Navigant Research Blog

London’s Tube Hits 150

— January 2, 2013

Imagine a megacity so congested that traffic makes it “almost insupportable for purposes of business, recreation and all ordinary transit from place to place.”  A city where the working population faces an arduous and difficult journey to the centers of business and employment, and vested interests and concerns over over-ambitious engineering plans for new transport links are delaying radical solutions to a problem that is choking economic growth.  The answer is to build a new mass transit system that will open up the city and enable it to continue to be an economic powerhouse for centuries to come.  And that’s what happened a century-and-a-half ago, in London.  (The description quoted above is by William Malins, one of the founders of the Metropolitan Railway, quoted in London in the Nineteenth Century by Jerry White.)

January 9, 2013, marks the 150th anniversary of the day the world’s first underground railway was opened in London.  The next day, January 10, 1863, saw the first rush-hour crush, as 50,000 people turned up for the first service (only half could find places).

Running 4 miles from Farringdon Station to Paddington, the Metropolitan Railway, the predecessor to today’s Tube, was the world’s first underground railway and the first urban mass transit system.  The trains were pulled by steam engines.  The idea of an underground railway powered by steam sounds like an image out of a steampunk novel, but as shown by a recent trial for January’s celebration of the Underground’s birth it was, and still is, feasible.

I am not going to suggest that the cleantech industry should take a back-to-the-future look to steam and coal-power for new approaches to urban transportation, but it’s worthwhile reflecting on the ambition and the vision of those London engineers.  Perhaps more than any other element of its infrastructure, transportation networks define a city: what’s possible, what’s impossible, how the city can grow, and what it feels like to live and work and move around in that environment.  Transport policy is also one of the main levers that city leaders have to shape the future of their city.  As I was researching our new Smart Cities report, to be published in January, it became even clearer that the way we look at transport (and its links to energy policy, building services, and various public initiatives) will determine the success of many of our current plans for smart cities.  As London found, and as have many other cities since, the decisions we make today about transit in the city will have repercussions far into the future.  So city leaders in our new megacities, and straphangers around the world, should take just a moment on January 9 to acknowledge those bold Victorian engineers.



Zipcar-Avis Deal Marks Year of Car Sharing

— January 2, 2013

The new year started off with a bang as car rental giant Avis Budget announced that it is acquiring Zipcar for $491 million in cash.  This is likely the first of many big developments in a year that will see many privately owned cars taken off the streets and replaced by fewer shared rides.  The rise of carshare programs in many urban centers, such as expansion in Paris’s Autolib and new programs in Jiading, China and in Tel Aviv, Israel will make 2013 a historic year for vehicle sharing.

Zipcar has grown to more than 10,000 vehicles and 760,000 members in five countries, and Avis paid a nearly 50% premium to acquire the company.  The acquisition places carsharing firmly in the mainstream of vehicle renting and will likely attract more corporations to participate in carshare programs.

One of the biggest advantages of carshares is that, in many cities, parking at metered spots is included.  Companies such as car2go, which is now in 17 cities globally, have negotiated with municipalities to prepay the parking fees for their customers.  This is convenient for drivers, especially in cities such as San Francisco that charge high rates for parking (including Sundays starting in 2013).  Smaller cars, which often make up the majority of a carshare program, are easier to find spots for in crowded cities.

An increasing number of carshare fleets are incorporating EVs into their fleets to provide the ultimate green city driving experience, which will boost their market share.

There’s No ‘I’ in Car

Automakers have a keen interest in understanding how this new attitude toward sharing rather than owning will affect overall vehicle demand.  If owning a car loses some of its cachet, younger urban drivers may put off buying cars or sell their current vehicles.  In places where carshare services are strategically placed to complement public transit, cars could come to be viewed as more of an encumbrance than a badge.

One study that attempted to answer some of the questions about vehicle ownership was completed in 2011 by the University of California Transportation Center (UCTC).  The study found that car ownership dropped by nearly half in households that joined a carshare program, from 0.47 vehicles per household to 0.24 vehicles.

The study also said that 62% of carshare households had no vehicles before they joined the program, which is encouraging for automakers since this is new demand for their product, even if the owner is a fleet, not an individual.

As far as I can tell this study did not add in the number of cars in the car share programs to the average vehicles per household, which would shed more light on the true net difference in vehicles on the road in carshare cities.

Perhaps America’s pro-car culture is permanently becoming more European in flavor, slanted toward what people most often need (a small car for occasional usage) versus what they think they might want some of the time (an SUV for the family).  Pike Research will be keeping track of the growing carshare industry throughout 2013.


In China, EVs are Not Necessarily Green

— January 2, 2013

Tesla Motors opened its Beijing showroom in early November, and the company’s China-based website went live in December, allowing Chinese citizens to place deposits on the Model S and the yet-to-be-launched Model X.   China’s luxury vehicle market is second only to the United States in sales, so Tesla should do well in meeting its goals to sell 5,000 PEVs in Asia annually.  Tesla’s move to access the market is one of many to be made in coming years from global automakers looking to shop PEV technology in the country.   While the adoption of PEVs anywhere is seen as a good thing for reasons both environmental and economic, in China’s case it may be a detriment.

In most regions, PEVs reduce emissions when compared to conventional gasoline and diesel vehicles on a per-mile basis.  This is due to both the significant energy efficiency improvements of electric motors over conventional internal combustion engines, and increasing penetrations of cleaner burning fuels (natural gas) and renewable resources (wind and solar) to replace coal in the overall electric grid.

The Coal Factor

As PEV’s made their first sales in the United States, some questioned whether PEVs actually reduced emissions compared to conventional and/or advanced fossil fuel burning vehicle technologies, given the increased emissions stemming from PEV development over conventional vehicle manufacture and the mix of generation resources on the grid. Results of studies in the United States have shown that PEVs do reduce emissions over conventional vehicle technologies, but it depends on the mix of generation resources used to power the grid.

Though China has made significant advances in developing wind and solar power, the country’s grid is dirty, being predominantly powered by coal.  While China is making strides in substituting cleaner fuels for power generation, the amount coal consumed will likely continue to climb as energy demand continues to grow.  The EIA reported in 2011 that around 70% of China’s primary energy use stemmed from 4 billion short tons of coal, roughly half of worldwide coal consumption.

Contributing to the severe pollution problems, in no small part, is China’s escalating number of vehicles in use.  In our report, Electric Vehicle Market Forecasts, Navigant Research estimates that in 2013 China has the second highest number of light duty vehicles in use, at more than 108 million.  While the combustion of gasoline and diesel are still harmful to the environment – combustion of either fuel produces fewer emissions of CO2 and other harmful gases/matter per million BTUs produced than coal.  Paradoxically, driving on electricity sourced from the coal-powered grid, rather than on advanced gasoline or diesel technologies probably worsens China’s dire pollution situation.

Though China promises to be a significant market for PEV automakers, it’s not quite apparent that PEVs will help the country reduce its dependence on fossil fuels.  Increased investment in natural gas and renewable resources for electricity generation, rather than coal, will make the potential environmental benefits of PEVs a reality.  At the same time, emphasizing increasing fuel efficiency through hybrid gasoline and high mileage diesel vehicles purchases will be a tangible and certain way to reduce vehicle emissions and overall pollution.


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