Weighing the cost of the EV revolution

According to some estimates, over a million all-electric or hybrid vehicles are expected to be sold across Europe next year. Put another way, that is four times the level of sales last year – an increase that’s hardly inconsequential.

Some manufacturers are even more ambitious. At last September’s Frankfurt Motor Show, Ford of Europe’s president Stuart Rowley predicted that the majority of the company’s passenger vehicle sales would be electrified by the end of 2022: every model that the company produces would include an electrified option, either hybrid or all-electric. Ford’s all-new Kuga led the way, with a hybrid powertrain.

Predictably, environmental campaigners are jubilant. Consumer champions also welcome electric vehicles’ simpler powertrains and, especially in the case of all-electric models, the potential for lower maintenance costs.

But spare a thought for Europe’s finished vehicle supply chains, which must cope with what may be a dramatic shift in the model mix that is moving through them. As the proportion of electric vehicles (EVs) increases, so do the challenges faced by logistics service providers. Simply put, supply chains honed to peak efficiency on the assumption that they will be handling conventional internal combustion engine (ICE) vehicles will instead have to adjust to vehicles with very different characteristics.

Risky business

Granted, some changes are relatively minor. Repair, customisation, and accessorisation operations carried out within logistics service providers’ compounds, for instance, will need to be cognizant of the differences in the underlying technology of EVs. Those vehicles, both hybrid and all-electric models, utilise significantly higher voltages than ICE-powered vehicles, with voltages reaching 650 volts, clearly giving rise to a risk of fatal exposure. Batteries may give off fumes, and the energy stored within them can give rise to explosions. Additionally, regulators warn that vehicles may move unexpectedly because of magnetic forces within their motors.

That said, regulators seemingly regard most logistics activities as relatively low risk, although any personnel carrying out valeting activities, especially within the engine bay, or under the vehicle, will need to take care to avoid damaging high-voltage cables. Maintenance activities are more problematic, though, with regulators such as the UK’s Health and Safety Executive warning that “people involved in vehicle repair and maintenance are likely to need a much greater level of competence in order to safely work on these types of vehicle”.

Manufacturers’ strictures regarding vehicle movements may be more problematic. According to one logistics provider with knowledge of the company, Tesla prefers that operatives do not move its vehicles once they are in compound storage, so as to conserve battery power, and that Tesla uses vehicles’ on-board telematics for notification of any such movement. When asked to verify this information, Telsa declined to comment on or to confirm whether these are its processes. And yet, for operational reasons, compound operators can at times find the freedom to move vehicles useful. At low levels of EVs within the overall mix, it’s a problem with which compound operators can probably live, but when volumes increase difficulties might arise.

Varying standards

As with the safety issues attached to EVs, and maintenance and accessorisation, uncertainty around the impact of EVs means that the automotive logistics industry is having to feel its way, says Emmanuel Arnaud, executive vice-president for marketing at Gefco. The logistics and transport provider handles a number of EV contracts for manufacturers, including the Jaguar I-Pace models, which are manufactured under contract by Magna Steyr in Austria.

Although the transport of EVs is easier than the movement of their lithium-ion batteries – where shipping companies and airlines either impose tight loading controls or refuse point blank to carry the batteries, notes Arnaud – moving EVs through finished vehicle supply chains is more complicated than moving conventionally-powered vehicles: Russian and Chinese railways won’t allow the vehicles to be carried, says Arnaud.

“There aren’t yet enough standards in place,” he says. “The market is evolving, and the standards and regulations are evolving at the same time.”

Charging infrastructure

One challenge, he adds, is already manifest: namely, how to deal with the difference between vehicles’ average vehicle battery charge at the assembly plant gate, and the remaining charge that the dealer expects when selling the vehicle.

“The average battery charge at the factory gate is 30-50%, but the average required charge at the point of handover to the customer is 80%, which raises an obvious question: who does that additional charging, and where? At the moment it is not a problem, as EV volumes are relatively limited, but look at the forecasts for EV market penetration, and that obviously isn’t going to be the case going forward. If a logistics service provider has to be capable of charging 30-40 vehicles at a time, then the charging infrastructure has to be in place.”

