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Can Battery Electric Vehicles Disrupt the Internal Combustion Engine? Part 2: "Kind-Of"

Schalk Cloete's picture
Research Scientist Independent

My work on the Energy Collective is focused on the great 21st century sustainability challenge: quadrupling the size of the global economy, while reducing CO2 emissions to zero. I seek to...

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For Part 1, please click here.


  • Battery electric cars do not meet the basic criteria for disruptive innovation.
  • Small electric vehicles (SEVs), on the other hand, do have disruptive potential.
  • Our urbanizing world with its rapidly expanding middle class and increasing resource constraints will reinforce this trend.
  • Internal combustion engine (ICE) vehicles may lose substantial market share to SEVs, but will remain an important part of the transportation system.


“Disruption” is a word often associated with electric vehicles, especially when Tesla motors is under discussion. According to the formal definition of disruptive innovation, however, electric cars like the future Tesla Model 3 or the Nissan Leaf cannot qualify as disruptive technology.

The Harvard Business Review explains it nicely in this brief article. Basically, the primary issue is related to the first and most basic criterion for disruptive innovation: the product must either target overserved customers (by offering lower performance at a lower price) or create a new market (by targeting customers who couldn’t use or afford the existing product). Being more expensive than ICE cars (see part 1 of this article), standard electric cars certainly do not meet this criterion and are therefore unable to disrupt the internal combustion engine on a large scale.

Small electric vehicles (SEVs) such as neighbourhood electric vehicles and electric bicycles do meet this criterion (and the other criteria mentioned in the article). Simply put, these technologies can provide the most essential services currently delivered by ICE vehicles at a much lower price point, thus drawing many overserved customers away from ICEs and winning many additional customers who simply cannot afford to own a car.

As the global middle class rapidly expands, environmental constraints continue to tighten and society continues to evolve beyond the current primitive consumerist paradigm, this disruptive trend should accelerate. Indeed, an ever expanding range of SEV models with steadily increasing performance and features should do very well in this environment.

Why so optimistic about SEVs?

It is clear that the global trend is towards greater urbanization and higher population densities. One of the main practical drivers behind this trend is that higher population concentrations bring people, services and employment opportunities closer together, thus cutting down on time and resources required for transportation. Herein lies a large potential for SEV disruption of the internal combustion engine.

The vast majority of trips made in such densely packed urban environments are less than 10 miles in length (see data from the UK below as an example). Many people living in this environment will be able to meet their daily transportation needs with similar (often greater) speed and convenience at an order of magnitude smaller cost using SEVs as opposed to regular cars. As battery technology continues to improve, SEV performance may well reach the level where selection of an SEV over a regular car becomes a no-brainer for a large portion of the rapidly growing urban population.

UK car trips by distance

Almost just as important as this order of magnitude reduction in cost is the order of magnitude reduction in space requirement. Dense urban environments cannot allocate large amounts of space to wide roads and extensive parking lots. As a result, traffic in such environments often becomes horrendous, leading to large economic inefficiencies and stress-related ailments. SEVs can essentially eliminate this problem by taking up an order of magnitude less space.

Bus bike car space requirement

A third benefit, particularly applicable to electric bicycles, is harder to quantify, but perhaps the most important of all. It is becoming clear that moderate daily exercise can greatly reduce the risk of degenerative disease as well as significantly increase productivity, creativity and self-esteem. Given scary stats such as the US spending 1 in every 6 dollars of GDP on healthcare combined with soaring rates of debilitating mental disorders, this is a tremendously important point. It will be a while before society evolves to the point where people choose an e-bike over a car for health/wellness reasons, but the trend is definitely in the right direction.

Cancer-sedentary living

Finally, the environmental benefits of SEVs over standard cars are obvious. Hauling around one order of magnitude less weight from point A to point B naturally consumes much less energy. Just as importantly, the compact city planning and healthier populations resulting from a transportation network heavily reliant on SEVs will bring large further improvements in economic efficiency, thus facilitating a decoupling of GDP and energy consumption.

