world at large to get rid of Russian Oil large-scale activities will be needed in a number of areas. All-in-all, 4 large industries will have to change from the ground up, which indicates the scale of the activities needed. Vehicle production will change to electric vehicles only, the transport industry will use only electric vehicles, oil companies will have to stop selling oil as a fuel, and utilities will have to expand production and distribution and dramatically modernise grids.  Components for the production of vehicles, power infrastructure, charging installations will be needed and in many areas present production of components will have to change to electric or expand, or a combination of both.

Millions of people across Europe and the world will have to be trained for new tasks in electric vehicle sectors and trained professionals will be needed in transportation, utilities, and industries that supply products and services to these industries. Millions is not an exaggeration. Each of these industries employs millions of people and many people outside of these industries will have to engage with the transformation to e-mobility as well. People at municipalities, real estate companies, operators of charging infrastructure, and many other areas will have to become involved in projects and decision making.

When Ursula van der Leyen says that the EU will get independent of Russian oil, she at the same time admits that the above activities will have to take place, because other suppliers of oil cannot increase their supply to Europe so that Russian imports can be eliminated in that way. However, few experts and decision makers have realised that this will be needed and nobody, except yours truly, has published books about topics like how this transformation needs to be organized, financed, and driven forward on a large scale.

To change, governments need to take the following steps:

 

Step 1: Map the Need for Chargers and Expansion of Power Infrastructure

To come to grips with the level of investment that will be needed to build charging infrastructure and expand power production and grids municipalities and utilities will need to map the need for charging in different parts of their grids. This is relatively straight-forward, because we already know how many cars there are in different areas of a city or town at different times during the day. Based on this knowledge we can estimate how many vehicles will need to be charged at different times in different areas and how much power and distribution capacity that will be needed in different parts of local grids, and how demand will create a need for expansion of regional and national grids, and power production.

In principle, this information exists, but it has to be collected and the information needs to be analysed. At night in a particular parking garage there may be 25 to 30 cars. We can make assumptions about the number that will need to be charged each night and how many will need to be charged during the day and how many chargers will be needed and the amount of power that will be required. The same can be done for all parking garages, outdoor parking lots in neighbourhoods and across cities and towns. We can also map traffic flows and estimate how many cars, buses, and trucks that will have to be charged along different roads at different times during weeks, months, and years.

Power infrastructures are designed based on the rule that capacity must always cover instances of peak demand. Peak demand is in many places likely to arise in the winter, perhaps around Christmas or during holiday periods when many people drive longer distances than usual to do sports, visit friends and family, or go on vacation. Or peak demand may arise during the coldest weekdays when large amounts of electricity is needed for heating and people still need their cars to go to work or go shopping, but on cold winter days in the North and in Central Europe vehicles need twice as much power per kilometre compared to the need in the summer. The need for charging of trucks and buses needs to be mapped in a similar manner.

All these aspects need to be covered and all areas in cities and towns need to be mapped.

 

Step 2: Train People for Electromobility Projects

To build charging infrastructure on a large scale so that a large share of vehicles can be charged on a daily basis, many people need to be involved. Most of them do not know about the need or their role in projects. They need to be trained in the basics of e-mobility and power grids to understand where expansion will be needed, what will be possible, and what will not.

 

Step 3: Calculate Budgets and Create a Financing Structure Using Different Principles for Different Purposes

The transformation will require financing on a large scale. Different aspects of the program will need to be financed in different ways. Some aspects can be financed by market-based activities and others will need significant subsidies and guarantees. Governments need to take the lead to develop the financing solutions and the principles that will be used for each type of activity.

 

Step 4: Start a Series of Transformation Programmes and Projects on Different Levels

All aspects of the transformation need to be taken care of. Vehicles will be needed, battery production will need to expand, as will charging infrastructure, power production, and grids. New services for identifying and booking chargers, payments, and route planning, will have to be developed and implemented on a large scale. Production resources for products, components, and services will have to be expanded to keep pace with the transformation.

A structure for the development activities needs to be developed in a way similar to how NASA organized and held together the different aspects of the Apollo Program. All things that had to get ready did get ready in time for the different steps in the program to be completed in a timely and secure fashion.

 

5. Manage the Program

Governments and the EU have set the goals and they need to manage the program, making sure that all activities are taken care of.

 

All the above activities are routinely performed in any other project that is started, but for some reason they have been overlooked for the transformation to e-mobility. This may be because the transformation has seemed very abstract, and it has probably been difficult for politicians and sustainability experts to envision how the programme could be structured. Based on the rhetoric it seems as if many believe that the transformation will not need to be structured, financed, or managed. Instead, it seems as if many have thought that the change will take care of itself.

No change takes care of itself. The change to electromobility will be more demanding than many other developments of the past because there are already highly efficient vehicles, transport systems, and power grids in place and the change to e-mobility will require investment and increase cost in many areas over the short or longer term.

The message to Ursula von der Leyen and other politicians, exoerts, and business leaders is that development and transformation programmes will need to be started and that sufficient budget will need to be set aside for activities. Only by doing this can the conversion to electromobility become successful.

In March of 2021 Volvo Cars announced its decision to stop producing petrol and diesel cars by 2030. The company has for several years increased its commitment to electromobility and the decision to go 100% electric, ceasing to produce all fossil fuel cars, also hybrids, stirred up little debate in the media.

 

Why Is the Decision By Volvo Cars Risky?

The decision may be the riskiest decision ever made by a listed company. Here’s why:

Electric cars have received a large amount of publicity in the media and many, including the present author, argue that the future of transportation will have to be electric. Yet, few have realised the amount of investment that will be needed by a large number of players in all countries in order to make this a reality. In addition to Volvo Cars, Ford Motor Company has decided to only sell electric cars by 2030.

At present there are less than 20 million electric and hybrid cars on the roads around the globe. This is less than 2 percent of the 1.2 billion cars of the fleets of all countries. Volvo is one of the smaller brands on the global scene, selling about 700,000 cars in 2021, which should be compared to 9.5 million sold by Toyota, the global leader of the car industry.

