Navigant Research Blog

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.

 

Fast EV Charging Ready to Accelerate

— August 3, 2016

EV RefuelingBattery electric vehicles (BEVs) are getting better with each model announced by automakers, with greater driving ranges, better styling, and more features, all at lower costs. The 2016 sales figures indicate that American buyers increasingly prefer going all-electric rather than plug-in hybrid with a gasoline backup.

By 2018, we’ll have a handful of relatively affordable 200+ mile BEVs available from a variety of automakers, which will require not only more commercial charging locations, but also faster chargers to cut down the time needed to fully recharge the bigger batteries that these vehicles utilize.

Navigant Research’s recently published DC Charging Map for the United States report projects that adding a network of 408 fast chargers could enable drivers to get around and between the top 100 U.S. metropolitan statistical areas. Plug-in hybrids, with much smaller battery packs, aren’t expected to support these higher charging levels.

DC Charging Stations for Long-Distance BEV Demand, Top 100 Metropolitan Statistical Areas

DC Charging Map

 (Sources: Navigant Research, Esri, U.S. Department of Energy, U.S. Federal Highway Administration)

These higher power stations (greater than 100 kW, compared to most non-Tesla charging stations that max out at 50 kW) would help encourage greater EV adoption by giving drivers the freedom to roam across their state or the entire country knowing that a charging station is within reach.

The federal government is doubling down on its bet on EVs through a slew of initiatives announced in July that support EV charging with the hope of increasing EV sales. The White House, in conjunction with the U.S. Departments of Energy and Transportation and other agencies, announced the availability of up to $4.5 billion in loan guarantees for companies to invest in EV charging infrastructure. Government agencies will also be working together to get more EVs into their fleets through combined purchases.

Speeding Up the Charge

In looking to get charge times closer to 10 minutes for BEVs, the U.S. Department of Energy will fund research into the feasibility of 350 kW charging and is inviting the private sector to assist. In theory, being able to recharge a BEV at near the time it takes to fill an SUV with gas would remove one barrier for time-conscious consumers. However, the high power has implications for safety (higher voltage and amperage), heat generation (potential to melt connectors), the lifecycle of the receiving batteries, and the site host.

Many utilities levy demand charges for peak power delivered over a specified threshold during the month that can cost up to thousands of dollars in recurring fees. Utilities are beginning to address the cost issue by developing new rate structures that consider fast charging, or by considering operating fast charging equipment themselves.

Seattle City Light will install and operate 20 fast charging stations to get a better understanding of the impacts of EVs on its grid. Also in Washington state, utility Avista will install seven direct current (DC) fast chargers with energy services company Greenlots as part of a larger project to evaluate EVs in demand response and smart charging programs.

And if 350 kW EV charging isn’t fast enough, electric buses in Geneva, Switzerland will soon be charging at a whopping 600 kW. ABB will be using stationary batteries to help limit the impact of fast charging 12 buses. In the world of EV charging, “fast” is rapidly becoming a relative term.

 

Washington Utility Tests New Path to Integrating EVs

— July 27, 2016

EV RefuelingEastern Washington isn’t an especially well-known plug-in electric vehicle (PEV) market, given most PEV sales in the state are concentrated in Seattle and along the Pacific coast. However, the utility serving a large portion of eastern Washington, Avista, has made an ambitious and refreshingly unique move in preparation for the emerging technology. On July 27, Avista announced it will develop a pilot to demonstrate vehicle-grid integration (VGI) technologies in partnership with Greenlots across 200 Level 2 chargers and seven direct current (DC) fast chargers at residential, workplace, and public charging sites.

The purpose of the pilot is to determine how much PEV load can be shifted from peak load times to off-peak times without using time-of-use (TOU) rates. The hope is that the pilot will show that PEV load may be managed in a manner that reduces grid operating costs and increases grid reliability, thus optimizing potential benefits of PEVs to both utilities and ratepayers.

A Unique Approach

What makes Avista’s pilot unique is its holistic approach encompassing all forms of charging and the use of more nuanced demand-side management mechanisms than TOU rates. Including residential, workplace, and public charging within the pilot enables Avista to collect data on the uninfluenced charging behavior of program participants and then assess how demand response (DR) signals sent to PEV owners changes charging behavior across the charging network. The use of DR signals rather than TOU rates prevents new peak creation at the beginning of off-peak periods and maintains higher levels of revenue per kWh consumed by PEVs than would a TOU rate while still providing energy savings to PEV owners.

The pilot kicks off this August and will run for 2 years. Single-family and multi-unit dwelling residences will have 120 chargers installed, while the remaining 80 chargers will be placed at select workplaces or public locations alongside the seven aforementioned DC fast chargers. The chargers will be integrated into Greenlots’ SKY charge management platform, which is also being leveraged in a similar pilot for Southern California Edison that looks specifically at workplace charging.

Fast Growing Customer Base

Avista’s pilot comes in response to the strong possibility that its PEV population is going to increase dramatically. Washington’s Electric Vehicle Action Plan seeks to ensure 50,000 PEVs are on the state’s roads by 2020, up from the 12,000 registered in early 2015. As of the writing of the action plan, only a few hundred of these registrations were in counties served by Avista. Yet, the market for PEVs is anticipated to increase significantly in the next 3 years as 200-mile range battery EVs (BEVs) at under $40,000 are introduced.

On behalf of mass market long-range BEVs, Navigant Research forecasts in its Electric Vehicle Geographic Forecasts report that Washington will meet its 2020 goal sometime in 2018, with sales expanding into suburban and rural markets. If the PEV market lives up to this forecast, then PEV populations in eastern Washington counties are expected to be at least 7 times greater than current levels by the end of 2020.

PEVs in Use in Eastern Washington Counties: 2016-2020

Washington PEV

(Source: Navigant Research)

 

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