LEK: Infrastructure Victoria - AZ/ZEV International Scan

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LEK Presentation: Infrastructure Victoria – AZ/ZEV International Scan

Key Learnings from the Presentation

The L.E.K. Consulting report titled “Infrastructure Victoria AV/ZEV International Scan,” dated June 4, 2018, provides a comprehensive analysis on the international landscape of Automated Vehicles (AVs) and Zero Emissions Vehicles (ZEVs). This report was crafted to assist Infrastructure Victoria in advising the Victorian Government on infrastructure requirements essential for the deployment of AVs and ZEVs. Here’s a summary of the key findings, insights, and strategic implications derived from the document:

Overview of AV and ZEV Technologies

• The technologies surrounding AVs, EVs (Electric Vehicles), and HFCVs (Hydrogen Fuel Cell Vehicles) exhibit varying maturity levels. EVs, being the most advanced, still show less than 2-3% market penetration in nearly all examined markets. HFCVs have seen less than 7,000 vehicles globally, and passenger AVs remain in the trial phase, with market entry anticipated in the coming years.
• The exploration covered approximately 15 international markets identified for their technological advancements and regulatory frameworks. Insights were drawn to understand infrastructure requirements and potential lessons for Victoria.

Key Insights and Recommendations

• Infrastructure and Emissions: A pivotal recommendation is the facilitation or sponsorship of zero emissions electricity production to ensure EVs significantly contribute to emissions reduction.
• Government Interventions: The report identifies a multitude of potential government interventions, ranging from infrastructure investment to regulatory adjustments that could foster the adoption of AVs and ZEVs. It also highlights the necessity for specific interventions to manage electricity demand and accommodate the infrastructure needs of these vehicles.
• Adoption Barriers and Incentives: High customer churn and the initial high cost associated with AV and ZEV technologies are major adoption barriers. Incentives, both financial and non-financial (such as priority lanes and parking), are crucial for initial uptake. Additionally, transitioning government and public transport vehicle fleets to EVs can catalyze broader adoption.
• Standards and Compatibility: For charging infrastructure and vehicle technologies, the alignment with or development of international standards is critical. For instance, the Type 2 plug has emerged as a dominant standard for EVs in Australia, compatible with most fast-charging technologies.

Strategic Implications for Victoria

• The government of Victoria is positioned to selectively adopt or initiate a range of policy interventions to accelerate the adoption of AVs and ZEVs. These interventions span from direct subsidies for EV purchases to investments in charging infrastructure and setting ambitious vehicle emissions targets.
• In the near term, no significant “must do” actions were identified for AV infrastructure, suggesting a focus on current technologies and standards might be more prudent.
• For ZEVs, particularly EVs, a strategic blend of subsidies, infrastructure development, and promotional activities could significantly impact adoption rates. For HFCVs, initiating or supporting zero-emission hydrogen production is deemed essential for meaningful emissions reductions.

About L.E.K. Consulting

Specializing in strategy, mergers and acquisitions, and operations, L.E.K. Consulting offers deep expertise across a broad range of industries, including life sciences, healthcare, retail, and transportation. The firm is known for its rigorous analysis, strategic insights, and practical solutions that produce high-impact results. L.E.K.’s approach is to collaborate closely with clients, providing tailored advice that addresses complex business challenges and opportunities.

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