Navigant Research Blog

Alternative Sales Channels Look to Avoid EV Dealer Woes

— August 25, 2016

EV RefuelingEV sales in the United States continued to climb to new heights in July, and market participants generally agree the growth is despite (not because of) the consumer experience at dealerships. Sales of plug-in hybrids are up a whopping 68% over last July, while battery EV sales are up nearly 51%. This is remarkable considering gasoline is cheaper by 43 cents per gallon than a year ago.

Many consumers have reported that trying to buy an EV is about as enjoyable as a root canal, with many dealers underinformed on charging requirements, local incentives, and even basic EV operating requirements. This frustration goes back than more than 20 years according to EV marketing guru Chelsea Sexton, who worked on GM’s EV1.

“There’s no question that dealers are one of the larger hurdles facing EVs, and that too many automakers are in denial…,” said Sexton, adding, “the only way to improve things is to start with acknowledging things need improving.”

Californian Oasis

The Sierra Club sent volunteers to California and nine other states with zero emission vehicle (ZEV) mandates and published a report highlighting  the challenges in the EV buying experience. The report noted significant differences in dealer support for EVs between the oasis that is California and the rest of the country. According to the Sierra Club, dealers representing car companies with EVs in the ZEV states were 2.5 times more likely not to have an EV on the lot than in California and to have only half as many EVs available to buy per dealership. These figures are likely much worse in the other 40 states, where it’s often easier to find a cheap seat to Hamilton than it is to find an EV.

According to the Sierra Club report, the most enjoyable place to learn about buying an EV isn’t at a dealership—it’s at one of Tesla Motors’ growing roster of customer experience centers, which scored much higher in the EV buying experience. Navigant Research’s Electric Vehicle Geographic Forecasts report expects that California will be home to 48% of all EVs on the road in the United States in 2016, which is partly due to much greater vehicle availability at dealerships.

A More Positive Experience

Reborn EV startup Karma is setting up a network of eight independent dealers and a flagship customer center. Following Tesla’s lead, Canadian company is looking to create a more positive EV experience by selling EVs from multiple manufacturers through a specialized dealer network. Perhaps it will become the Uber of carselling by turning an often-frustrating consumer experience into a less expensive and more enjoyable time.

Two other approaches to jump-start EV sales with minimal dealer assistance include group buys and putting EVs in ridesharing fleets. Group buy programs, which aggregate companies’ and individuals’ EV purchases and offer a steep discount, have worked well in Northern Colorado for Nissan, tripling EV sales above the national average. A similar program being put together in Montreal has seen more than 2,800 sign up to purchase a LEAF, well ahead of the entire country’s annual LEAF sales.

GM has decided to put many of the first Chevrolet Bolts manufactured into the Lyft rideshare fleet. The thought is that Lyft, in which GM has invested, will greatly expand the number of consumers who are familiar with the Bolt beyond what can be accomplished by dealers. As my colleague Sam Abuelsamid recently wrote, “Getting people to ride in Bolts with Lyft drivers has the potential to provide positive first-hand exposure without having to go to a dealer first.”

Rather than running around the long-standing dealer problem, automakers need to tackle the issue head-on by greatly enhancing dealer education and providing sufficient incentives to make it just as lucrative to sell an EV.

 

Fast EV Charging Ready to Accelerate

— August 3, 2016

EV RefuelingBattery electric vehicles (BEVs) are getting better with each model announced by automakers, with greater driving ranges, better styling, and more features, all at lower costs. The 2016 sales figures indicate that American buyers increasingly prefer going all-electric rather than plug-in hybrid with a gasoline backup.

By 2018, we’ll have a handful of relatively affordable 200+ mile BEVs available from a variety of automakers, which will require not only more commercial charging locations, but also faster chargers to cut down the time needed to fully recharge the bigger batteries that these vehicles utilize.

Navigant Research’s recently published DC Charging Map for the United States report projects that adding a network of 408 fast chargers could enable drivers to get around and between the top 100 U.S. metropolitan statistical areas. Plug-in hybrids, with much smaller battery packs, aren’t expected to support these higher charging levels.

DC Charging Stations for Long-Distance BEV Demand, Top 100 Metropolitan Statistical Areas

DC Charging Map

 (Sources: Navigant Research, Esri, U.S. Department of Energy, U.S. Federal Highway Administration)

These higher power stations (greater than 100 kW, compared to most non-Tesla charging stations that max out at 50 kW) would help encourage greater EV adoption by giving drivers the freedom to roam across their state or the entire country knowing that a charging station is within reach.

The federal government is doubling down on its bet on EVs through a slew of initiatives announced in July that support EV charging with the hope of increasing EV sales. The White House, in conjunction with the U.S. Departments of Energy and Transportation and other agencies, announced the availability of up to $4.5 billion in loan guarantees for companies to invest in EV charging infrastructure. Government agencies will also be working together to get more EVs into their fleets through combined purchases.

Speeding Up the Charge

In looking to get charge times closer to 10 minutes for BEVs, the U.S. Department of Energy will fund research into the feasibility of 350 kW charging and is inviting the private sector to assist. In theory, being able to recharge a BEV at near the time it takes to fill an SUV with gas would remove one barrier for time-conscious consumers. However, the high power has implications for safety (higher voltage and amperage), heat generation (potential to melt connectors), the lifecycle of the receiving batteries, and the site host.

