Article Type: artikel

What does the future hold for automotive bi-directional charging?

Bi-directional charging holds a great deal of promise for electric vehicle (EV) drivers, grid operators and energy companies. Tom Hooker, Autovista24 journalist, takes a deep dive into the technology and its development.

Automotive bi-directional charging is still in its infancy. Only a handful of manufacturers currently produce EVs capable of supporting the technology, with limited infrastructure also affecting adoption. Brands exploring bi-directional charging include Volkswagen (VW), BYD, Volvo, Nissan, Kia, Hyundai, MG, Mitsubishi, Polestar, Cupra, Genesis and Fisker.

To charge an EV, alternating current (AC) is taken from the grid and turned into direct current (DC) by a converter that is either in the charger or the vehicle. This is known as unidirectional charging.

Bi-directional charging takes energy from the grid in the same way but also allows energy to be sent back from the vehicle for use in a variety of applications. These range from vehicle to grid (V2G), vehicle to home (V2H), or other electrical devices or ‘loads’ (V2L).

Despite clear benefits, the reality of the technology becoming an industry standard is still a distant prospect for manufacturers, suppliers and charging companies. Building the infrastructure needed to implement bi-directional charging will be expensive, on top of ongoing developmental costs.

Charging ready

A variety of chargers already support the dual flow of electricity. However, the effectiveness of two-way charging and the amount of energy that can be put back into the grid or people’s homes depends on the advancement of EV batteries.

‘Solid-state batteries are currently in development within the industry, which is going to bring charging times down and it is also going to bring battery capacity up,’ Mark Ellis, head of commercial sales for Blink Charging in the UK and Ireland told Autovista24 at the London EV Show.

‘That is going to be interlinked in terms of how our product works itself with bi-directional charging being able to put energy back as the capacities go up. It is going to give more ability for power to be able to be deployed back to the grid via charging. I think potentially, we are looking at probably over the next 18 months where we could start to see things move quite quickly.’

One of the possible advantages of bi-directional charging is reduced energy bills or cash incentives from selling electricity back to the grid at peak times. This opens up the possibility of revenue generation. ‘People will be able to potentially charge in the evening at very low rates and then be able to go to work and sell that energy back to the grid or back to that company,’ Ellis said.

As well as providing a possible monetary boost for drivers, V2G charging could help grids remain stable, drawing electricity in periods of low demand and returning it at peak times. ‘I think vehicle-to-grid is probably the biggest one. Within the UK, there are issues in terms of how much power availability there is,’ Ellis affirmed.

‘Everyone is going to constantly look to add extra power or be able to obtain extra power, and I think this is going to become more prevalent, especially where there are businesses or areas where they have potential issues in terms of power generation or whether they can obtain demand,’ he said.

Fleet functionality

Fleets in particular could benefit from bi-directional charging, as multiple vehicles may be parked up at certain points in the day. Some infrastructure suppliers may see this as a more likely adoption point, compared to deploying the technology in charging stations or residential locations.

‘If you look at the on-the-go charging space, where typically you are looking at a few retail sites, people want to get the electricity as quickly as they can into their vehicle. So, the need for bi-directionality on the rapid or ultra-rapid chargers is probably less,’ said James Gale, head of eMobility at Gilbarco Veeder-Root Europe.

‘Where it does become interesting is fleets, because you have got vehicles that may be sitting at a location for a much more considerable amount of time and then you have got a whole battery waiting for you to utilise. Then it becomes really interesting. I think when you are talking about bi-directional, you have got to understand it will be useful in some situations but not so useful in others,’ he added.

Alec Knowles, UK industrial technical sales manager at Schaltbau, also sees the benefits of bi-directional charging for fleets. Battery power from idle EVs with V2H or V2L capability could help power workplaces and their electrical appliances, meaning grid energy is not needed during periods of high demand.

‘When you have a fleet with a company and you have got a number of vehicles in that car park, it could then be supplying energy to that factory or that premises during the daytime when charges are going to be at their peak,’ Knowles commented.

‘The problem is the car needs to be able to get the driver home at the end of the day, so if it is feeding energy into the factory during the day, it is about getting that balance right. Arguably at the factory location, it will have the most impact,’ he said.