A potential SEV future

The first thing to mention in this section is that standard cars will still play a major role in a future high-SEV transportation network. Naturally, SEVs will not be practical or safe for longer, high-speed travels or for situations where a large amount of cargo needs to be transported. That is why the title of this piece says “kind-of” instead of “yes”.

It is likely that many households will still own a standard ICE car in a future high-SEV scenario. This vehicle will be used for the small fraction of trips which cannot be made using an SEV. The internal combustion engine will be preferred because it should be fairly cheap (to justify the low utilization rate) and have a long range (to conveniently enable occasional longer trips).

Alternatively, car-share schemes could become much more broadly available and advanced. People will then be able to conveniently access any kind of vehicle they require at any given time for a modest price. It is also likely that people will leverage the large savings and overall economic efficiency gains brought by SEVs to pay for standard car transportation services such as grocery deliveries, taxies and couriers. The economics of these kinds of services can be further improved by smart use of IT (e.g. Uber).

As for the SEVs themselves, their low up-front cost can grant greatly enhanced mobility to literally billions of people who would not be able to afford a regular car. The economic development value of this alone is truly enormous and, not surprisingly, this potential is already being actively tapped in China (check out the numbers on the bottom right of this IEA link). As a potentially even more attractive alternative, city councils could decide to offer a public SEV service such as e-bike system recently launched in Copenhagen. Such a system would put cost-effective, green and healthy personal transportation at the disposal of all citizens. It can even be argued that such a system could be delivered free of charge due to the large economic benefits it will unlock, thus ensuring rapid and broad adoption.

Such a future of publicly available SEVs complemented by smart and efficient mechanisms to deliver the services of standard cars to customers on demand really sounds very attractive. As an added bonus, the transition to such a system does not require holistic overhauls of existing systems or the buildout of extensive new infrastructure (in most cases). When SEVs reach technological maturity, broad adoption by the public should therefore be quite rapid and smooth.

Personal experience

I live in Norway; one of the most progressive countries on Earth and a regular feature at the top of the Human Development Index. Here, almost everyone enjoys a moderate-to-high standard of living (primarily thanks to oil and gas from the North Sea), but wealth is not publicly displayed through status symbols and the general population possesses a relatively high level of environmental awareness. Norway is therefore a good indicator of possible future trends in a wealthier but environmentally constrained world.

It is quite common in Norway not to own a car. In fact, most younger people (under 35) in my research group don’t own a car even though they can easily afford one. Public transportation networks are well developed and many people (including myself) use a bicycle as a primary mode of transportation. With the recent advances in battery technology, however, electric bicycles are rapidly gaining in popularity.

Small neighbourhood electric vehicles (NEVs), mostly driven by senior citizens, are also becoming regular sightings on sidewalks and in bicycle lanes. Larger NEVs are still rare, but, since the speed limit in Norwegian towns is only 40 km/h (often a legal requirement for driving NEVs on the road) I expect this to change as soon as the enormous incentives for standard electric cars are phased out over the next couple of years. Even the greens are now advising against this very costly policy.

It also seems like e-bikes are finally going to get some incentives, something I reckon is better policy by some orders of magnitude than heavy subsidies for regular electric cars (incentives for 200 e-bikes will cost about the same as current incentives for a single Tesla). In addition, political momentum is gaining to transform the Oslo city centre into a carless zone and similar initiatives are brewing in other Norwegian towns. This development would obviously bode well for SEVs, especially e-bikes.

Personally, I have been using an e-bike for two years now. It certainly brings a lot of convenience relative to a standard bicycle and, even though it doubles the price of a bicycle, ownership costs easily remain more than an order of magnitude less than a car. Savings from my cycling habit have enabled me to buy a flat and achieve complete financial security very early in my career. The automatic daily exercise from cycling is also an important part of the reason why I have not been sick for a single day over the past 7 years.

