Navigant Research Blog

The Need to Balance Ride-Hailing Costs and Benefits

— April 26, 2018

People who frequently use ride-hailing and carsharing services enjoy the flexibility and freedom that comes from operating or owning a car. Others complain about the perceived shift back to personal car use from public transit and increases in traffic congestion.

Perspectives from Texas

Case in point is the city of Austin, Texas, where Uber and Lyft have returned after a 2-year hiatus. According to Automotive News, not everyone in the city was happy to see the services return, with some residents miffed about the increasing congestion. Adding to the fray in Austin is General Motors, which recently brought in a fleet of all-electric Chevrolet Bolts via its Maven Gig rental program. The Bolts are offered to people without a car who want to work for the ride-hailing and delivery services, with drivers paying weekly rental fees. The Bolts provide the benefits of zero-emissions driving, but still add to the number of vehicles on city streets.

Austin was rated as one of the 26 best US cities to be an Uber driver based on analysis of earnings per trip. All of these cities will likely see more ride-hailing traffic in the coming years. According to Navigant Research’s Mobility as a Service report, the number of drivers working for ride-hailing services in North America will grow by 20% annually and surpass 5 million in 2026. The benefits and costs of these services to the cities where they operate will continue to generate debate.

Are Millennials Killing the Personal Vehicle, Too?

There have been several studies on the impact of ride-hailing, including analysis by the Institute of Transportation Studies at the University of California, Davis. According to a recent report, ride-hailing customers report using public buses, light rail, and bicycles less, but actually walked and took trains more. While traffic may be increasing, parking is getting easier as people are parking at destinations less, and many cities are seeing declining rates in car ownership. According to UC Davis data, 9% of millennials who use ride-hailing services disposed of one vehicle in their household, and others have delayed car ownership. As the frequency of using ride-hailing services increases, the likelihood of giving up a car rises, while vehicle miles traveled in personally owned vehicles declines.

Sharing Services Continue to Gain Popularity

Between 2010 and 2015, several of the largest US cities saw declines in vehicle ownership among millennials, including Seattle, Detroit, Washington, DC, New York, and San Francisco. The decreases in vehicle ownership are likely to continue as ride-hailing and carsharing services rise in the coming years.

There are positive repercussions for urban land use with the reduction of vehicle ownership and personally owned vehicle trips. Eliminating parking spots in the urban core frees up spaces for greening cities and other uses that are more aesthetically pleasing than parking. Reduced vehicle ownership will make more spots available in residential areas for those drivers who retain their cars.

Economic Benefits

Ride-hailing services also are good for the economy as customers can freely travel to areas with limited parking, stay out later, and indulge in drinking alcohol knowing that a safe, reliable ride is available in minutes. A recent study from the University of Pennsylvania found a correlation between the presence of Uber and reductions in drunk driving, a safety benefit for all. Another benefit is less costly transportation access for an aging population and people with disabilities. Uber recently announced the UberHealth service, which enables caregivers to book appointments for patients.

Ride-hailing should not be left unchecked to create more traffic problems and reduce use of public transit. That said, the benefits of ride-hailing services for customers and local economies are real.

 

Gas-Sipping Nissan Makes Argument for Driving Electric

— February 27, 2018

Built for the Japanese market, a Nissan car with a gasoline engine is unwittingly making one of the best arguments for driving electric. The Nissan Note e-Power, which uses an electric motor to drive the wheels 100% of the time, has received high praise from consumers for its “exhilarating acceleration.”

According to Automotive News, 65% of Japanese customers paid for the premium feature of an electric drivetrain, which also yields a fuel economy rating of 77 mpg based on the Japanese test cycle. Based on the highly positive response, Nissan will bring the e-Power electric drive system to the US in the near future, potentially showing up first in the luxury Infiniti brand.