Contactor capabilities

EVs feature high-voltage batteries, which can become dangerous in the event of a collision. In this situation, the network, and other electrical components need to be isolated from the battery cell. Contactors capable of working with bi-directional technology must make sure that this disconnect occurs.

‘Often the contactors that are in the market, that specify which direction the current has to flow, have got a positive and a negative terminal,’ Knowles said. ‘There are technical challenges to letting it go both ways. A lot of contactors only work in one direction, ours does work in both. But we have a symmetrical sort of architecture inside the contactor to do that,’ he said.

All of Schaltbau’s DC contactors have bi-directional capability, as Knowles sees the technology as pivotal to keeping the supply of electricity constant. ‘It is critical to the future because as home ownership of EVs increases, the whole supply chain or the supply of electricity to the vehicles is an issue,’ added Knowles.

‘The vehicles are batteries – in the evening you can have the car feeding electricity back into the house, or back into the grid. If there is a shortage in a particular area, then EVs in that area can provide the energy required short term. You can almost regard them as energy storage at individual homes,’ he argued.

Brand backing?

However, for bi-directional technology to become a future industry standard, both manufacturers and charging companies will need to back the feature. The Ford F150 Lighting is currently the only model in the brand’s range to offer bi-directional capabilities. The pickup truck is only available to European customers in Norway as well as a limited number of units in Switzerland.

‘I am thrilled to bits because I have been saying for years we can do this, and here it is being produced and being driven,’ said Patrick Harris, events specialist at Ford of Britain. But brands will need to convince the public, as most buyers are likely still unaware of the technology and its benefits.

‘But the question of bi-directional power, from the perspective I have on the ground here, is it gets asked for, but it is not a major thing that people are requesting, possibly because they do not know it exists,’ Harris said.

Elsewhere in Europe, VW announced that V2H bi-directional charging would be available in its ID. models. This is provided that the BEVs have a 77kWh battery capacity and the latest ID. software. Additionally, users will need a home power station integrated with a Home Energy Management System from HagerEnergy, although other stations will become available at a later date.

‘With the bi-directional charging function that is now available, we have tailored a new service offering to the needs of our customers,’ explained Imelda Labbé, VW board member for sales, marketing and after sales.

‘Not only can they save energy costs, but they are also making an important contribution to the sustainable use of energy,’ Labbé said.

Volvo is launching one of the first V2G pilot projects in Sweden. Trails are taking place in Gothenburg, where the brand is based. Last month, the carmaker announced it would launch Volvo Cars Energy Solutions, a business unit set up to explore V2H products and V2L services.

In the future, Volvo’s flagship model, the EX90, will be able to use two-way charging when equipped with the necessary software. This is alongside the EM90 which made its debut last month, the brand’s first luxury van which is exclusive to the Chinese market.

‘With the help of smart charging, you can charge your electric Volvo at the best available time from a sustainability and economy perspective,’ said Alexander Petrofski, head of Volvo Cars Energy Solutions.

automotive bi-directional charging — *Source: Volvo Cars*

‘The idea of building an energy ecosystem around your car and the batteries is that it allows you to save money and reduce your CO₂ emissions, while energy firms benefit from reduced grid investments and a lower overall impact on the environment,’ Petrofski said.

Another model currently exploring bi-directional capabilities is the Hyundai Ioniq 5. The BEV took part in a V2G test in the Netherlands, with 25 units used as a solar energy storage solution capable of distributing power back to homes or the grid. In Utrecht where the project took place, over 1,000 bi-directional chargers have already been installed.

This content is brought to you by Autovista24.

Which Chinese automotive brands will succeed in Europe?

Chinese automotive brands are targeting Europe as they aim to expand their businesses. Dr Christof Engelskirchen, chief economist at Autovista Group, considers which of these new brands will compete with the region’s established players.

Many organisations wonder which new automotive brand will succeed. It is almost impossible to say for certain, yet there are clues and cues as to which strategies have paid off so far. This can help guide thinking around which emerging (mostly Chinese) brands stand the best chance of succeeding in Europe.