With only 2 per cent electric cars on the road no country has yet experienced the load that large fleets of electric cars will cause on power grids. No country has the capacity to charge a fleet consisting of 100% electric cars, considering the power production or grid capacity that will be needed, but some countries will need to expand more than others to accommodate to electromobility.

If all of Europe’s 240 million cars were electric the power equivalent of the production of 100 nuclear reactors would be needed. This is for the summer, but electricity production and grids are dimensioned for times of peak demand and in the case of electric cars these need significantly more electricity to drive 1 kilometre in cold weather than they do in the summer. This means that the power needed to charge all cars will double in the coldest weeks of the coldest winters over a 20-year period. In Northern and Central Europe, the need may double.

Large projects to expand the power supply take more than 10 years to complete, including the time it takes to receive permission to build, which means that the expansions that will be made until 2030 will primarily be the ones that have already been started, or additions to capacity that can be achieved through incremental improvement of existing installations. In many places, for example, power grids will need to be digitised or reinforced to increase the capacity, something that may be done in less than ten years.

Many of Volvo’s important markets face very large investment to go electric. In Germany the power from 21 nuclear reactors will be needed to fuel its cars in the summer, in case all cars were electric, and the need would increase significantly in the coldest weeks of cold winters. In Germany at present that amount of electricity is produced by its 30,000 onshore wind turbines, which stand for 17% of German power production. Significant investment in power production, grids, charging infrastructure, and vehicles will be needed to fuel a large share of Germany’s cars with electricity. Exactly how many that can be charged based on the existing power supply is not known. At present German power production amounts to 600 TWh and a fleet of only electric cars will require some 100 TWh of power. Exactly how much will be needed at different points of this development is uncertain.

In the UK there are 34 million cars that will require some 65 TWh of power per year, or the equivalent of the production of 15 nuclear reactors in the summer. Electricity production in the UK per capita is, however, lower than that of Germany. It amounts to 325 TWh, which means that 65 TWh amounts to 20% of present production.

In other countries the situation is similar, large amounts of power will be needed to fuel all cars with electricity. In the United States there are 280 million cars that would need power from some 120 nuclear reactors to be charged. Luckily the US has access to large amounts of power, some 4,000 TWh annually and there are 93 nuclear reactors in operation. Nuclear reactors produce the same amount of power 24/7 and there are significant amounts of surplus electricity at night, so as long as electric cars are primarily charged at night, the power surplus will cover a significant share of the charging needs. Charging at night will be the primary option, but with growing fleets of electric vehicles, an increasing amount of charging will have to be done during peak load hours in the day.

In France, Spain, Italy, Poland, all countries with large fleets of cars large investment in power infrastructure will be needed to convert their car fleets to electricity.

The need to invest in power infrastructure is so large that, according to the Wall Street Journal on the 17th of December 2020, the chairman of Toyota Akio Toyoda went public with the announcement that the conversion of Japanese vehicle fleets to electric drive would require investment of between 135 and 358 billion dollars, and he argued that this would make electric vehicles unaffordable for ordinary people.

It is probably not established that electric vehicles will be unaffordable for the majority of car owners once the level of investment in infrastructure is taken into account, but significant investment will have to be made and it is at present not known how rapidly these will be made or how long the existing power supply will be able to support rapidly growing vehicle fleets.

 

The Number of Electric Cars is Low and It Grows Rapidly Based On Subsidies

As mentioned above, only 2 percent of cars in the world are electric. Norway is the country with the largest share of electric cars. In this country 10% of cars are electric. Norway has the largest per capita production of electricity of all countries on mainland Europe and consequently very low electricity prices. With 5 million people, production amounts to 125 TWh, 40% of the production of the UK with 13 times the population (67 million). Norway also has very strong national finances, due to large oil income and all Norwegian oil companies are owned by the state, so they have the highest subsidies for electric cars of all countries, as electric cars are tax free. In Norway petrol and diesel cars are highly taxed, so that with the tax exemption the price of a Tesla in Norway is sometimes comparable to that of a VW Golf. Norway is thus an exceptional country for several reasons.

Sweden has 5% electric cars and the share of sales has increased to more than 50% of total car sales, driven by a generous subsidy of 7,000 euro per electric car. Electricity is relatively abundant in Sweden as well. With 10 million people we have a production of 140 TWh, slightly more than 40% of UK production with 15% of the population+. Electricity is still inexpensive, especially in the north, where most of the electricity is produced.

In some other European countries, the share of electric cars is around 2%. This is the situation in Germany, the UK, and France. There are significant subsidies, but electricity is significantly more expensive compared to Norway and Sweden. This means that it becomes more difficult to earn back the price premium, through lower prices for electricity, over the lifetime of the car in a country with high prices of electricity than in a country with low prices. In Germany, the share of electric cars out of total car sales amounted to 26% in 2021, which represents an important step forward, but the life-time cost of owning and driving an electric car in Germany is still higher compared to that of a diesel car than it is in Norway and Sweden. Even in Sweden with its generous subsidy, the cost of owning and driving an electric car is significantly higher than that of owning and driving a petrol or diesel car of similar size. The sales of electric cars are clearly increasing very rapidly in these countries, but the share of electric cars is still low overall and significant investment will be needed to expand power distribution to facilitate a large-scale conversion and to cover the increasing power need from a number of growing areas of demand production will have to increase significantly as well.

In the United States, one of the most important markets for Volvo Cars, where the company sells more than 100,000 units every year, the sales of electric cars has not made as much progress. Only 608,000 electric cars were sold in the United States in 2021, out of total sales of 17 million cars, less than 4% of total car sales.

In most countries and especially countries with weaker national finances the conversion to electric cars is at a very early stage. It is difficult in these countries for governments to subsidise the luxury purchases of the well-off when many live under more difficult circumstances. In Poland and other countries in the eastern parts of Europe the share of electric cars is still very low compared to the leading countries – sometimes as low as 0.1% of total car fleets.

 

Other Sources of Demand

In his book “How to Avoid a Climate Disaster,” published in 2021, Bill Gates estimates that the use of electricity will have to double or triple in countries to create a sustainable society. In Sweden several analyses of the need for electricity for purposes that are already planned for indicate that Swedish power production will have to more than double until 2045. From this perspective it is not as if the powering of cars is prioritised by utilities. These needs will have to be covered in competition with other power needs.

