The technology race in Electric Vehicles
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The technology race in Electric Vehicles

The Climate Change topic has captured the public and media interest for quite some time now. With the popularity rise of this theme, other related topics rode the same wave and became object of interest for the mainstream media.

The popularity of Electric Vehicles (EV)

Using Google Trends score as a popularity proxy, we observe that the Climate Change topic reached its popularity peak in 2009 (December); this was most likely driven by the United Nations Climate Change Conference in Copenhagen at the same date. As for the EV topic, its popularity peaked by mid-2008. We can think of two potential causes for this 2008 spike: first, the media excitement around the Tesla Roadster, the first production EV to use lithium-ion cells and also the first to have a range over 200 miles1; second, the use of the EV topic by the candidate Barack Obama.

Google Trends Popularity Score of EVs and Climate Change

Fig. 1: Google Trends Popularity Score of EVs and Climate Change

Source: Google Trends, 12.03.2019

Fast forward 11 years to 2019, and the EV topic has seen its popularity rising for an extended period of time. These are good news for the Copenhagen Accord of 2009, described by Ban Ki-moon as a “significant step towards a global agreement to reduce and limit greenhouse gas emissions”2.

Tying all the knots together, we are led to conclude that the EV topic is an effect of all the climate action plans enacted by different governments across the world. It is now fairly well accepted that the path to decarbonisation of road-based transport will be composed of EVs. However, it is also true that there is still significant debate among industry experts on which type of technology will be the winner in powering the future of transportation.

At Toyota, we are looking out 50 years and even more decades into the future. I do believe that the fuel-cell vehicle is the ultimate environmentally friendly car.

AkioToyoda, CEO Toyota


In this Thematic Insight we discuss the potential of an emerging technology, Hydrogen Fuel Cells, as an application for road-based transportation. Then, we assess how this technology compares with the more common Lithium-ion batteries.

The case for Hydrogen Fuel Cells

The market share of EVs has undoubtedly been growing at a fast pace. National governments have provided a wide array of incentives to drive EV adoption, while other stakeholders such as automakers have been increasing the number of available models, as well as heavily investing in research and development. Despite the progress, the market share of EVs is still residual, and largely dominated by battery electric vehicles (BEVs).

One important insight about the current state of EVs adoption, is the fact that the most common technology used in passenger cars (Lithium-ion), does not seem to fit the demand requirements of some market segments. The long-range, and the high-utilization transport markets, seem to have specific requirements that the Lithium-ion technology, at least in its current state, is no able to satisfy.

Fig. 2: Electric Vehicle Sales by technology

Source: Frost & Sullivan, published 2017

BEV: Battery electric vehicle; PHEV: Plug-in hybrid electric vehicle; FCEV: Fuel Cell electric vehicle

It is fairly straightforward to understand why there is a low adoption in these market segments. The long-range transport faces what is perhaps the more important barrier to general EV adoption: range anxiety3. The solution for this issue is not easy; adding more batteries would add to the range, but also lead to a higher price and heavier vehicles. Thus, the conundrum range-price-weight, can only be solved through more efficient batteries rather than a simple addition of batteries. The high-utilization transport segment also faces a significant constraint; due to the nature of its utilization schedules, this segment requires short recharge times; even though fast charging for Lithium-ion batteries is already available, there is a negative impact on battery life4. As such, to serve both these segments, one would require a technology that allows for a reasonably fast charging, and for an acceptable range without a proportional weight increase. Hydrogen fuel cells are thus a good candidate to cater these segments.

How do Hydrogen Fuel Cells Work?

Hydrogen fuel flows to the Anode on one side of the fuel cell; on the other side, an oxidant (oxygen or air) is channeled to the Cathode. At the Anode, a platinum catalyst causes the hydrogen to split into positively hydrogen ions (protons), and negatively charged electrons. At the Cathode, the electrons and positively charged ions combine to form water, which flows out of the cell.

Fig. 3: Visual Representation of the mode of operation

The Proton Exchange Membrane (PEM) allows only positively charged ions to pass through it to the Cathode. The negatively charged electrons are then forced to travel along an external circuit to the Cathode, creating electrical current.