Many utilities levy demand charges for peak power delivered over a specified threshold during the month that can cost up to thousands of dollars in recurring fees. Utilities are beginning to address the cost issue by developing new rate structures that consider fast charging, or by considering operating fast charging equipment themselves.

Seattle City Light will install and operate 20 fast charging stations to get a better understanding of the impacts of EVs on its grid. Also in Washington state, utility Avista will install seven direct current (DC) fast chargers with energy services company Greenlots as part of a larger project to evaluate EVs in demand response and smart charging programs.

And if 350 kW EV charging isn’t fast enough, electric buses in Geneva, Switzerland will soon be charging at a whopping 600 kW. ABB will be using stationary batteries to help limit the impact of fast charging 12 buses. In the world of EV charging, “fast” is rapidly becoming a relative term.

 

Utilities Rightly Taking Larger Role in EVs

— July 11, 2016

EV RefuelingWithin the span of a few short years, utilities have transitioned from being bystanders to becoming active participants in supporting the rollout of plug-in electric vehicles (PEVs). Legislators and utility commissioners have evolved their view of the roles that utilities can and should play, particularly in incentivizing or operating electric vehicle (EV) charging infrastructure.

A few years ago, several states, including California, prohibited utility ownership of EV charging infrastructure. Today, utilities are not only encouraged to operate charging stations, but are also compelled to do so. Public utility commissions have recognized that switching from gasoline to renewably powered electricity for transportation is good for air quality and the local economy, and many have updated their rules to allow utility participation.

Since direct current (DC) fast charging (with power delivered at 50 kW-100 kW or higher) has the potential to affect grid operations, many utilities are focusing on ownership of these assets. For example, Hydro-Québec is expanding its Electric Circuit of fast chargers along Highway 20 in the province of Quebec in Canada. Meanwhile, AGL Energy is offering a flat $1 daily fee for unlimited residential EV charging in Australia.

Change on a Global Scale

This is truly a global phenomenon. My recent travels have taken me to Honolulu, Munich, and Dubai—all of which have EV charging stations operated by utilities. In Hawaii, utility Hawaiian Electric Co. (HECO) is embracing PEVs as a method of helping to balance the power grid in the state. Hawaii has an ambitious goal of moving to 100% renewable power generation by 2045.

In many cases, PEVs are good load additions, as vehicle charging can be timed to balance intermittent solar and wind power production. Utilities are also launching pilots where PEVs are enrolled in demand response programs, as Pacific Gas and Electric (PG&E) and BMW are doing in Northern California. The new load from PEVs can help utilities replace revenue lost to the myriad of energy efficiency programs that are flattening or reducing power consumption. PEVs will also become more frequently accessed as part of the growing use of distributed energy resources (DER).

Navigant Research will discuss the many opportunities for utilities to derive value from using PEVs in demand response, as DER, and for load shifting and other ancillary services during a webinar on July 12.

 

Street Lights Are the New Smartphones

— May 11, 2016

BulbsJust as cell phones have evolved into multifunctional digital information devices, the once humble street light is becoming a hub for monitoring a variety of urban activities and sharing data with networks.

Navigant Research identified this trend in its 2015 Smart Street Management report, stating that, “Smart street lighting is becoming one of the most attractive solutions for cities looking for an immediate effect on energy consumption and operational costs while also laying a foundation for a broader range of applications.”

As street lights are being upgraded to more efficient LEDs, pole owners are seizing the opportunity to add networking capabilities, sensors, cameras, and power management intelligence to leverage the lights’ distributed electrified reach to provide a variety of services across cities. The convergence of city management technologies with street lights was on display throughout the recent Intertraffic conference in Amsterdam.

Intertraffic Conference

Examples highlighted at Intertraffic included Streetline, of San Mateo, California, which is working with Cisco on using cameras fixed to street lights as a less expensive alternative to sensors to predict parking availability. According to Kurt Buechler, Streetline’s senior vice president, the cameras cost around $100 each and are connected to a cloud service that performs analysis on the collected data. Cisco is also working on integrating cameras and Internet of Things technologies to street lights in the Netherlands via its IT networks.

Also at Intertraffic, Spain’s Circontrol announced its Trilogy offering, which combines lighting, smart parking detection, and indicators that show parking availability. Circontrol also displayed an integrated parking facility energy management system that uniquely incorporates electric vehicle (EV) charging management. Intelligent transportation systems vendor Q-Free is combining its air quality monitoring technology with street lights in Medway, England.

EV Influence

Other companies taking advantage of the ubiquitous presence of powered street lights include BMW, which adds EV charging capabilities through its Light and Charge initiative. In the city of San Jose, California, the SmartPoles pilot project is using wireless technology from Ericsson and Philips’ energy efficient lighting equipment to reduce costs while providing more flexible lighting management.

The convergence of smart parking, traffic management, EVs, and environmental monitoring—often using connected street lights to collect and share data—will bring much more holistic views to smart city managers looking to understand the full effect of transportation on urban life. Standards for data collection and communications protocols are quickly evolving to enable this broader view and will be of growing importance as cities look to understand and mitigate the effect of increased congestion and urbanization.

 

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