Navigant Research Blog

Texas a Lone Star in EV Charging Infrastructure

— January 25, 2012

In the 19th century, Texas became well known for its longhorns and the Alamo. The 20th century saw the oil boom, the Cowboys, and an infamous Dallas afternoon in November, 1963. In the 21st century, the state is becoming defined by its surprisingly progressive stand on energy through its wind farms and embracing of electric vehicles.

NRG Energy and its EV Services division have been leading the drive to bring clean power and transportation to Texas. The company now controls 450 megawatts of wind power in the state, and has executed the most aggressive rollout of EV infrastructure in the country.

These two developments are closely linked, according to Arun Banskota, the president of NRG EV Services, with whom I spoke at the recent Consumer Electronics Show in Las Vegas. NRG is investing $25 million in public EV charging equipment in Houston and the Dallas-Fort Worth area, Banskota said. That’s a hefty investment in a speculative market, especially for a publicly-traded company. Despite the area’s reputation as an oil town rich in land yachts, NRG is installing 50 “Freedom Stations” in Houston and 75 in DFW. Each of the charging stations has at least one DC fast charger and one Level 2 charging station, and they cost more than $100,000 per location.

The strategy appears to be working. According to Banskota, 80 percent of Nissan Leaf owners in the two regions have signed up for the EVGO program, a subscription service that enables charging at home or around town. NRG customers can specify only clean energy when they sign up.

Banskota said the company’s wind farms produce an abundance of power at night, when demand is low, which can result in spilling the excess power or negative pricing. Enter the EVs, which can charge at night and enable NRG to generate more revenue from its wind farms. Tying wind to EV charging in Texas mirrors similar endeavors in The Netherlands and Denmark, but is unique in the United States.

Texas is one of four states (along with Hawaii, California and Virginia) that currently do not regulate EV charging services, and NRG is likely to offer a similar service in one of the other states during 2012. NRG is looking to integrate EV charging into home energy management applications so that all of a home’s energy can be managed through a single application. The company also plans to introduce vehicle to grid (V2G) technology in several states. The company acquired V2G technology from the University of Delaware, but does not expect there to be much demand for using vehicles to provide power to the grid for three to five years.


Reviewing Our EV Predictions for 2011

— January 5, 2012

Plunging headlong into 2012, it’s a good time to pause and look back at our predictions for what Pike Research forecast would happen in the world of electric vehicles in 211.  Here’s a quick rundown of what Pike Research predicted for 2011 along with analysis of where we hit and missed:

1. The majority of people who drive a plug-in vehicle won’t own it.   

This prediction was on the money as GM and Nissan allocated a good percentage of their vehicles to dealers to make them available for test drives and to corporations for fleet use.  As predicted, car sharing programs are incorporating EVs into their fleets to enable many consumers to get their first taste of electric motoring, and we expect that trend to continue in 2012.

2. Automakers will get pushback from EV owners regarding the length of time it takes to fully charge a vehicle.

We haven’t heard as much negative feedback on charging times as we anticipated, partly due to the fact that most consumers are buying faster Level 2 charging equipment rather than plugging vehicles into a standard outlet.  However, Nissan decided that offering a 3.3-kilowatt onboard charger was a competitive disadvantage for the Leaf and therefore doubled the speed for the 2012 model.

3. Stop-start vehicles will arrive in the United States, albeit in small numbers

Sales of non-hybrid vehicles with stop-start technology were indeed minuscule in 2011.  During 2011 Ford and Volkswagen announced they were bringing stop-start to their North American lineups by 2012, and Wisconsin-based Johnson Controls announced it was investing more than half a billion dollars globally in stop-start battery manufacturing capacity.

4. Many EV charging stations will spend the majority of their time idle

We didn’t exactly go out on a limb with this prediction.  Despite the fact that public charging stations installations have lagged, in many cities there are more public chargers than EVs today.  We’ve heard many anecdotal stories of charging stations that are rarely if ever servicing vehicles and we can expect that to continue in 2012.

5. Fuel cell vehicles (FCVs) will be sold to fleets and consumers in small but growing numbers.

Automotive companies are continuing to slowly push forward towards commercialization of FCVs, but the quantities sold were very limited in 2011.  Based on the lack of availability of vehicles during the year, we sharply reduced our expected sales of FCV for 2011 to less than 700 globally – but that’s up from less than 200 the prior year.

6. Someone somewhere will have a bad EV experience and the media will overreact.

Fortunately for automakers the only negative EV experience that received significant media attention was at a NHTSA test facility.  The web and media did play up the event and some reports accused NHTSA of not responding quickly enough.  However, the coverage avoided overreaction.  Fisker also has an issue about potential fires due to coolant leakage within the battery pack, so we’ll see if the “EV batteries are a fire hazard” follow up stories continue.

7. The advanced battery category will heat up with M&A activity.

Way off.  There were no significant acquisitions or mergers during the year, and the biggest news was actually of an “anti-merger” – the dissolution of the Johnson Controls and Saft joint venture.  We expected some of the smaller companies to be acquired, but the independent battery startups managed to survive on their own despite sluggish EV sales.  Lithium-ion battery maker Boston Power received the most interest from investors as the company is shifting its focus, and its operations, to China.

8. Range anxiety” will prove to be more fiction than fact.

The accuracy of this prediction is hard to quantify, but the hypothesis that EVs would become stranded as drivers would not be able to cope with the shorter driving ranges appears to be false.  The media attention to range anxiety is slowly subsiding and should continue to fade from view in 2012.

9. The best-selling EVs won’t have four wheels.

This one was a gimme.  Global sales of electric bikes and motorcycles are continuing to grow rapidly, and are finally making inroads in the United States.  Two-wheeled electric vehicle sales far outpace all forms of hybrids and EVs, and with companies such as SRAM getting into the game, the gap will continue to widen.

10. The landscape for charging equipment will undergo a seismic shift as the category swiftly moves toward becoming a commodity market.

We were on target in predicting a seismic shift in EV charging equipment, but we picked the wrong one.  Prices didn’t fall as quickly as expected due to lower than expected sales of EVs and chargers.  But an emerging business model where third-party companies own and operate the charging equipment at no cost to the property owner has shaken up the industry.  These charging-as-a-service providers (350 Green, Car Charging Group, etc.) will help drive up volumes and drive down sales.

Overall, six of Pike Research’s 10 predictions mostly hit the mark, while four were off or missed entirely.  Undoubtedly we’ll do better than 60% for 2012.


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