In the past two to three years an increasing number of electric trucks and light transport vehicles have been launched on the market. This development is still at a very early stage, and it is uncertain how rapidly the market will grow, considering that the price of a fully electric heavy-duty truck amounts to three times the price of a comparable diesel truck. In some countries, such as Sweden, the government expects rapid growth of these vehicles and start to invest significant amounts of money supporting the expansion of a charging infrastructure for trucks along Swedish roads. It remains to be seen in the next few years how rapidly the demand for electric trucks will grow.

One further source of demand will be the expanding demand from industrial companies as they move from natural gas to electricity to reduce emissions.

Hydrogen is an energy carrier that is expected to grow in importance over the next few years. What most experts and decision makers do not seem to have realised is that the production of hydrogen requires very large amounts of electricity. At present the move to hydrogen for a number of purposes is seen as a way of making use of power that is currently lost during periods of low demand at night and during the day, but the large-scale use of hydrogen for industrial purposes will require significant expansion of power production, on top of the expansion that will be necessary for the charging of electric vehicles and other purposes.

More than twice as much electricity is needed to produce the hydrogen needed to go 1 km, compared to charging a battery-electric car to go the same distance. If many industrial companies were to convert to hydrogen fuelled production, the need for electricity would expand to previously unexpected levels. The conversion of the steel plant operated by SSAB in Luleå in the North of Sweden is estimated to require more than 15 TWh of electricity, more than 10% of current Swedish power production. Some estimates indicate that the facility will require significantly more than this when it will be run fully on hydrogen. The Economics Professor Magnus Henrekson estimates that the two Swedish projects Hybrit (SSAB) and H2 Green Steel, a greenfield steel plant planned in the North of Sweden, will require between 67 and 73 TWh of power in 2045, according to an article published by the think tank Timbro. This amounts to half the Swedish power production in 2020.

Other demand for electricity is created by the growing sector of data centres that power Facebook, Twitter, Amazon, and store all the material that users upload to these platforms. At present data centres use about 1% of all electricity on the planet. Some estimates indicate that demand will grow rapidly over the next few years. In a future with autonomous vehicles the need for computing capacity for these will increase significantly, as each autonomous vehicle collects large amounts of data from cameras and sensors for its digital decisions.

 

Why All Electric?

To sum up: 2% of all cars in the world are electric and this is the share in Germany, the UK, France, and in the US the share is lower than this. Growth is at present rapid, but “patchy.” It mainly takes place in Northern Europe, Germany, the UK, France, and China. The United States is lagging behind in terms of demand. In most other countries demand is at a comparatively low level.

In this vast sea of uncertainty, with the market for electric vehicles and the growth of electric vehicle fleets in their infancy, Volvo Cars has decided to go 100% electric by 2030. Normally, large companies are risk averse and try to protect their existing market share and profitability before they expand. And when they launch expansion strategies, they tend to be very careful, making sure that they will get rapid pay-back, often in less than a year, on every investment they make. Here we have a global car manufacturer that announces a breath-takingly ambitious strategy to bet everything on the conversion to electromobility, a market in which it had been present for less than a year with a fully electric car when the decision was made.

The only explanation I can come up with is that Volvo is one of the smallest car manufacturers commanding only some 6-7% of the volume of the leading company Toyota and only a fraction of the volume of the majority of its competitors. It is possible that in this highly competitive environment, where competitors are able to spread development and production cost over a much larger number of sold units, Volvo Cars does not expect to be able to afford to maintain leading competence in petrol, diesel, and electric drive areas. They may for this reason have decided to speed up the conversion to electric cars in the hope that it will be able to grow its sales of electric cars enough to compensate for the possible loss of some of its present market share.

Still, the decision seems premature. There are too many uncertainties in the equation described above to make this seem like a safe bet for shareholders. A more conservative approach would include an element of “wait-and-see” and the making of decisions as the development unfolds.

 

Does Volvo Car Know About the Above?

The big picture of the transformation to electromobility has not been described or discussed by many. The present author is one of the few who have published books and articles that detail the transformation and outline the scale it will have to take over the next decades. In my dialogues with automotive companies, I get the impression that they have not calculated the total electricity need or started to see the access to charging capacity as a threat to future growth.

As mentioned above, Ford has decided to sell only electric drive cars in Europe from 2030, apparently sharing some of the optimism of Volvo Cars.

Over the past two decades I have informed about the necessity and scale of the transformation to electromobility. I started in 2004 to research these matters and my first book was published in 2009 with the title “Global Energy Transformation.” The latest one appeared in 2020 with the title “The Blind Guardians of Ignorance.” The interest in the large-scale aspect of the transformation has been weak. Up until 2019 the interest in the transformation was weak overall and in the past few years the interest has grown and turned into a belief that the conversion to electromobility will be very rapid and completely automatic and unproblematic.

The change is necessary, but governments and companies need to take the financial and physical aspects of large-scale transformation seriously. They need to base decisions on realistic descriptions of the process and realistic forecasts of the growth of the different resources and markets involved.

 

 

 

Awaiting Large-Scale Change

Take a look around and tell me if you see a world about to become sustainable. No, certainly not! So far countries and companies have run pilot projects to develop sustainable technologies and solutions that have been implemented on a small scale. Most things, however, remain the same. The world will not change to sustainability until people realise the magnitude of the change we are about to embark on.

One example is the change to electric vehicles. Governments have not realised the scale of this change, still the EU has set the goal to make the union fossil-free by 2045! There are 240 million cars in the EU and with an average driving distance of about 11,500 km per year there will be a need for electricity amounting to the production of more than 100 nuclear reactors or more than 150,000 wind turbines to charge them with electricity every day. In the winter even more capacity will be needed because more electricity is needed to drive a kilometre in cold weather.

The challenge of providing this much electricity for transportation will be great, because it will require large investment in power generation and distribution. The challenge will be great in Germany. With 48 million cars the country will need the electricity from 20 nuclear reactors to power all cars, but Germany has a strong economy. Not all countries have the economy of Germany. Italy and Spain have large fleets of cars and they need a corresponding amount of power to charge future fleets of electric cars. Italy has 40 million, requiring the power from 16 nuclear reactors and Spain has 25 million, requiring 10.

