Navigant Research Blog

Could On-Demand Mobility Finally Pave the Way for Vehicle-to-Grid Integration?

— September 27, 2016

EV RefuelingA decade ago, when discussion of modern plug-in electric vehicles (PEVs) was just getting ramped up again, one of the big potential selling points was the concept of vehicle-to-grid (V2G) integration. For a variety of reasons, it never quite caught on. However, as automakers, suppliers, and a variety of service providers have made a flurry of announcements about deploying autonomous vehicles into ride-hailing services in recent weeks, the time may also have arrived for V2G.

The idea behind V2G was to enable two-way communications and power delivery between PEVs and charging outlets. In addition to electricity flowing into the vehicles’ batteries to enable mobility, PEVs could also provide power back to the grid when needed to cover peak demand loads. A number of automakers have worked with utilities over the years to test out the concept, including Ford. When the automaker built a fleet of 20 prototype Escape plug-in hybrids for field testing in 2008, the cars were loaned out mostly to utilities to evaluate V2G.

Benefits of V2G

For customers, potential benefits of participating in a V2G system include possible rebates for contributing power back to the grid or discounts on charging during off-peak times. Utilities using V2G would have access to a buffer of power during load spikes that would reduce the need to build out extra generating capacity.

Unfortunately, sales of PEVs have turned out to be far lower than many projected a decade ago, with fewer than 120,000 sold in 2015. At the same time, there are more than 3,300 electric utilities in the United States, all with different (and incompatible) systems. With relatively few PEV owners, many with low-range battery EVs, there wasn’t a huge demand for V2G from consumers concerned about being left with insufficient range when they needed their vehicles.

Enter the era of autonomous on-demand mobility (AMOD). Navigant Research’s Transportation Outlook: 2025-2050 report projects that as the world becomes increasingly urbanized and crowded in the next 3 decades, there will be a push toward AMOD to solve the combined problems of air quality, safety, and urban congestion. Most if not all of the autonomous vehicles used to provide these services are also expected to be electric.

New Business Models

Large fleets of more standardized EVs should ease some of the technical issues involved with V2G and could provide the critical mass of fleet size needed to make the investment worthwhile for both utilities and fleet operators. By taking individual owners out of the equation, the fleet management system could cycle some percentage of these autonomous vehicles through V2G-enabled charging stations during the peak hours of electricity demand to provide the needed buffer.

In a world of dramatically reduced retail vehicle sales and the possibility of automakers running these mobility services, such a scheme could also be beneficial to today’s auto dealers. Those dealers could turn their focus to providing maintenance services for fleets, and while vehicles are onsite, they could participate in the V2G system. If utilities were to share part of the savings from not having to expand generation capacity with these mobility and service providers, it would contribute to a new revenue model. As the transportation ecosystem transforms in the coming decades, everyone in the supply chain will need to look at innovative approaches to building a sustainable business.


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.


Early Chevrolet Bolts in the Lyft Fleet Could Be Great Marketing Move

— August 16, 2016

Electric Vehicle 2For several months now, pre-production Chevrolet Bolt EVs have been rolling off General Motors’ (GM’s) Orion, Michigan assembly line, and the car is now only about 2 months from being ready for paying customers. However, many of the early Bolts won’t actually be going to retail customers. Instead, they will be offered up to Lyft drivers through the Express Drive rental program.

A Different Model

Given the way Tesla managed to rack up more than 373,000 pre-orders for its Model 3 at $1,000 each, one might wonder why GM isn’t taking a similar approach with the first affordable 200-mile electric car. Unlike the Silicon Valley upstart, GM cannot sell cars directly to consumers but must instead go through its franchised dealer network, so a similar pre-order process would be vastly more complicated, if not impossible.

Even if GM could execute such a program, it’s not at all clear it would work. Tesla and its CEO Elon Musk have built up a remarkable brand in less than a decade, and many of the pre-orders are coming from consumers that want to buy into that brand, just as they buy into Apple when they choose an iPhone over a comparable Android or Windows phone. For many very valid reasons, GM still isn’t taken seriously by many people when it comes to selling EVs, despite the positive reviews garnered by the Chevrolet Volt and Spark EVs.

GM does have a significant time advantage over Tesla and other automakers with the Bolt, and it appears to want to use that wisely with a different sort of marketing approach. Since modern plug-in EVs (PEVs) began hitting the streets 6 years ago, word of mouth and first-hand experience have proven to be very effective means of winning customers. When people actually experience a PEV, they are much more inclined to purchase one.