Covert entry versus pureplay

New automotive brands seeking to establish themselves in Europe follow different playbooks when entering the market. For example, the world’s largest producer of electric vehicles (EVs), BYD, pursues a ‘pureplay’ foreign-brand strategy.

Headquartered in Shenzen, China, the company initially launched the compact SUV Atto 3 and is now focused on rolling out the Seal (a mid-size sedan with a very sleek silhouette). The Dolphin will come later, which aims to take on the Volkswagen (VW) ID.3.

The carmaker appears to have learned from the mistakes of other companies that tried and failed to break into the European automotive market. BYD has focused on building up a solid dealer network in Sweden and Germany, right from the beginning.

The manufacturer benefits from the support of Hedin Group and German dealers open to new business. This is not surprising, considering the ambitions of many OEMs to transition to the agency model.

Manufacturers’ brand strategies for entering the European market

Chinese automotive brands — *Source: Autovista Group*

The multibrand method

Great Wall Motors picked two of its brands, Wey and Ora, to lead the way in a multi-brand strategy. The carmaker partnered with Europe’s largest dealer group, Emil Frey, for both brands, with Ora also working with independent dealers.

Ora targets the lifestyle-oriented mass market with models like the Funky Cat. The brand uses TV commercials, 24-hour-long test drives and leasing rates starting at €149, backed by Santander Consumer Leasing. By leveraging several partners around subscription plans, the company has lowered the barrier to entry.

Wey targets a position as a ‘premium SUV brand’ and even names trim levels of its Coffee 01 model ‘Premium’ and ‘Luxury’. Price positioned under €60,000, the plug-in hybrid (PHEV) makes for an attractive offer. It is capable of a 146km electric range (WLTP) and features an augmented reality head-up-display, facial recognition, gesture controls and E-segment-SUV dimensions.

Similarly, SAIC Motor has chosen two brands to test the waters in Europe. One is the Chinese brand Maxus, which offers all-electric light-commercial vehicles (LCVs). This includes the eDeliver 9 and eDeliver 3, as well as a diesel-powered Deliver 9. A van and pick-up were also recently added to the brand’s portfolio.

With MG, SAIC chose to buy an established European automotive brand and revive it. It currently offers five models, ranging from hatchback to D-SUV. With 435km of electric range (WLTP), the best-selling MG4 is positioned at around €32,000 and starts at €199 per month for leasing options, backed by Arval. There have been announcements of an extended-range version, capable of covering 520km on a single charge (WLTP).

Geely is furthest along in terms of successfully engaging Europe and has done this with a partly covert approach, alongside initially buying Volvo. Any fears of inertia should be overcome with Geely’s decision to position Polestar as an electric performance brand with start-up appeal.

Polestar shares platforms and dealer networks with Volvo, as well as benefitting from association. Another European brand Geely leverages is Lotus, which is positioned as a more premium and sporty offering, representing a more niche play. Geely is also in the process of introducing two Chinese brands to Europe, starting with Lynk&Co and soon to be followed by Zeekr.

The verdict here is that while there is obviously no right or wrong approach to entering the European market, the risks involved differ.

In the short term, there are advantages to the more covert approach of leveraging incumbent European brands when entering the region. It is fast, pragmatic, and avoids the complexities and risks of building up brand positioning from scratch.

In the case of Chinese OEMs, this approach can circumvent political sensitivities, which may interfere with an entrance introduction. If and once it works, there may be opportunities for a Europe-bound brand to be brought to other regions of the world, rather than the other way around.

Most market entrants choose to compete with a brand that is foreign to Europe. This means embarking on the complex process of building up a new brand experience in an already crowded market.

In the medium term, if successful, this strategy offers higher degrees of scalability and thrust. However, there are substantial risks involved and it is unlikely that all foreign brands will be successful. Meanwhile, launching multiple brands simultaneously can be daring as it may dilute individual efforts.

European-customer centricity

In the past, brands struggled to leave a mark on Europe due to a lack of European-customer centricity in design and product specification. For example, Lexus, Infiniti and Chrysler could not captivate the hearts and souls of fickle European customers as they had in other markets.