Now, governments in Sweden, Germany, and a few other countries are starting to talk about the transformation of trucks and buses to electric drive. The Swedish government is starting to subsidise the installation of charging posts for trucks along Swedish main roads, although there are only about 100 heavy trucks registered in the country, out of the total of 84,000 heavy trucks. The government is progressive and there are already plans for electric road networks where vehicles will be able to charge while driving via tracks in the surface. To turn all trucks and buses in the EU to electric drive the power produced by some 50 nuclear reactors, or 75,000 wind turbines will be needed, and more in the winter. Apparently, the idea is that all cars and trucks will be electric by 2045, requiring a total of more than 150 nuclear reactors or the power from 225,000 wind turbines, spread out across all countries of the EU, regardless of their financial opportunities to make the investment.

So far 2% of all cars in Germany and France are electric and not even the leading countries Norway and Sweden with 10 and 5% electric cars respectively, have investigated the level of investment needed in power production, reinforcement of grids, expansion of charging infrastructure to charge all vehicles every day, training of employees to drive the transformation to electromobility forward, or the investments in technology and business development that will be needed.

 

Electromobility is Only One Example

Many believe that the transformation to a sustainable society is well under way and that we only have to wait for another few years until all plastics are made from biological feed stock. The truth is that the change to recycled or biological plastics is at an earlier stage than the transformation to electromobility.

About 8 to 10 percent of all oil produced is used for plastics production. In addition to this a share of the natural gas that is produced is used for plastics production as well. Natural gas contains the same hydrocarbons as oil, so gas can be used to produce plastics.

If countries were to change their plastics production to 100% grain-based plastics 25% of agricultural land on the planet would be needed. To change transportation to biofuls 4 times all agricultural land on the planet would be needed and there would be no grain left to eat. We know that the change has not come very far, because we are able to eat bread and pizza every day, or as often as we like.

Governments and the experts that give advice to politicians and business leaders around the world have not realised the scale of the change. They still think that banning plastic straws and taxing plastic bags are important steps in the right direction. They are steps in the right direction, but they are small steps. There is a need for strategies that take the scale of the transformations into account and address the scale and the need for investment!

Electromobility and plastics are only two of the most prominent examples of the scale of the transformation to sustainability. Other examples are the need to reduce the footprint from various aspects of our consumption, for example applying the principles of the circular economy to achieve this.

I have written 5 internationally published books that discuss the need for high-level analysis, strategies, and plans for the transformation, the latest being “The Blind Guardians of Ignorance” from 2020.

Plans need to comprise all necessary activities, not only the ones that seem most obvious, like subsidising electric cars and building some chargers. Strategies and plans need to take into account the need for electricity and the competence that will be needed by the people who are going to work with the transformation. Change projects for electromobility will have to become widespread. To charge all cars, buses, and trucks wherever they are, whenever they need, millions of chargers will be needed. Similar systematic approaches will be needed in other sustainability areas.

 

Strategies Will Be Needed – But Also People With An Understanding

To change to sustainability strategies and plans will be needed. But it does not help much that I write articles on Medium if there are few others that understand the need and are able to bring this message forward.

It was easy for NASA and President Kennedy to understand that going to the moon in 1969 had to involve investments not only in rockets. To go to the moon there was a need for a launch pad, a huge building where rockets and other things could be built, a vehicle that could take the rocket to the launch pad, a control centre in Houston, TX, and many other things without which the mission would not have succeeded. To build railways there was also a need for station houses, level crossings, coal depots, bridges, not only locomotives and railway cars. People understood this in the 19th Century and in the 1960’s, why don’t they now?

 

Why This Blindness to the System Aspects of the Transformation?

Big numbers are difficult. Who knew about Terrabytes and Petabytes before we had to get computer memories bigger than kilo, Mega, or Giga? Few people understand Megawatts, Gigawatts, or Terrawatts.

One nuclear reactor produces about 4.5 Terrawatts per year, enough power to fuel about 2.2 million electric cars that go 11,500 kilometres each. In Germany they produce 600 TWh of electricity per year and about 135 TWh, or 30 nuclear reactors, will be needed to fuel cars, buses, and trucks on a daily basis. But more than 30 will be needed in the winter, which complicates the discussion further.

As long as there are few electric vehicles and most of them are charged at night, we have no problem. When countries start to have 25% electric cars and 5% electric trucks and buses people will find it difficult to get them all charged every day, unless power production and grids are significantly expanded. Expansion will not have to take place in all parts of grids, so the need in different parts of cities and towns will have to be mapped.

More people will have to become comfortable with the big numbers of power use and power production. It is not more complicated than understanding Megabytes and the other concepts of computer storage.

If more people realise that our future depends on the transformation to electromobility and that the people who start to learn now can take the lead in the transformation, that would be a huge step forward. In Sweden forecasts have been made telling us that only electric cars may be sold by 2028, if the present increase in demand continues. If this becomes true it is more than likely that a lot of owners of electric cars will not be able to charge them regularly, because of a lack of capacity in power grids. Most probably we will also need to expand power production, even if we have about twice the amount of power per person that Germany has. Norway, the leader in electromobility, has more than three times the power production per person compared to Germany. No wonder that Norway, Iceland, and Sweden lead this race towards electromobility. Power is abundant and cheap here, compared to the situation in other countries!

People in all countries – start to learn about the complexity of electromobility! It is a necessary transformation, but not as straight-forward as decision makers seem to believe at present.

 

Business Opportunities of the Past

Most people believe that the number of business opportunities are infinite and that as many remain, regardless of how many companies that are started. This may be true, but it is becoming increasingly difficult and demanding to find new business opportunities, because the most obvious ones and many of the ones with the biggest potential have already been exploited.

At the beginning of industrialisation people could look around them and find opportunities to build high-growth businesses. Few such opportunities remain unexploited:

– Someone saw people doing their laundry in cold running water, washing dishes in sinks, and throwing away rancid food and some would have thought “I can invent a machine that solves this for them!” — And they invented the washing machine, the dishwasher, the fridge, and the freezer. All these appliances, and many more, have been bought by millions of households since then.

