The electric vehicle (EV) industry got off to a slow restart in 2010 and has had its share of highly publicized missteps (e.g., Fisker, CODA, and A123), but it has already made many contributions to the economy.

First off, sales of plug-in electric vehicles in the United States generated revenue of around $1.7 billion in 2012, and Tesla Motors alone generated revenue of more than $300 million in the fourth quarter.  Sales of plug-in vehicles are up 145% this year compared to the first quarter of 2012, with more than a dozen models on the market.

Then there’s the investment in charging infrastructure equipment, which was around $92 million in 2012.  That does not include payments to electric contractors for installation work or the permitting fees that go to state and local governments to get approval for installation.  Expenditures on commercial and residential electric vehicle supply equipment (EVSE) are expected to exceed $172 million in North America and more than $713 million globally during 2013, according to data from Navigant Research.

Total Installed Commercial EVSE Stations by Accessibility and State, Top 10 U.S. States: 2012

(Source: Navigant Research)

EV charging is now available across the United States at more than 20,000 locations, which are bringing in money every day through pay-for-charging events.  Not all of the equipment providers will survive – consolidation is natural in any rapidly growing industry – and any companies that fall by the wayside should not be viewed as indicators of the broader failure of the industry.  While some of the seeds of the Department of Energy-funded EV infrastructure did not take root, the investment has been critical to increasing consumer adoption of EVs.

Another beneficiary of the EV industry is the solar industry.  As outlined in Navigant Research’s recent report, Solar and Electric Vehicles Cross Marketing Strategies, many car dealerships, including Chevrolet, Ford, and Nissan dealers, are installing solar as a visible sign to consumers that they are environmentally conscious and so that they can offer emissions-free charging to EV customers.   Many of the early EV adopters live in single-family homes and are installing solar arrays to offset their energy consumption.  In many cases the solar panels are capable of providing more than enough electricity for their EVs throughout the year.

It is easy (and headline grabbing) to focus on the failures, but that ignores the many jobs that have been created and the new and established business ventures that are poised to take off now that the industry has made it through its rough infancy.

The discovery of extensive shale oil reserves in North America has led to heightened expectations for using the domestic energy source as a transportation fuel. While environmental challenges exist for extracting and distributing fuel (safe fracking, pipeline expansion, and so on), the biggest hurdles to expanding natural gas as a fuel for passenger vehicles are related to pumping the gas into a tank and keeping it there safely. The U.S. Department of Energy (DOE) has been focusing on these challenges by providing funding to several basic research projects, which were a significant topic of discussion at this spring’s ARPA-E Summit meeting in Washington, D.C.

Natural gas vehicles (NGVs) typically require multiple cylinder tanks in order to store enough fuel to provide a range similar to that of a gasoline car.  In larger vans and trucks, this may require three or four tanks. Ford Motor Company has described the current state of storage tanks as “too large, heavy, shape limited and expensive to properly facilitate the widespread adoption of natural gas vehicles.” Through an ARPA-E grant, Ford is working on a 3-year project to develop an adsorption tank system that would increase the energy density of compressed natural gas at lower pressures. The system would enable natural gas to be stored at lower pressure while providing a driving range comparable to that of gasoline car.

Fill ‘Er Up, at Home

The DOE’s Pacific Northwest National Laboratory, located in Richland, Washington, is addressing the cost and efficiency of storage tanks with its ARPA-E grant. The lab is working on developing a ball-shaped tank that would increase the storage efficiency over current rectangular tanks by 90% while using less expensive materials.

Meanwhile, General Electric (GE) is resurrecting the concept of home refueling of natural gas (which was unsuccessfully pitched previously by makers of the Phill) with a low-cost natural gas system that is also being developed thanks to an ARPA-E grant. The system chills the gas to a very low temperature (-50°C) to separate water from gas, which otherwise requires a complicated multistep process. GE hopes to reduce the cost of a home refueling station to less than $500.

As detailed in Navigant Research’s 2012 Light Duty Natural Gas Vehicles report, attempts at popularizing home refueling have failed in both Europe and North America due to the cost of the equipment and limited availability of vehicles. Nevertheless, sales of NGVs in the United States are expected to surpass 30,000 vehicles annually by 2019.

Annual Light Duty NGV Sales, North America: 2012-2019

 (Source: Navigant Research)

You might have guessed that the United States, Germany, or even Israel would be the proving ground for the latest innovations in electric vehicles (EVs), but, in fact, France is where the technology is becoming part of everyday driving.