First-Hand Experience

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. When a customer goes into a showroom having already decided they want to buy a Bolt, they are much more likely to get one. Unfortunately, up until now, many traditional car dealers have tended to steer customers away from EVs and toward more profitable vehicles that they understand better like utility vehicles and trucks. That’s exactly why Tesla insists on selling direct to consumers through company-owned stores, which is not an option for GM or other incumbent OEMs.

If GM can sell consumers on the Bolt before they ever get to the dealership, they may have a much better chance of early success. The mandates to sell zero-emissions vehicles in California and other states will start to ramp up significantly from 2018 onward and the competition will be getting much tougher with the debut of the Model 3; the next-generation Nissan LEAF; and 200-mile EVs from Ford, Hyundai, and others expected.

Navigant Research’s Electric Vehicle Market Forecasts projects global PEV sales of approximately 2.9 million in 2024 with 462,000 in the United States. Through the first 7 months of 2016, Americans have purchased almost 78,500 PEVs, an increase of 20% over the same period in 2015. While Tesla’s financial stability remains very much in question in the coming years as it rapidly scales its production volumes, the company has demonstrated that it is a force to be reckoned with among consumers. GM and the other incumbent OEMs will have to get creative with ideas like the Bolt/Lyft rental program if they are going to both comply with regulatory mandates and maintain or grow their overall sales.


Two and Four-Wheel EV Sharing Programs Growing Rapidly

— August 8, 2016

E-BikeConsumers around the world are increasingly searching for new products and services that will enable improved mobility in and around city centers. A key challenge for cities in the 21st century is how larger numbers of people can be incentivized to move away from personal cars for motorized transportation and toward cleaner mobility devices and services.

Shared EV programs reduce vehicle emissions and noise while simultaneously improving mobility in cities—something personal EV ownership cannot achieve on its own. As the EV industry continues to evolve and help address some of these concerns, vendors are experimenting with shared EV programs that utilize an array of vehicle types.

Increasing Interest from Automakers

In early August, BMW announced that it will be expanding its ReachNow carsharing program to cover Portland, Oregon after successfully deploying the service in Seattle, Washington in early 2016. The service attracted more than 13,000 members within its first month of operation. BMW temporarily matched Car2Go’s per-minute prices and eliminated its membership fee for increased competitiveness. The automaker uses a mix of vehicles for the program that includes MINI Coopers and the all-electric BMW i3.

Additionally, Nissan is collaborating with San Francisco-based electric scooter-share company Scoot Networks to deploy a fleet of 10 mobility concept cars (the Renault Twizy) in the Bay Area. Beginning August 2, new market entrant Green Commuter is launching a carshare and vanpool fleet in Los Angeles using entirely all-electric Tesla Model X SUVs.

E-PTWs Continue Broad Implementation

In the electric power two-wheel vehicle (e-PTW) market, Bosch is launching an electric scooter (e-scooter) sharing program in Berlin, Germany. The company is using 200 e-scooters from Taiwanese-based company Gogoro, which implemented a battery swapping network business model for its e-scooter deployment in Taipei. The battery swapping model from Gogoro is being adapted to be more of a traditional carshare model in Germany. E-scooter sharing services are expanding quickly across Europe, with iconic cities such as Paris, France and Barcelona, Spain having already implemented similar programs.

Globally, an increasing number of bicycle sharing programs have also been turning toward electric-powered technology as of late. Most recently, it was announced that the largest electric bicycle (e-bike) share program in North America (roughly 200 e-bikes) will be implemented in Baltimore, Maryland in the fall of 2016.

Whether it’s on two wheels or four, the plethora of new on-demand mobility programs sprouting up across the globe indicates that transportation is moving toward a future that is both shared and electric. Vendors looking to capitalize on this rapidly evolving business will need to offer high levels of vehicle accessibility, affordable hourly usage rates, and differentiating product options. For more information on electric mobility devices and their impact on cities, look out for Navigant Research’s upcoming Electric Mobility in Smart Cities report.


Blog Articles

Most Recent

By Date


Clean Transportation, Electric Vehicles, Finance & Investing, Policy & Regulation, Renewable Energy, Smart Energy Practice, Smart Energy Program, Smart Transportation Program, Transportation Efficiencies, Utility Innovations

By Author

{"userID":"","pageName":"Electric Vehicles","path":"\/tag\/electric-vehicles","date":"10\/20\/2016"}