The e-Power system is effectively a range extender, with similarities to the BMW i3 or Chevrolet Volt architecture, using a small three-cylinder, 1.2 L gasoline engine as a generator to charge a 1.5 kWh battery that powers the 80 kW electric motor. The electric drivetrain of the Note is not as robust as the battery-electric LEAF (40 kWh battery and 110 kW motor), but it is well ahead of the Nissan Rogue hybrid (0.8 kWh/30 kW). The Note is more akin to operating like a hybrid diesel locomotive than a plug-in EV.

Nissan e-Power System Architecture

(Source: Nissan)

Smooth acceleration and immediately available high torque are among the hallmarks of electric driving performance, which lead to an experience that is “…emotional and fun to drive,” according to Philippe Klein, Nissan’s chief planning officer. EV drivers are happily familiar with these performance benefits, which have also led to industry-leading customer satisfaction scores for Tesla and high marks for many EVs.

Yet in the same issue of Automotive News, Editor Keith Crain wrote an opinion piece questioning the viability of electric cars. Automakers’ plans to release massive numbers of EV models “…must be based on research that none of us have seen up to now. Just look at the number of EVs that have been sold to date and you wonder who is going to buy all these newly powered cars, trucks, and SUVs,” wrote Crain.

Although there are many factors that are holding back sales of EVs (e.g., limited model availability, reduced driving range, access to charging infrastructure), according to consumer surveys from Navigant Research and others apathy about the driving experience is clearly not one.

Charging Ahead

Nissan is electrifying most of the Infiniti lineup starting in 2021, as are several other automakers—such as Volvo with the Polestar brand—to both meet government regulations and address the growing audience for zero emissions vehicles.

Using a gas engine as a range extender is not a novelty, but doing so in a car with such a small battery as Nissan has is. The original Chevrolet Volt was supposed to only use the electric motor to drive the wheels, but when the first production vehicles debuted, it could also be partially powered by the gas engine. BMW’s i3 plug-in has a two-cylinder gas engine range-extending option, and the plug-in hybrid Karma Revero was recently lauded as the luxury green car of the year. Both vehicles exclusively drive the wheels with the electric motors, albeit using much higher capacity batteries.

Though it doesn’t have a plug to charge the batteries, if Nissan is successful with e-Power in the US, it would lead to greater awareness and interest in electric locomotion. And if other automakers follow suit, a whole new audience could become hooked on driving electric and someday give up the gas engine for good.

 

The Door to Sharing EV Charging Data Is Now Open

— January 30, 2018

Industry players agree that understanding the interaction between plug-in EVs (PEVs) and the grid is critical to growing the PEV market. Utilities are interested in the analysis of charging behaviors and their impact on the daily load cycles so that they can plan for the additional load. In the US, with the exception of government-funded enterprises such as the EV Project, charging data collected by utilities, automakers, and charging service providers (CSPs) has remained proprietary to their organizations.

Electrify America Leading the Way

However, in the foreseeable future, investments by the likely largest funder of EV charging infrastructure in the US will spur greater openness by CSPs on charging data. Electrify America, the Volkswagen (VW) company that was created to comply with the terms of the diesel settlement with the Environmental Protection Agency, has been selecting CSPs that support open standards to enable the sharing of charging data.

On January 23, Electrify America, which will spend $2 billion over 10 years on charging infrastructure, awarded a contract to Greenlots to be the operating platform for an upcoming network of high power DC fast chargers. According to the press release, “Greenlots’ technology will enable Electrify America to effectively build, operate, and manage its high power charging network by providing real-time charger health status, utilization data, dynamic pricing capabilities, and predictive analytics.” In addition, Greenlots’ CEO Brett Hauser said that the company’s SKY platform will roll up data from all of the charging hardware, regardless of the vendor.

Installing Chargers

In December 2017, Electrify America announced that it would install 2,800 Level 2 chargers in workplace and residential locations in 17 of the biggest metropolitan areas across the US. For the project, which also includes multifamily and designated low income and disadvantaged community areas, Electrify America selected Greenlots, EV Connect, and SemaConnect as its CSP partners.