When I really need a car, I rent one or simply borrow from a friend. Aside from that, the town I live in enables me to conveniently commute to work and reach all necessary service outlets by e-bike ride of 20 minutes or less. The occasional longer travel is mostly done by plane with an airport taxi providing a very convenient link between my front door and the airport lobby.

As far as I can see, this is our best shot at a sustainable transportation future in a world where the global middle class must quadruple in size within ever-tightening environmental constraints. What do you think?

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Ike Bottema's picture
Ike Bottema on Mar 24, 2016

“A third benefit, particularly applicable to electric bicycles, is harder to quantify, but perhaps the most important of all. It is becoming clear that moderate daily exercise can greatly reduce the risk of degenerative disease as well as significantly increase productivity, creativity and self-esteem.”

Could there then be a market for petal-assist SEVs? A few reasons why the e-bike doesn’t stack up well to an SEV (or any vehicle with an enclosed shell) include inclement weather, security, belongings transportation, and yes safety. This would allow folks to move their gym into their vehicle but it’s doubtful the additional range would be a great selling point other than giving some assurance that if the battery runs dry a short distance from home, well get petalling!

Nathan Wilson's picture
Nathan Wilson on Mar 23, 2016

Comedian Tina Fey once said of the Segway (a stand-up Small Electric Vehicle), “it will totally revolutionize the way people get hit by cars”.

As I recall, 40,000 Americans die each year in car crashes, so mixing large and small vehicles (or vehicles and bicycles) on the same roads sounds scary. Remember, cars are big for several reasons.

I took a bus tour of Barcelona Spain not too long ago. The older parts of the city pre-date the automobile, and the way the buildings are laid out, there is very little parking for cars; motorscooters are hugely popular there, because they can be parked on the sidewalk (they have great subway service too). But newer sections of the city look like suburban America, with highways and shopping malls with plentiful parking.

It certainly makes sense for societies to evolve away from highways, long commutes, and large cars, but American cities are designed around them, and it could take a century to redesign them. So it will be interesting to see if developing nations can skip the suburban phase. Expect Asia to lead, in the 1970s, the island nation of Singapore bull-dozed their suburbs, and forced their people to move into hise-rise apartments

Engineer- Poet's picture
Engineer- Poet on Mar 24, 2016

well get petalling!

Are you sure you don’t mean?

rather than


Edit:  Foo, the images don’t align where they were originally put in the text… and there seems to be no way to have them appear just once after fixing that.

Bob Meinetz's picture
Bob Meinetz on Mar 24, 2016

With many drivers addicted to the thrill of putting the “petal to the mettle”, pedaling petal-powered SEVs will likely remain an uphill baddle.

Engineer- Poet's picture
Engineer- Poet on Mar 24, 2016

But the ones who make it will come out smelling like a rose.

Schalk Cloete's picture
Schalk Cloete on Mar 24, 2016

Yes, no doubt e-bikes will have to extend the range of offerings to include various degrees of enclosing shells. Several such models are already available. About safety, the best is probably to include bicycle paths in city planning. Since such paths can be quite narrow, it is mostly feasible at a modest cost. About whether, I’ve found that a good raincoat handles this challenge quite well, but I can understand that this will be a problem for most.

The idea of moving your gym to your vehicle sounds good, even good enough for a future marketing slogan to a more enlightened consumer base. The common practice of driving in a fossil fuelled car to a gym built on fossil fuels to go and burn fossil fuelled foods on a fossil fuelled treadmill has always struck me as quite bizzarre.

Hops Gegangen's picture
Hops Gegangen on Mar 24, 2016

This news just in. It’s a bit exotic, but it shows what sort of innovations are in the pipeline……

The precision-length nanotubes, it is believed, will allow for more elegant design of 3D anodes in a microbial fuel cell, sharply improving the efficiency and reducing the cost. We’ll have to see about scale-up, that’s for later.

Assuming it scales effectively to transport-scale, that microbial fuel cell uses selected cyanobacteria or bacteria to generate electricity for an electric motor, from an energy-dense fuel. That is to say, a bio-battery that has immense range compared to an electric battery.