Carshare programs featuring EVs have expanded rapidly on the streets of Paris.  The Autolib program is now nearly 2,000 cars strong, as both locals and tourists are becoming comfortable with electric drive and short term vehicle borrowing.

Recently, Autolib auto provider Bollore Group announced that it will begin retail sales of its EVs.  Bollore is offering the innovative business model of selling the vehicles and leasing the batteries separately, becoming the second French company (after Renault) to do so.  Battery leasing is more of a psychological marketing tool that splits up the upfront cost of the vehicle and the monthly operational cost (i.e., the battery lease) to make it easier to compare EVs with conventional cars and their fuel costs, but if it continues to be popular with customers, other companies may adopt the strategy.

Think Small – Really Small

Renault offers battery leasing on the tiny Twizy, which has been hailed as the best-selling EV in Europe.  Getting consumers to buy into a smaller-than-smart-car are feats of both engineering and marketing.  Renault and ally Nissan have developed the strongest EV maker partnership, and the tandem recently crossed the 70,000 mark in EV sales.

Renault, Peugeot Citroën, Nissan, and other players from across Europe will be presenting at the eCarTec Paris conference and trade fair on April 16-18, where I’m looking forward to learning more about other upcoming developments in e-mobility.

Another EV car share program will launch next year in Grenoble, France, where Toyota is partnering with the City of Grenoble, Grenoble-Alpes Métropole, Cité Lib, and EDF.  The “last-mile” project looks to use shared emissions-free cars to close the gaps around public transport while reducing the overall use of personally-owned vehicles.  The project will feature 70 EVs, including Toyota’s COMS vehicle and a new model based on the i-ROAD concept that recently debuted with much fanfare at the Geneva Motor Show.

Thinking small – in vehicle size, cost of personal transit, and emissions footprint – is catching on rapidly in haute couture Paris, and this trend is not likely to go out of fashion anytime soon.  The lessons learned in the marketing and logistics of EVs in France are becoming the blueprint for sustainable transportation everywhere.

More than 7.5 million plug-in electric vehicles (PEVs) will be sold between 2013 and 2020, according to Navigant Research forecasts.  All of those vehicles need to be charged somewhere, which is why the electric vehicle (EV) charging supply equipment market has attracted more than 120 companies, large and small.

These vendors would like each new PEV owner to buy a home charging unit.  Due to a variety of factors, though, the percentage of consumers that choose to do so in future years will shrink.  According to Navigant Research’s 2012 Electric Vehicle Charging Equipment report, the portion of PEV buyers that will purchase a residential charging station will fall from 63% in 2013 to 47% in 2020.  The primary factors influencing this decline include:

• Increasing sales of plug-in hybrid vehicles (PHEVs) with smaller battery packs that can be fully charged via a standard 110-volt outlet overnight
• A greater share of PEV owners living in multi-unit dwellings without dedicated parking spots
• Increased reliance on workplace and other public charging

As the relative sales of residential electric vehicle supply equipment (EVSE) go down, sales of commercial (non-residential) EVSE will by necessity rise.  The chart below illustrates that annual global sales of commercial EVSE will grow to more than 1.5 million units annually while residential EVSE sales will rise to less than 823,000 units.

Residential and Commercial EVSE Unit Sales, World Markets: 2013-2020

                                                                                                 (Source: Navigant Research)

To reach the forecast volume of residential EVSE sales, the cost of purchasing and installing a home charger must go down.  We are starting to see residential EVSE priced in the $600 to $650 range for basic units; the average selling price should fall below $500 by 2016.

Simplify, Please

EVSE maker AeroVironment is reducing the immediate financial impact of buying and installing a residential EVSE by working with dealers to bundle the EVSE cost into the vehicle’s purchase cost.  Through the program, dealers approve potential customers for financing above the price of the vehicle and the EVSE, warranty, and installation costs are added as a capital item.  AeroVironment is launching the program with dealers selling the Nissan LEAF and will expand it to dealers of other brands over time.  The company expects the installation to take 4 days or less, including the time for an inspection.  AeroVironment will also be busy installing residential EVSE in California.  The California Energy Commission recently granted AeroVironment $2 million to install 770 residential EVSEs across the state.

Depending on which state or city an EV owner resides, the permitting process can be a lengthy and onerous process for purchasers and electrical contractors.  According to Navigant Research’s recently published Electric Vehicle Supply Equipment Permitting report, some regions allow a permit to be filed online and offer same-day inspections.  In other places, differences in city and county rules can significantly slow the process.  Currently, very few states have attempted to standardize the process.  Yet, for sales of EVSE to grow as forecast, more states will have to simplify the process.