– Another person saw people writing using pencils and pens, thinking that they could invent a machine that did this for them, and suddenly there was the typewriter that could be used for writing books, journal articles, and business documents.

– A carpenter thought that he could simplify the production of furniture and founded a company that made furniture. He sold his products in wider and wider circles, getting people to demand the less expensive industrially produced sofas instead of the hand-crafted bespoke models offered by craftsmen.

The same thing happened with food, transportation, tools, and everything else we use on a daily basis. Someone saw the need, industrialised production, and mass distribution and marketing was invented to sell the stuff.

From Less Efficient to Super-Efficient

Everything that can be done can also be done better, but nothing can be done in less than no time or at a cost lower than zero. The closer companies get to zero, the less a further improvement will be worth and the more it will cost to achieve it. Progress has been going on towards zero in the past century:

– Zero time — via Google users get all relevant results for a search in almost no time and at a cost close to zero. Google made a huge improvement over Alta Vista, but it will be tough to innovate a search engine that beats Google.

– Efficient documentation, storage, and administration — Instead of using typewriters and filing documents and sending them in envelopes scientists invented computers. This reduced the time taken to write, store, and send documents to a minimum. Computers also calculate, store photographs, offer gaming opportunities and other types of entertainment. Little paid time is now wasted for these and other purposes that can be handled digitally.

– Zero waste of time and resources — IKEA has shaved off all unnecessary activities and cost from their service of providing furniture in flat packages and built volume that will be hard to beat. The same goes for Wal-Mart and other leading distributors.

– Car manufacturing — automotive companies have spent a lot of time and resources since the early 90’s to apply Lean Management and eliminate all waste so that most of what now remains are value-adding activities.

In many areas humanity has come close to the absolute limit in terms of efficiency and reduction of waste. Development now needs to go in the other direction.

What Now?

In many areas the tide seems to turn. The idea is to increase the share of local production and reduce imports from Asia, replace petrol and diesel vehicles by the more expensive electric or hydrogen fuel cell alternatives, and to increase the use of biological materials and let those replace some of the plastics that are used.

Still, however, products need to be inexpensive to compete and on-line sales and automated services need to be developed that take away the remaining inefficiencies from ordering and administrative processes.

6 Truths About the Future of Innovation

Instead of the opportunity to sell inexpensive products made in huge volumes to a global market, the opportunities of the future seem to involve some of the opposite:

1. The creation of local production and distribution systems that are still efficient enough to become competitive. Opportunities will exist to franchise successful concepts to collaboration partners in other regions and thereby grow.

2. Instead of using the cheapest possible plastics materials to make inexpensive products for global markets the future seems to hold promises for companies that develop products in biological materials that will last and deliver value over the long term.

3. Instead of catering to the basic needs that are easily identifiable the companies of the future will have to look deep into technology and business trends. Opportunities can be identified in areas like blockchain business and in other advanced technological areas, with biological and advanced materials, by selling locally produced goods and increasing the value from each product by sharing or reselling products.

4. Instead of using only the best bits of material and products companies will strive to reduce waste and make use of as much as possible of raw materials and products.

5. The average size of business opportunities is likely to go down, but the number of opportunities may increase. This is because local production and distribution systems will be developed in all local areas. There will have to be a number of local players, instead of a few companies that dominate all business in their industries world-wide.

6. The size of markets will increase over time as the new business models grow and become increasingly competitive.

The Conclusion?

In order to take advantage of the business opportunities of the future entrepreneurs need to reverse their thinking and find ways to build businesses in seemingly smaller markets. Large companies can benefit from this as well, by applying their competence and resources in many local markets at the same time. Many business concepts will be different in the future compared to today.

Entrepreneurs need to build new business models on advanced new technologies to remove any inefficiencies that still remain and increase, for example, the security of transactions through blockchain applications and other innovative technologies.

As always, many business areas that are at present insignificant are likely to grow and become the playing fields of the giants of the future, whether or not they will be as large as the giants of the past, only time will tell.

Few seem to have realised this, but the change to electromobility is the biggest transformation in modern history. The idea is to entirely change four large and globally important industries in all countries that commit to the effort: The automotive, transport, fuels industries will be changed from the ground up and the utilities industry will have to change dramatically to digitised power grids, develop new services, and expand power production and in many places grid capacity. Thousands of people need to get involved and new companies need to be started on a large scale.

Countries and the EU have decided to do this over the next two decades, but no plans have been made and budgets have not been set. So, there is a field of opportunity out there, going from the present focus on vehicles, batteries, and charging posts, to a holistic perspective on the transformation and the entire change process. The territory of electromobility is like a vast piece of land out there, waiting for settlers to colonize. In a way it is like finding a new Australia out there, an entire continent waiting to be explored, with enormous assets in terms of easily identifiable business opportunities of a varying nature.

The difference between the transformation to electromobility and the discovery of new far-off lands is that there are already settlers in the form of large and small companies, many with household names, that occupy the territory. Many of those will have to change entirely and the scale of the change has not been recognised. So far, there are 10% electric and hybrid cars in Norway, the country that leads the transformation and most countries in Europe have less than 2% chargeable cars. The number of electric trucks is still minuscule. To fuel all European cars with electricity there is a need for the power from some 120 nuclear reactors and to fuel trucks and buses another 60 are needed. To power cars, buses, and trucks generation capacity has to expand dramatically and huge business opportunities will emerge in the process.

 

Who Am I to Say This?