Engineer- Poet's picture
Engineer- Poet on Mar 24, 2016

One of the sad realities is that people drive to gyms and run on treadmills because there are next to no street criminals at the gyms. It’s the same reason that people avoid public transit. Noticing this is taboo, of course.

Oscar Fleury's picture
Oscar Fleury on Mar 23, 2016

Planning for a car-free city center in Oslo is kind of overreacting to the fact that mixing up standard cars with SEVS is not an option. A less radical solution would indeed consist in simply banning standard cars (and of course buses and trucks) from the city center, so as to make it into a SEV-only area. And after all, why the centre only? The whole urban area could well be deserved exclusively by SEVs, with buses and trucks replaced by SEV-road-trains for passengers and mini-containerized cargo — whereas cumbersome cargo coud be hauled into the city center by dedicated electric heavy-lift helicopters. With SEVs not larger than 1 m, intercity travel could then be assumed by specialized pick-ups parked at the periphery of urban areas and designed for transporting an SEV on a very low cargo floor extending between the rear wheels.

Over time, these intercity pick-ups could be replaced by personal electric VTOL rotary-wing aircraft with a detachable cockpit used as an SEV to drive downtown.

Once the urban areas accessible to SEVs only, all streets could become one-way and all level crossings roundabouts (needing minimum or no infrastructural changes at all) — with the number of parking spaces increasing by an order of magnitude.

Schalk Cloete's picture
Schalk Cloete on Mar 24, 2016

Interesting. Yes, methods to convert chemically stored energy efficiently to electricity in small devices are certainly interesting research topics. Thus far, fuel cells appear to be the best solution, but other solutions such as the link you posted are also interesting.

I’ve also heard of a flow battery solution where you basically replace your electrolyte at a filling station just like we fill up our gasoline cars today.

Schalk Cloete's picture
Schalk Cloete on Mar 24, 2016

Indeed. One can get very creative with transport solutions in such a future scenario. It would be really interesting to see a thorough socio-economic cost-benefit study of some of the options you described. About 20% of household budgets are spent on personal transportation in the developed world. Future SEV scenarios would certainly cut this pecentage substantially, allowing consumers to spend the surplus on other much more interesting and rewarding things.

Schalk Cloete's picture
Schalk Cloete on Mar 24, 2016

True, SEVs will probably not take America by storm any time soon, but luckily America will be a much smaller player in the global energy consumption landscape by 2050 than it is today. Most global urban environments are yet to be built, thus allowing for much more compact planning. Many European and first world Asian urban environments are also quite well suited to SEVs, so a significant increase in SEV usage can be expected.

America will be an interesting case to watch. Transportation choices enforced by the massive infrastructure investments in suburban sprawl may well put the US at a significant competitive disadvantage over coming decades. The US is undoubtedly rich and innovative enough to handle this challenge, but the inherent requirement to transport people and things over such large distances in highway-worthy vehicles will take its toll in an environmentally constrained world.

Lewis Perelman's picture
Lewis Perelman on Mar 26, 2016

Plausible argument as far as it goes. But ‘kind of’ disruptive really means ‘no.’ That is, if you go by Clayton Christensen’s concept of disruptive innovation.

What is more disruptive to the established industry model is the rapidly declining interest among the younger generation in car ownershop at all. The advent of autonomous vehicles also is far more transformative than what is described here. Add in Uber, Lyft and similar ride sharing concepts.

Ford is now planning to transition toward a service oriented business model to adapt to these trends.

Schalk Cloete's picture
Schalk Cloete on Mar 27, 2016

It will be interesting to see how this plays out. My guess is that, on a global scale, Uber and autonomous vehicles will make most of the headlines, but SEVs will make most of the impact. This recent article on Bloomberg is worth a read for an indication of the scale on which the SEVs (or LEVs as they are referred to in the article) are already being deployed.

I see this primarily as a developing world trend which may also become quite popular in Europe and developed Asia. The sprawl of the US presents a less suitable environment for SEVs.

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