Polish logistics service provider Adampol, for one, is already weighing the cost of this, as well as thinking through the operational complexities of large-scale EV charging, says Krzysztof Szeligowski, the company’s deputy sales director.

“The main issue is or will be the investment in the necessary infrastructure: charging devices are still expensive to both buy and install,” he says. ”Proper care for the batteries in winter is another issue. And staff will need extra training, as every manufacturer has their own technical requirements regarding handling and storage, and of course those requirements have to be fulfilled.”

Germany’s BLG Logistics is also investing in battery-charging infrastructure, including at its Kelheim domestic terminal, adds spokesperson Vivien Kretschmann. That said, she adds, during normal operations the demand for the service has so far been limited, with vehicles’ charge levels sufficient to make it typically unnecessary to recharge them. Even so, she notes, BLG is in ongoing discussion with customers regarding future demand for charging services during storage.

And not every charging scenario involves compounds, cautions Allen Stuart, commercial and finance director at ECM, a UK-based logistics service provider operating a 500-strong fleet of transporters specialising in ‘final mile’ delivery to dealers. As with other logistics service providers, he adds, ECM has been using the steadily-growing volumes of EVs over the last few years to gain valuable experience of their requirements.

“With certain electric vehicles, the vehicle cannot be moved until the battery is re‑charged, and the re‑charging process can be time consuming, usually requiring a power supply which may not always be available at every stage of the finished vehicle supply chain, for example, at the roadside when on a transporter. 

Heavy and high

Yet all these concerns may pale into insignificance compared to another, somewhat more fundamental, challenge associated with EVs: namely, their weight. EVs’ batteries add significantly to the overall weight of a vehicle. As ECM’s Stuart points out, a recently launched luxury electric SUV weighs 2,500kg, while a similar luxury diesel SUV from the same manufacturer weighs 2,200kg, a difference of 300kg. The impact on car transporter fuel consumption, not to mention transporter wear-and-tear, is obvious. But that isn’t all because the extra weight of EVs poses a further, more worrying problem.

With enough EVs in the loading mix, the overall weight of a given transporter load can exceed the 40 tonne limit set by European Union law, a law that, unlike some other vehicle-related legal stipulations, is not subject to national exemptions and variations. Right across the EU, in short, loaded car transporters are subject to a 40 tonne limit, a maximum weight that includes the weight of the transporter itself.

“Traditionally, logistics service providers have tended to bulk out before transporter loads have hit weight limits,” says Mike Sturgeon, executive director of the Association of European Vehicle Logistics (ECG). “So until very recently, carriers have been able to fully load a transporter, and come nowhere near the weight limit. But now, with all-electric vehicle batteries. as well as bigger, longer and wider hybrids, also with batteries, they’re starting to hit the limit. More and more, I’m hearing of carriers having to leave one vehicle off the load in order to stay under the weight limit.”

Sometimes it is more than one vehicle, especially if the vehicle mix contains a high proportion of EVs, says Adampol’s Szeligowski.

“Due to weight, we can lose 2-3 cars on a full transporter load of EVs, which obviously results in a higher unit cost of transportation. Manufacturers of transporter superstructures are trying to help logistics service providers compensate for this by building lighter, stronger transporters, for logistics companies to compensate their loses, but the growing dimensions of conventionally-powered vehicles are forcing them to put more and more load support into the superstructures, once again adding weight to the car transporter,” he observes.

The problem is at its most extreme in situations where carriers’ ability to sidestep the weight limit by adjustments to the load mix are curtailed, such as transporting loads from assembly plants, rather than final-mile deliveries of a potentially diverse mix of vehicles.

“If a carrier is doing plant clearances, as opposed to transporting multi-model, multi-brand loads, then there’s not a lot of scope for load mixing,” notes ECG’s Sturgeon. “There’s very real chance that carriers will be transporting fresh air, in order to stay under the limit.”

Nor is the problem solely related to road-based car transporters, adds Bjorn Svenningsen, director of sales and marketing at short-sea ro-ro specialist UECC: car transporter vessels are also potentially affected.