My name is Mats Larsson. I have worked for more than 30 years as a business consultant with strategy development and change management. Through those years I have worked with projects in a wide range of industries and sectors of society. From food to IT, life science, construction, and high-tech. For the last 17 years I have increasingly focused on sustainability and clean technologies, in particular on electromobility, the circular economy, and energy efficiency. In the course of this work, I have written 5 internationally published books on electromobility and the circular economy:

  • Global Energy Transformation 2009
  • The Business of Global Energy Transformation 2012
  • Circular Business Models 2018
  • Redrawing the Map of the Future 2019
  • The Blind Guardians of Ignorance 2020

The knowledge and experience that I have built over the past three decades as a consultant includes:

  • An extensive understanding of business development, business strategy, and innovation.
  • A deep experience of organizational issues, both in the public sector and in companies.
  • Substantial knowledge about change management and an understanding of how change is driven by large organizations and how it needs to be driven, organized, and financed when change is going to happen in society overall.
  • Experience from working in a number of different industries, several mentioned above.
  • Experience from developing organizations that focus on supporting the development of certain competencies in a region or a country, for example from my 5 years of working to develop the organization Big Science Sweden, helping Swedish companies to build supplier competence to supply to big science facilities.

 

My Conclusion Regarding Electromobility

When countries plan change there is usually enough competence among key decision makers to see which steps need to be taken and which groups of experts that need to be involved. In the case of the Apollo Program it was obvious from the beginning that in addition to a rocket there was a need for a moon lander, a launch ramp, a control centre, a building for the construction of the rocket, moon-lander and other equipment, a vehicle that could take the rocket from the building to the launch ramp, and many other details that were necessary.

Once the engineers started to engage with the challenges, they realised that there was a need for light materials and construction principles, heat resistant materials, communication solutions between astronauts and the Houston control centre, and a large number of other technologies and solutions that had to be developed to make the mission possible. There was also a need for a number of flights prior to the mission that would put two men on the moon.

All of these development activities had to be tightly scheduled before the end of 1969 and they had to be sufficiently financed to achieve the goal. Realistic scheduling and budgeting could not give way to unwarranted optimism, sloppy calculations and less than careful planning.

Similar approaches have been taken to other technical challenges throughout the past centuries. The building of railways has required locomotives, cars, tracks, switches, coal depots, station houses, and many other details. The electrification of society has involved the construction of power plants, national, regional, and local grids, switchgear, transformers, meters, equipment standards and many other innovations and technologies.

In the case of the transformation to electromobility society is identifying one need at a time. Governments, companies, and experts make no effort to investigate all the aspects that need to be dealt with to transform. They have so far identified the need for vehicles, batteries, chargers, and subsidies for cars and chargers. Few have realised that there will be a need for power production, reinforcement of grids, digitisation of grids, business development on a large scale, training of professionals for the roles that need to be filled, financing on a very large scale, and a number of other aspects and innovations that need to be taken care of.

 

Why?

This is probably because e-mobility has been promoted as a necessary activity to make countries sustainable and green politicians and experts have argued that this could be achieved at almost no cost to society. In 2013 the report from a public investigation financed by the Swedish Government called “Fossil Freedom on the Road” concluded that the entire conversion of Swedish car fleets could be financed through an increase in the tax on petrol and diesel cars and a subsidy on fossil-free cars. The report was written by Professor Thomas B Johansson, who focused primarily on the price of fuels and the need to cover the differences in these prices through the tax swap.

The report by Professor Johansson did not mention all the investments that would have to be made in fuel production, distribution systems for fuels, the development of vehicle technologies, and other aspects of the transformation. The report focused on a change to biological fuels, but the same mind-set of a tax swap that will finance the transformation has been carried over to the present view of the change to electromobility. The present Swedish government, consisting of the Social Democratic party, instead of the conservative Alliance that financed the analysis by Professor Johansson has implemented the measure suggested, namely a “Bonus Malus System” for the tax swap. We have a 7,000 euro bonus on electric cars and the government has increased taxes on petrol and diesel cars, just like the professor suggested.

 

Nowhere Near Enough

The somewhat naïve approach to electromobility that is taken by the Swedish government is by no means unique. As mentioned above the EU has decided to make the union fossil free by 2045, without considering the level of investment needed or the multitude of activities that need to be started immediately, as vehicles are used for 16-17 years, and many expansion projects take more than a decade to complete. A further example of naivism is that in December of 2020 the UK government decided about a 10-Point Plan for sustainability with a backing of 12 billion pounds that showed no signs of any system understanding among the persons who had developed it. A ban on the sales of petrol and diesel cars from 2030 was decided, but no provisions were made to secure power production to supply the entire car fleet with electricity throughout the change.

At Medium there is no topic of electromobility to choose from in business, as this development that will change 4 entire industries over the next three decades is not considered important enough by people to justify an entry of its own. Four of the largest industries will be dramatically changed and expanded over the next decades and nobody is talking about the transformation, except noticing that some new vehicles are launched on the market!

The conclusion from this must be that there will be ample business opportunities for the individuals and companies that decide to take a holistic view of the transformation. This type of large-scale change cannot be brought about without the involvement of a large number of people and not only by the individuals who are employed in the above-mentioned industries at present.

How to Create a Career In Electromobility

In my previous post I described why a large number of change leaders will be needed in the transformation to electromobility. Countries do not have enough power available to fuel all vehicles with electricity. It is as simple as that. Cars, batteries, and charging posts are not enough. A wider perspective needs to be taken on the change.

Many areas need to change, and it is not likely that all the organizations and people that need to participate will do everything necessary without a lot of people coordinating the process. There will also be a need for financing on a large scale and the technologies, products, and services that are on the market right now are not mature and competitive enough to grow rapidly without support.

In this post I will go into some of the areas where change management will be needed and explain how you can prepare to take a role in the development. Whether you are a student preparing to enter your vocational life or if you are already working you can build a career driving this change.

 

What Is Change Management?

Large companies like General Electric, IBM, and Ericsson have found that change does not happen because top management have told the organization to change or set a goal for a new development. In order to change, companies need to create an organization that drives change – a “change programme.” This is because most people prefer to continue with the present way of working and change as little as possible. Even if most people express support for a change, for example to launch offerings that open up a new market, there are always strong forces that counteract change. The most powerful is often the inadvertent tendency of people to work with things they know and are comfortable with and a reluctance to engage with new tasks. People need support to think and act in new ways and make decisions that put the status quo out of balance.