European markets are challenging for new entrants for several reasons. Firstly, strong domestic premium brands divide the high-margin market up between themselves, and secondly, there are many strong domestic brands. Thirdly, there exists market specificities around body, equipment style and brand preferences.

For the longest time, premium vehicles faced a barrier when it came to launching into the D-segment and above. This was because these segments were dominated by Europe’s premium and near-premium brands.

Tesla was the first successful global brand to overcome this barrier, shaking the industry up and maybe even making it easier for new players to follow. However, Elon Musk’s part in this success story cannot be overestimated. It may prove impossible to copy the brand’s approach and experience similar levels of success.

A potentially better blueprint for how to succeed in Europe comes from Hyundai Motor Company. The carmaker learnt a lesson from the launch of the i40. The initial version fell victim to the D-segment launch barrier as well as not offering new stimuli to European customers.

Following this, the automotive group began to emphasise its European approach to design, product specification and decision making. This helped the company become highly successful in mainstream vehicle segments, not to mention its entire SUV line-up. This formed a solid foundation for upmarket initiatives, including pushing the performance brand ‘N’ and launching new brands like Ioniq and Genesis.

The verdict? For today and some years to come, Europe will be particularly permeable when it comes to:

Smaller/budget cars which offer great value for money,

EVs with mass-market appeal,

Design appealing to Europeans,

SUVs and crossovers,

Technological superiority in infotainment systems and electric powertrains.

Strong European focus

A strong network and a digital user journey go hand in hand. It is unlikely that any OEM would argue otherwise. Attempts to sell vehicles without a prominent network in Europe have remained a niche play or failed completely.

Even the most digital customer journey is enabled by an omnichannel approach where customers can transition between an online and an offline experience. There are prominent touchpoints for a customer, which can be enriched via the offline experience, from vehicle inspection to test drives, then from handover to servicing. These elements are part of the brand experience and prove valuable to buyers.

The agency model may change the role and focus of some dealers in the value chain, but it does not challenge the necessity of a strong network. Furthermore, the agency model is still in ‘beta mode’ and it is not yet a success story.

Additionally, Chinese brands are providing new momentum when it comes to reviving traditional dealer models with both smaller independent outlets and sizeable dealer groups. The traditional dealership model has advantages over the agency model, especially when it comes to pushing registrations.

The verdict is that new brands looking to establish themselves in Europe will need:

A strong pan-European sales and services network (which can be built up country by country),

To embrace the omnichannel approach to selling vehicles,

Successful brands to have secured initial partnerships with rental and leasing companies (and other mobility companies) to quickly maximise consumer touchpoints,

To balance centralised decision-making with European and national decision-making. While this poses a major challenge, the resulting competencies enable European centricity (focus).

Scale and credibility

Considering that EVs, made up of PHEVs and battery-electric vehicles (BEVs), will likely remain the centre of attention for the coming 20 years, some new European market entrants already outshine incumbent brands in their home markets.

BYD, for example, sold more than 1.2 million EVs in China during the first half of 2023, far more than Tesla at around 300,000. Geely Auto (170,000 vehicles) ranked ahead of VW (90,000 units), while Great Wall Motors (82,000 vehicles) topped Nio, SAIC, Mercedes-Benz, Toyota and Stellantis.

The verdict is that several new entrants into Europe are highly recognised and well-practised vehicle manufacturers, with decades of experience. Size and authenticity in their home market should correlate with their ability to attract European customers.

From the perspectives of technology, product and value propositioning, Europe presents a vacuum which new brands are eager to fill. Initial product reviews look promising. There is demand in Europe for affordable, mass-market-compatible electrified vehicles. Even PHEVs might gain a second wind with reliable, higher, real-life electric ranges beyond 150km.

From the new-player perspective, speed is of the essence. Currently, these companies are all largely competing for the same customer. Supply challenges are supporting new entrants too. Most new entrants choose to establish a foreign brand in Europe and that is a valid strategy. A major challenge is ensuring the enrichment of global decision-making with Europe-centric thinking to ensure a brand reaches its full potential.