Characteristics of rechargeable batteries and hydrogen fuel cells

Fig. 4: Characteristics of rechargeable batteries and hydrogen fuel cells

Source: Cano, Zachary et Al "Batteries and Fuel Cells for emerging electric vehicle markets", Nature Energy, Vol. 3, April 2018, 278-289 (2018)

As the above figure shows, hydrogen can be stored with a specific energy that is far greater than batteries. Following the “no free lunch” principle, hydrogen tanks and fuel-cell systems are relatively expensive, due to the use of platinum, carbon fiber, humidifiers, and heat exchangers5. However, given these physical properties, fuel cell electric vehicles (FCEVs) costs are less sensitive to increased driving range as increasing the range would only require increasing size, quantity, or pressure of hydrogen storage tanks, which are lighter and cheaper than Li-ion battery packs, on a per kWh basis6. As it has been occurring with Lithium-ion battery costs, the increase in production volumes is expected to drive prices of hydrogen tanks and fuel cells down.

The reader may at this point be asking her- or himself, why the industry is not more eager to adopt hydrogen fuel cells instead of Lithium-ion. The answer is nuanced. First, some auto brands are indeed dedicating a significant part of its research effort to FCEVs (Daimler, Toyota, Honda, and Hyundai); however, there are effective barriers to the adoption of FCEVs that require significant investments, specifically related to the development of the hydrogen transportation and distribution infrastructure.


The physical properties of hydrogen fuel cells appear to embed the potential to address the needs of specific segments of the road-transport market. However , it is undeniable that Lithium-ion BEVs are the unrivalled force currently dominating the EV space. The technology race is on, but this is not necessarily a zero sum game between the different technologies. The different advantages and constraints of these technologies may simply result in either technology addressing different market demands.

Regardless of the result of this “race”, it seems clear that the future of road-based transportation will necessarily be composed of widespread EV adoption. As such, the infancy stage of some of technologies, as well as the infrastructure development needs, appear to be a fertile ground of growth and investment opportunities.

Funds Facts
Credit Suisse (Lux) Infrastructure Equity Fund

Fund management Credit Suisse Fund Management S.A.
Portfolio manager since
Credit Suisse Asset Management (Switzerland) AG, Zürich
Anna Väänänen; Werner Richli
Fondsmanager seit September 1, 2017; June 1, 2013
Fund domicile Luxembourg
Fund currency USD, EUR
Inception date March 31st, 2006
Management fee p.a. For unit class B and BH: 1.60%; for unit class EB: 0.90% for unit class IB and IBH: 0.90%; for unit class UB and UBH: 1.00%;
TER (as of May 31, 2018) Unit class B 1.90%, unit class IB 1.20%, unit class BH in EUR 1.90%, unit class EB2 1.20%, unit class UB 1.30%, unit class UBH in EUR 1.30%, unit class IBH in EUR: 1.20%
Maximum Sales Charge 5% for all unit classes except unit classes IB, IBH and EB (max. 3%)
Single Swinging Pricing (SSP)1 Yes
Benchmark MSCI World (NR)
Unit classes Unit class B, IB, UB, EB in USD; unit class BH, IBH and UBH in EUR
ISIN USD unit class B: LU0246496953 USD unit class UB3: LU1144414494
  USD unit class IB:  LU0246497258 EUR unit class UBH3: LU1144414577
  EUR unit class IBH: LU0348405472 USD unit class EB2: LU1038193931
  EUR unit class BH: LU0246498066    
  Please note that not all share classes may be available in your country.

Source: Credit Suisse, March 31, 2019

1 SSP is a method used to calculate the net asset value (NAV) of a fund, which aims to protect existing investors from bearing indirect transaction costs triggered by in- and outgoing investors. The NAV is adjusted up in case of net inflows and down in case of net outflows on the respective valuation date. The adjustment in NAV might be subject to a net flow threshold. For further information, please consult the Sales Prospectus.

2 For Institutional clients only.

3 In Italy: For instituonal clients only.

Fund Risks
Credit Suisse (Lux) Infrastructure Equity Fund

  • Equity market risk: The fund is exposed to changes in global equity markets
  • Regulatory and political risk: Most infrastructure stocks are regulated and changes in regulatory or political environment may positively or negatively impact the valuation of the stocks held in the portfolio
  • Many infrastructure companies have high levels of debt resulting in higher risk related to gearing than most listed companies
  • Up to 40% of the fund’s assets can be invested in emerging markets. Political, economic and exchange rate risks in these countries may have an impact on the fund

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