If change is difficult in departments of large companies, consider how much leadership will be needed to drive change in entire countries. There will be a need for change programmes, the “Apollo” type of effort that put two persons on the moon in 1969. But the Apolllo programme was different from changing transport systems to eletromobility. The goal was to put a man on the moon before the end of the decade. Now, the goal is to change hundreds of millions of vehicles to electric drive and make it possible to charge them all whenever they need to be charged, wherever they are at the moment.

You will be needed! If you understand people, want to learn new exciting skills, and help move society into new and uncharted territories, you may be just the right person to become a change leader.

 

Structuring Change Programmes

Change projects, like the Apollo programme, are run in a structured way, maximising the chances of success. In his book “Change Management Handbook” Peter F Gallagher presents the three focuses of the leadership of change with its subtopics:

  1. Programme Change Delivery:
  • A Change Management Framework – a structured approach to achieve business change.
  • Change Processes, Tools and Techniques- important concepts used to drive change.
  1. Employee Change Support:
  • Change Adoption Support – employees need to be supported through the change process through the use of a “change adoption model.”
  • Behavioural Change Support – employees need to develop new behaviours and should be given support through a model for this.
  1. Organizational Change Alignment
  • Leadership – leaders need to lead the change and get support in doing this.
  • Organizational Structure Alignment – the organizational structure needs to support the change and structural changes need to be made to achieve this.

The methods of change management are applied in organizations that need to change. Even with structured change management the risk of failure is high. Without change management it is highly probable that change will fail.

In the transformation to e-mobility, change management will have to be applied on many levels and in many places:

  • Nationally by governments and government agencies.
  • By industry organizations, political parties, and other organizations that influence high-level decision-making.
  • Companies will have to align their strategies to change programmes in different countries and drive change in their organizations in line with national and regional programmes.
  • Regionally by regional governments, utilities responsible for regional power grids, and regional industry organizations and other influencers.
  • Locally by municipalities that need to make detailed plans of charging infrastructure, utilities that need to expand power grids in places with increasing demand, operators of charging infrastructure, parking companies, real estate companies, shops with parking spaces, and so on.

All of the above types of organizations will in different ways need employees who understand the change and that are able to take different roles in the process. If you start to learn about the change process now, you can apply for jobs or take on roles as opportunities emerge.

 

Why Will Change Management Be Necessary in the Transformation to Electromobility?

The change to e-mobility will be very complex and will over time in each country involve hundreds or thousands of companies and organizations with different goals and ways of working. The change process will affect all countries and all parts of society in one way or another.

Technologies and products for e-mobility are at an early stage in their development and they are more expensive compared to existing alternatives. People are not aware of how they are going to approach the change or what roles they can take.

The probability that the change will succeed is low without structured change programmes aimed at different parts of the value chains of the industries that will be involved.

You can drive the process forward by informing friends, family, and colleagues about the need to take part in the process. You can start to apply for jobs related to e-mobility, knowing that this will be a growing sector in the years to come and that the change will be absolutely crucial to the future of our society.

 

Why is This an Opportunity for You?

Your efforts and the efforts of hundreds or thousands of other change leaders organized in structured change programmes will be crucial for success.

Governments, local municipalities, utilities, and large companies will realise that there is more to e-mobility than cars, batteries, and charging infrastructure. There is no point subsidising the sales of cars and the building of chargers if there is not enough power available to charge more than 20 or 30 percent of cars and a small number of trucks and buses.

High-level decision makers will soon realise that change needs to be planned and coordinated using change management principles. Then they will start looking for change management professionals with knowledge about the different aspects of e-mobility and how the new systems need to be structured and built. Make sure that you are one of those experts. The change process will continue over decades and there will be plenty of work to do for those that will take the leading roles!

 

Who Will Need to Take Part?

People in many industries, sectors and walks of life will have to contribute and there will be a need for hundreds of change leaders in each country to lead the development in different areas. There will be plenty of room for you and you will not regret that you started to learn.

As citizens we will be involved in many ways and most people in their working lives and at home will need to learn about the change. The change to electromobility will change three entire industries and create needs to expand several more. The automotive, transport, and fuel industries will have to change completely. The entire point of the transformation is that they completely cease to produce and sell the products they produce and sell at present and either go out of business or convert to new products and services connected to electromobility.

Utilities will have to expand significantly through e-mobility and other developments that are run in parallel. Countries will need increasing amounts of power to fuel electric vehicle fleets, but many also plan to convert industrial processes to electricity to reduce emissions, use electricity to produce hydrogen as a fuel for industrial processes, start up large-scale battery production, and expand data centres for Facebook, Amazon, Microsoft and other Internet services. For example, to realise the electrification strategy of the Swedish government power production needs to more than double and the situation is similar in many other countries. Electricity is on the rise. Fossil fuels, combustion engines, filling stations for petrol and diesel, and many other things are on their way out. The change will be massive and we have barely seen the beginning!

Change leaders need to understand that electromobility is special among the developments that will drive the expanding demand for electricity. A battery plant may need large amounts of power, but they will need it in one location, requiring a large supply of electricity to their production plant. To convert vehicle fleets to electricity all vehicles need to be charged, regardless of location. Enough electricity will have to be available in all parts of countries.

Join the transformation! Change to electric drive and put your brain in gear! But do it with your eyes open and blinkers removed!

 

Despite strong statements about the need to change to sustainability, very little is happening. Many believe that the change to electric vehicles is going rapidly, but in most countries less than 2 percent of all cars are electric. Heavy electric trucks were launched only in the past few years and there are only a few hundred on the road globally. The EU and many governments have set ambitious goals for the transformation, but few have realised that another type of approach will be needed.

The EU has decided that all countries in the union will become fossil-free by 2045. The UK government has decided to ban the sales of petrol and diesel cars by 2030, and the Swedish government has decided that Sweden will be fossil-free by 2030. None of them have realised what needs to be done to achieve this.

You can build your career on learning about the change and by starting to apply your knowledge at work or in discussions with friends! Everyone who wants to speed up the change to a sustainable society can help to lead the development in the new direction. Soon everyone will learn about the necessary steps and companies will start to take measures to prepare for them. This has already started in Sweden. Sweden is third in the transformation to electromobility after Norway and Iceland.