“When there are a lot of EVs on a ship, it is possible to ‘max out’ the loading weight of the vessel before maxing-out the available loading space,” he warns. “With EVs’ share of the market today, it’s not a major issue right now, but it’s certainly something that we’re aware of. From a planning perspective, the ramifications are complex, because both vessel loads and applicable weight limits vary by season, by route, and by destination market: EVs are more popular in northern Europe than southern Europe, with EV sales in Norway actually outselling sales of conventionally-powered vehicles during a couple of months this year.”

Different heights

National differences also impact the extent to which Europe’s logistics service providers may be commercially affected by the weight issue, notes the ECG’s Sturgeon. While the 40-tonne weight limit applies across Europe, individual national rulings on permissible transporter size, principally height, also govern how many vehicles may be carried on a transporter. In general, a 4-metre height limit applies across Europe, says Sturgeon, but several countries permit higher load, in Spain and Portugal, for instance, the limit is 4.5 metres. However, in France and the UK there is no set limit, with operators merely being obliged to maintain suitable bridge clearance.

“The bottom line is that in the UK, for instance, carriers might be able to load 11 vehicles, subject to weight, while in many European countries, the maximum might be eight or maybe nine vehicles,” he notes. “In terms of profitability and load factor, there’s quite a difference: if a carrier is only able to carry eight cars to begin with, then a reduction to seven vehicles is quite a hit.”

Trailer innovations

Not unnaturally, then, attention is turning to transporter manufacturers as a means of squaring this awkward circle. Over the past few years, as automotive manufacturers’ vehicle range and model mix has tended to become heavier, longer and wider, Europe’s transporter manufacturers have helped carriers to cope by producing transporters engineered to be lighter, stronger and better able to accommodate higher and wider vehicles such as large SUVs.

Italian car transporter manufacturer Rolfo, for instance, has made a significant investment in the use of CAD and other software design tools, so as to produce structures and transporter frames that are optimised for strength, weight, and aerodynamic efficiency, achieving an overall transporter weight reduction of the order of 20–30%.

At Rimo Auto Transport, another manufacturer, the use of a special high-specification steel to increase structural strength, while reducing overall weight, has delivered a reduction in transporter weight by two tons.

So can transporter manufacturers deliver still further weight reductions? The manufacturers are not optimistic, reckoning that the easy reductions have already been made: further reductions are possible, but generally only at the margin.

Tomas Jorudas, European sales manager for Rimo Auto Transport notes that with a third axle, a transporter’s weight limit rises to as high as 44 tonnes in several European countries, including Belgium, Italy, and the Netherlands

Axle is the answer

Consequently, attention is turning to additional axles as the way forward, with ‘push’ axles, which can be raised and lowered according to the need and the load, seen as the way forward.

At Rimo Auto Transport, for instance, European sales manager Tomas Jorudas notes that with a third axle, a transporter’s weight limit rises to as high as 44 tonnes in several European countries, including Belgium, Italy, and the Netherlands. In only a few other countries, he adds, does the weight limit remain the same.

“With internal combustion-powered vehicles, third axles were only rarely called for: now, there’s a real use-case. So although we don’t yet have any models on the market, we are actively designing them, because we can see that it’s impossible to avoid them.”

Even so, extra axles only move the goalposts so far, warns Günther Percht, chief executive at car transporter manufacturer Kässbohrer.

“There’s only so much that can be done to eliminate further weight from transporter structures, and we can see the limit of what can also be achieved by adding axles. The reality is that carriers will have to change their loading practices—making more use of mixed loads, for instance—or accept that they will be carrying fewer vehicles. Once EV market penetration reaches 20% or so, that will be the situation.”

How will the marketplace respond? Will transport rates rise? Will two-tier pricing emerge, where EVs and conventionally-powered vehicles attract different ‘rate cards’? No one yet knows, or is willing to speculate. And nor does everyone actually accept that such outcomes are inevitable. ECM’s Stuart, for instance, notes that battery innovation and technology is moving at a very fast pace. So it is perfectly possible, he points out, that the weight penalty presently associated with EVs will diminish over time.