Navigant Research Blog

Uber Expanding into Electric and Autonomous Vehicles

— April 7, 2015

Since Uber’s creation in 2009, the adoption of the company’s mobile app-based transportation service has exploded and the service is now available in 56 countries and over 200 cities worldwide. In fact, it was recently reported that there are now more Uber cars than yellow cabs in New York City. With nearly $3 billion in total funding raised by 2015, Uber is looking to expand its business into the growing electric vehicle (EV) and autonomous vehicle markets.

Offering local customers emissions-free transportation options, Uber has partnered with BYD to provide electric e6 taxis in Chicago. Uber drivers have the option to rent the e6 taxis from the Green Wheels USA dealership for $200 a week, and Uber customers will be able to choose an EV through the smartphone app when booking a vehicle. This new option gives users added flexibility in their riding choices, and more cities around the United States can expect Uber EVs as an option in the near term.

So Long, Driver

Likely to be more disruptive than the introduction of EVs, autonomous vehicles could have a much more notable impact on Uber’s business. In February 2015, Uber announced that it is setting up a laboratory in Pittsburgh to develop self-driving technology. In partnership with Carnegie Mellon University, the company will reportedly be developing the core autonomous technology, the vehicles, and associated infrastructure at the Pittsburgh facility. Uber CEO Travis Kalanick has stated in the past that he would gladly replace human drivers with a self-driving fleet of vehicles, as Uber drivers reportedly take home about 75% of every fare.

Beyond massive savings on costs for Uber, and potentially its customers, autonomous vehicles would make Uber a much safer service—not just in terms of smoother running vehicles with (likely) fewer accidents, but also in terms of the well-being of the passengers. Uber has come under intense scrutiny as of late, as accusations of assaults on passengers by Uber drivers have come from numerous customers from a variety of countries. While Uber does conduct background checks on its drivers, prosecutors in California are suing the company for alleged exaggeration regarding the rigor of its background checks.

Navigant Research’s report, Autonomous Vehicles, projects that globally, close to half of all new vehicles sold in 2035 will have some form of autonomous driving capability installed. Uber may have autonomous vehicles on the road even sooner, which would go a long way toward ensuring safer driving and safer environments for customers who would no longer have to consider the possibility of a dangerous driver.

 

E-Motorcycles and E-Scooters Primed for Acceleration

— March 17, 2015

Innovative product offerings, large new market entrants, and decreasing battery prices are all contributing to an increasingly positive outlook for the electric power two-wheel vehicle industry, which includes electric scooters (e-scooters) and electric motorcycles (e-motorcycles).

An influx of new product offerings and services in these markets is expanding the product options for consumers, offering legitimate alternatives to car ownership, and appealing to new, untapped customer bases. These products and services include fold-up e-scooters, hydrogen fuel cell scooters, e-scooter sharing programs (Scoot Networks), e-scooter battery swapping networks (Gogoro), and ultra-lightweight e-motorcycles.

Warming Up

In the e-motorcycle industry, several large manufacturers traditionally focused on gasoline-powered motorcycles are entering the market and providing new capabilities. These large companies bring brand recognition, extensive dealer networks, industry credibility, and large marketing and R&D budgets. It’s difficult to convince consumers to buy unknown brands in a new market, especially at higher price points compared to internal combustion engine (ICE) motorcycles.

With Polaris Industries acquiring Brammo in early 2015, Yamaha announcing its intention to enter the market in 2016, and Harley-Davidson expected to release its LiveWire product around the 2018 timeframe, the e-motorcycle industry is poised to undergo significant growth and significantly increase consumer awareness and recognition over the coming years. Lithium ion (Li-ion) battery units that would have cost more than $1,000 per kilowatt-hour (kWh) just a few years ago can now be had for about one-third of the price, and these costs are expected to continue to decline over the coming years.

According to Navigant Research’s recently published report, Electric Motorcycles and Scooters, worldwide sales of e-motorcycles and e-scooters are expected to grow from 5.2 million units in 2015 to just under 6 million units by 2024. Due to the new and expected market entries of Polaris Industries, Yamaha, and Harley-Davidson into the North American and European markets, high-powered e-motorcycles (more than 30 kW/40 hp peak) are expected to achieve by far the largest growth of any segment in this market, growing at a compound annual rate of 35.2% between 2015 and 2024.

E-Scooter and E-Motorcycle Sales by Type, World Markets: 2015-2024

(Source: Navigant Research)

 

(Geo)Engineering a Climate Change Solution

— March 5, 2015

Climate engineering, or geoengineering, refers to the deliberate and large-scale intervention in the Earth’s climatic systems with the goal of reducing the effects of global warming. While I would argue that mitigation and fossil-fuel emissions reductions should be the primary course of action on climate change, it is also undeniable that achieving concerted and coordinated political action has been monumentally difficult. As outlandish as some geoengineering proposals may sound, changing the behavior of billions of people and overcoming the basic political and industrial challenges of drastically reducing fossil fuel consumption may prove to be even more difficult.

Although significant progress has certainly been made globally in the areas of renewable energy generation, energy efficiency, and improving transportation efficiencies, the international community as a whole has thus far failed to design and agree upon policies that will drastically reduce the amount of CO2 released into the atmosphere in any climate-impactful way.