5% of cars in Sweden are electric or hybrid. This is still not a lot. In Norway 10% of all cars are electric, and Norway is by far the world leader.

 

Leaders in Sweden Start to Realise…

What is now about to happen in Sweden? An increasing number of people start to realise that electromobility is not only about cars, batteries, and charging posts. To fuel all cars, buses, and trucks in the near future with electricity most countries need more power than is produced at present. How about that? Large numbers of electric vehicles need large amounts of power! That’s something governments will learn as they push electromobility forward by subsidising cars and building charging infrastructure. And what a surprise that will be! Countries simply don’t have access to all the power needed to fuel huge fleets of electric vehicles. It’s as easy as that.

How can you build a career on this insight?

You can start to learn the things that other people around you will realise in the years to come, and you can work with the exciting expansion of electromobility in the early stages, understanding the systems aspects of the transformation. Employers are going to look for people with a system understanding of the change when they hire people in 2023, 2024, and onwards… Some already do.

So, what does this magic knowledge consist of? This insight is the same as the insight people made when they built systems in the past. If you want to build railways you also need trains, signal systems, station houses, ticket sellers, and timetables. If you want to build phone systems you also need switching systems, substations, phone sellers, and once you have smart phones you need apps, app developers, companies that do business on mobile networks etc. The strange thing is that so few have realised that the change to electromobility will require the development of entire systems.

 

What Will Be Needed?

This is simple, so hang on! You only need to grasp a few basics to get started.

To run entire vehicle fleets on electricity, countries need:

  • Large numbers of cars and trucks at prices that are competitive against petrol and diesel vehicles.

 

  • Enough chargers to charge all cars and trucks wherever they are and whenever they need to be charged. This is how it is with petrol and diesel. There is always a filling station nearby. Only, with electric cars it can take anything from 10 minutes up to several hours to charge, so there will have to be many more chargers. Most vehicles will charge slowly over-night, but many will have to be charged during the day as well, or perhaps instead, depending on where they are and what they are used for.

 

  • Enough power will eventually be needed so that all vehicles can be charged whenever will be needed. But power production will need to grow rapidly over the next few years and decades:

 

  • Don’t worry about Norway and Iceland, they probably have more power than any other country on the planet. Norway produces 125 TWh with only 5 million people. The UK with 67 million people has a production of 2.5 times that amount, 325 TWh per year. Norwegians don’t have to plan the transformation to the extent that people will have to do in the UK.

 

  • To fuel all 34 million cars in the UK with electricity the country will need the power equivalent to 15 nuclear reactors. 50 % more, or 8 reactors will be needed to charge trucks, making it a total of 23. And this is in the summer. In the winter even more is needed. Maybe as much as another 10-12 reactors will be needed to power vehicles in the coldest winter weeks. The need amounts to some 100 TWh, 30% of current power production.

 

  • Germany with 48 million cars will need even more. Some 135 TWh and the generation resources would be in the area of 31 nuclear reactors, but more in the winter. The current production in Germany amounts to 600 TWh, so this country only needs to produce a little more than 20% more than it does at present.

 

  • I use “nuclear reactor” as a unit that is fairly easy to relate to. A nuclear reactor can cover the need of about 2.2 million cars in the summer. The same amount of power is generated by about 1,500 wind turbines. In Germany they have 30,000 wind turbines that generate 100 TWh of power.

 

  • Power production is not the only thing that politicians need to worry about. European power grids are super stable, but they are not built for the charging of all vehicles on a daily basis. To charge all cars the local power grids in cities will need to expand. Consider all parking garages where hundreds of cars may have to be charged at the same time, maybe over-night! There will have to be one charger for every car. Consider the streets where cars are parked along the kerb, day and night. Where will all these cars charge? Maybe at fast-chargers or countries may need to build electric roads where vehicles can charge on-the-go.

 

  • To charge all trucks there will be a need for very large amounts of power at transport companies and logistics centres. Countries only use half as much electricity for trucks as they do for cars, but each truck uses much more than one car, and every truck will need to be charged every night and in many cases, they will need to be charged during the day as well.

 

  • A logistics company with 35 heavy trucks going long distances that is located in Lytham St Annes outside of Blackpool is probably going to need much more power than is currently available in Lythan St Annes at present. To run the entire truck fleet on electricity expansions of both regional and local grids are likely to be needed.

 

  • This is only one example where a lot of power will have to be provided at previously unexpected places. According to Volvo there are stretches of motorway in Germany where 30,000 trucks pass every day. In a fossil-free future many of them will have to be charged along the road. Maybe countries will build electric road systems, but until these have been developed a lot of chargers will be needed.

 

  • Maybe you did not expect to have to learn about these things and I am sure that few have thought that they will have to get involved. But to succeed with this transformation a lot of people will have to take part in a wide range of activities. Chargers will have to be built all over cities, towns, and villages and a lot of people who have never even considered how much electricity will be needed will have to be involved in decisions and planning.

 

An extraordinary number of people at all levels will have to learn about these things and become able to join meetings and make decisions. You can be among the first to pick up this knowledge in your local area and become a leader of the transformation, knowing what to do and telling others about it!

 

One of the things that will be needed is training courses that teach people in different roles in companies and public organizations some of the basics about these things. You can start a company offering courses or a teacher training others.

  • One more thing that will be needed is businesses offering products and services. People will need to charge and there will be several different types of charging systems with different business logics. Many will want to charge at home, some at the office, and some as they stop for a snack along the motorway. Different business concepts will be needed.
    • Information about chargers, opportunities to plan routes and book chargers will be needed.
    • People will have to pay for charging and there are numerous ways of doing this – via credit card, tags, using mobile apps, or directly as chargers recognize the car and charge the customer’s account automatically.
    • You can work at one of the companies that are emerging, or perhaps start one of them yourself.

 

You Will Be Needed!

A lot of people will need to work with the transformation to e-mobility in the future and it will pay to learn. Why not start now? Follow my postings on Medium and on www.getinstitute.com and learn the skills you need to take part in the electromobility revolution.

Many will be surprised by the twists and turns that the development is likely to take, but if you follow my posts you will not be one of them! Start to learn now and prepare to take part! Your country needs you!