Both Greenlots and SemaConnect are participants in the Alliance for Transportation Electrification, a group that launched in November 2017 to promote open standards, help shape state policies and rate structures, and facilitate expansion of EV infrastructure. The open standard that the group supports is the open charge point protocol (OCPP), an international standard with origins in Europe that is gaining momentum in the US. OCPP is supported by Greenlots, EV Connect, and many of the largest global CSPs, as well as BMW.

Observing Results and Driving Adoption

By selecting vendors focused on storing and sharing data in a standard format, Electrify America will be able to see what is happening across its network, regardless of which vendor’s equipment is being used or which CSP is managing the equipment. For example, it will be able to track patterns of how electricity consumption from PEVs is influenced by weather, how the hourly load impact differs by region, or how charger utilization in different geographies can inform future investments in charging infrastructure.

While not all EV CSPs have embraced the notion of standardizing and sharing data, the size of Electrify America’s investment will likely encourage greater adoption of this notion from charging companies looking to get in on the action of VW’s substantial investments. The next formidable hurdle is for automotive manufacturers to also embrace open charging data. It is an encouraging step that Britta Gross of GM is among the participants in the Alliance for Transportation Electrification. Industry observers will be watching to see who joins this movement next.

 

Costa Rica Plans for Sustainable EV Future

— January 4, 2018

Up until now, plug-in EVs (PEVs) have been about as popular as snowshoes in Latin America due to the higher cost of the vehicles and lack of governmental focus on reducing transportation carbon emissions. However, in Costa Rica, government agencies are developing policies and infrastructure to lure automakers to send PEVs and to get consumers excited about the technology.

A Small but Ambitious Market

Costa Rica may not seem like the ideal location to grow a PEV market. The country has a gross national income per capita of just over $10,000 per year (as of 2015, per World Bank statistics), whereas most PEVs cost north of $40,000 and would be out of realistic reach for most consumers. The vehicle market is also small (just 154,000 vehicles sold annually), so it is not a top priority market for automakers to support PEV sales.

Nevertheless, with tourism to its sandy beaches and internationally renowned rain forest contributing 5% of Costa Rica’s gross domestic product, the government wants the country to project an eco-friendly image and participate in global efforts to combat climate change.

The country has set a goal of getting 37,000 PEVs on the road by 2022. On December 15, 2017, Costa Rica passed its first incentives for EV purchases, which include exemptions on the sales, consumption, and customs import taxes. According to a report from Nacion.com, this would reduce the final cost of a PEV by about 24%.

Growing Support for PEVs

Federal organizations in Costa Rica are also planning support for PEVs. The state-run utility led by Grupo ICE and Costa Rica’s integrated ministry of energy and environment (MINAE) both shared steps they are taking to promote EVs at the Third Annual Latin America Clean Transport Forum, which was held in San Jose, Costa Rica on September 20, 2017.

ICE said that with 76.6% of its power generation coming from renewables, the carbon savings of switching transportation from liquid fuels to electricity can be significant. Since 92% of residents live in private homes, pervasive access to home EV charging should smooth the introduction to PEVs. Also, the mild climate (an average temperature of 25°C) would enable PEV batteries to provide greater range and durability than in places with harsher weather. The utility is now investigating the barriers to PEV adoption and infrastructure requirements (such as charging levels and standards for collecting data) to prepare for their introduction.

EV Policy Development and Logistical Challenges

MINAE is developing a national policy for transportation electrification that will be released as part of the annual Oficializado Plan Nacional de Energía, which was due at the end of 2017 but does not appear to have been published yet. The national EV policy will set achievable goals for reducing emissions in transportation, including light and commercial vehicles as well as mass transit. These goals will align with the country’s overall climate change targets.

Despite these efforts, getting automakers’ attention to prioritize Costa Rica and other Latin American nations as PEV markets will be a challenge. With no local manufacturing plants, PEVs currently have to be imported into Latin America, and the higher cost of shipping the vehicles will need to be offset by local incentives. Consumer education in places where PEVs are rarely seen will require concerted effort from both the public and private sectors. Importing used PEVs, which have low resale values and could be used in fleets, is an effective method of introducing target customers to the capabilities of PEVs and building buzz around the technology.

 

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