More Research Needed

This lack of progress on climate change through emissions reductions leads to the conclusion that other approaches should at least be considered and adequately studied to determine efficacy. In early February, a panel of scientists at the National Academy of Sciences released a report arguing that more research on geoengineering needs to be conducted in order to better understand the associated risks and potential benefits. President Obama’s science advisor also publicly backed the initiative in 2010.

There are at least seven geoengineering proposals that are currently being hypothesized as potential climate intervention strategies:

  • Spraying sulfate aerosols into the atmosphere: While risky due to possible ozone layer deterioration, the idea is to reduce the Earth’s absorption of sunlight (much like ash from volcano eruptions).
  • Trapping CO2 in carbon scrubbers: Researchers at Columbia University are working on a carbon scrubber that would remove 1 ton of CO2 from the atmosphere per day. Projected to be available in 2 years, such scrubbers would cost $200,000 apiece, according to the Columbia scientists.
  • Fertilizing trees with nitrogen: This would theoretically increase the trees’ ability to absorb CO2.
  • Aerial Reforestation: Battling rampant deforestation, and the resultant loss of CO2 absorption capacity, airplanes would drop tree seedlings encased in biodegradable containers over large areas of land.
  • Adding powered limestone to the oceans: Such schemes would attempt to reduce ocean acidity and increase carbon sequestration.
  • Ocean iron fertilization: This process would increase the rate of photosynthesis in phyto-plankton in order to absorb more CO2.
  • Enriching soils with biochar: Biochar, a fine-grated charcoal that is highly resistant to decomposition, would hypothetically enrich soils and soak up excess CO2.

This is by no means an exhaustive list of proposals; reflecting sunlight back into space and many other ideas exist. However, it should be noted that there are also many legitimate controversies around geoengineering proposals. Spraying sulfate aerosols into the atmosphere, for example, could degrade the ozone layer. Many of the proposals are too expensive, and most offer an imperfect fix–even if the global average temperature of the earth is reduced, nothing would be done to stop the other consequences of fossil fuel burning such as ocean acidification and air pollution.

While no one knows for sure which  geoengineering proposals offer the most promise, I would argue that they should at least be more openly debated and further researched as a possible climate solution (particularly for a crisis situation where the reduction in CO2 needs to be immediate). Unfortunately, the international community has thus far made very little progress in addressing one of the world’s most serious problems, and in the case of climate change, we are in no position to reject promising ideas out of hand.

 

Kansas City Takes a Flyer on EV Chargers

— February 11, 2015

Kansas City Power & Light (KCP&L), announced in late January that it will install 1,000 public EV charging stations in Kansas City, creating a dramatic increase from the 40 stations that are currently available. The stations are expected to be installed by the end of summer 2015.

According to Navigant Research’s report, Electric Vehicle Geographic Forecasts, there were only 2,687 EVs on the road in the entire state of Missouri at the end of 2014. The report also projects sales of 1,615 plug-in electric vehicles (PEVs) for the state of Missouri in 2015.

With such low PEV numbers in the state thus far, perhaps this move by KCP&L is an effort to encourage more PEV adopters in the Kansas City area. Even California, the largest adopter of EVs in the country, has fewer than 2,000 public EV charging stations. And Missouri, unlike California and other states with high PEV penetration rates, has no tax incentives for EV buyers.

Risky Business

The business proposition for the utility doesn’t look good, either. The network of chargers is estimated to cost $20 million, and the network will be free to the public for the first 2 years of operation. How many years will it take to recoup that investment through added sales of electricity and usage fees once implemented?  Perhaps KCP&L is following the path of California utilities that see significant value in controlling the flow of electricity and re-selling it through EV charging stations. Several California utility companies successfully petitioned the California Public Utilities Commission (CPUC) to allow utilities in the state to re-sell electricity via EV charging stations.

Nevertheless, California has far more EV users and according to PlugInsights, 81% of EV charging occurs at users’ homes, with just 10% of charging occurring at public stations (the remaining is mostly attributed to private charging stations and at workplaces). Thus, even if more Missourians do adopt EVs, the majority will likely be charging their vehicles at home.

Real Impacts

If KCP&L isn’t intending to make money from this initiative, but instead trying to reduce emissions, it would be better suited to convert the state’s existing power plants from coal to natural gas. This would be more cost effective and have a far more significant impact on emissions and air quality. Physically, it does not require much in the way of new equipment to convert a coal plant to run on natural gas. Missouri has one of the dirtiest electricity grids in the country, with coal accounting for a whopping 83% of the state’s electricity generation in 2013.

The map below, from the Union of Concerned Scientists’ report, State of Charge, shows that the gasoline vehicle mile per gallon (mpg) equivalent of an electric car is just 35 mpg in the SPNO region, where Missouri is located. This means that a gasoline car with 35 mpg, such as a Volkswagen Passat, would have the same impact on the environment as an electric car in Missouri (due to the high coal usage in the state). While KCP&L is moving toward removing a few coal power plants from its generation portfolio, an overhaul of the company’s electricity generation sources would have a much bigger impact on emissions reductions than building 1,000 EV charging stations that may or may not be used by consumers.

Electric Vehicle Global Warming Pollution Ratings and Gasoline Vehicle Emissions

(Source: Union of Concerned Scientists)

 

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