Navigant Research Blog

Consumer Survey Indicates Core Audience Needs Expansion

— December 12, 2017

Automakers are introducing new EV models that will appeal to a broader audience of car buyers. Yet, understanding the demographics of consumers with the greatest potential to buy plug-in EVs (PEVs) remains a formidable industry challenge. Navigant Research conducted a survey to understand consumer preferences and demographics when considering a vehicle purchase. Overall, survey results indicated that electric powered vehicles were the first choice of vehicle for their next purchase for 14% of respondents, while 74% indicated gasoline powered as their first choice. When combined, diesel, hydrogen, natural gas, and propane autogas powered vehicles accounted for 12% of respondent’s first type fuel choice.

First Choice Fuel Type for Next Vehicle Purchase

Source: Navigant Research

The gap between electric and gasoline powered vehicles is large for consumers considering a vehicle purchase, but the number considering an EV jumps to 58% of respondents when their second and third choice of fuel types are considered. So, what can the EV industry do to convince that 58% to prioritize emissions-free driving?

To best distinguish who may purchase a PEV, results of respondents who were favorable toward PEVs (ranked electric as their first fuel type preference) and who owned a PEV were compared to focus on any key differences between the two groups. According to the survey, an average PEV owner is likely to be under 40, live in a single-family home, have a 4-year college degree, and make above $50,000 in yearly income.

Consumers with access to parking at their residence are more likely to purchase PEVs due to the ease of access to charging—having an electrical outlet near the dedicated parking increases this likelihood. Therefore, consumers with garages, largely found in single-family homes, are the most likely to own a PEV. A lack of home charging requires a consumer to rely on public charging infrastructure, which in many areas is still insufficient, and discourages adoption.

Observed Consumer Trends

Overall, the demographics of PEV owners and those interested in purchasing a PEV were similar, but two differences stood out. Younger age groups are more likely to own a PEV and be favorable toward a PEV as their next vehicle purchase. There is also a widening gap in the older 45-64 demographic between those who are favorable toward PEVs and those who own them. The 45- to 64-year-old demographic made up 10% of the PEV ownership population, but 21% of those who were likely to purchase a PEV. This data points to a demographic that has unrealized potential for PEV adoption.

The second trend of significance is the disparity between those living in single-family homes and those in multi-family units, such as apartments, lofts, and townhouses. Lack of access to charging is a major barrier to PEV adoption, and those who do not live in single-family homes are less likely to own or be likely to purchase a PEV, as shown in the chart below. No major differences in housing types stand out between the two groups, suggesting that more charging options are necessary to entice multi-family dwellings to buy electric.

EV Consumer Survey: Housing Type

Source: Navigant Research

The Road Ahead

While the consumer survey shows many with positive attitudes toward PEVs, market challenges need to continue to be addressed to make an all-electric transportation future possible. The announcement of longer-range and lower priced battery EV models, charging infrastructure investments, and purchasing incentives indicate that PEVs are here to stay. Market stakeholders should take advantage of this upward momentum to target a wider audience of individuals purchasing vehicles, and promote PEVs to those outside of the current core target demographic.

For more information, see the recent Navigant Research report, Market Data: Electric Vehicle Charging Equipment.

 

The Peer-to-Peer Future of EV Charging

— November 1, 2017

In cities where EV drivers believe they have limited access to publicly available charging infrastructure, the resulting range anxiety hinders plug-in EV (PEV) adoption rates. VW’s subsidiary, Electrify America, required investment in infrastructure because of the dieselgate settlement, which should help reduce range anxiety in many areas. A variety of new technologies are bringing new value to the existing EV charging infrastructure, a trend that could also help ease range anxiety and grow the EV market.

Communication Standards

Many standards from organizations such as the Society of Automotive Engineers have been established for communications between EVs and EV supply equipment (EVSE). Of note is International Standards Organization (ISO) 15118, which specifies a common understanding of all processes between an EV and EVSE. Specifically, ISO 15118 standardizes the communications between the EV communication controller and the supply equipment communication controller. The communication standards enable everything from bidirectional charging to transaction services. Vehicles that comply with ISO 15118 will allow for automatic owner account authentication at charging points that both prevents data manipulation and initiates seamless smart charging of EVs. The establishment of this standard enables bidirectional charging, which can provide utilities with grid services and creates the groundwork for the buying and selling of electricity between the grid, EVSE, and EVs.

RFID Technology

South Korea has been aggressively trying to support and expand its EV fleet. In 2015, the City of Seoul partnered with company Power Cube to give out special electric charger cables to enable drivers to recharge their vehicles at 100,000 locations with standard outlets. These cables are equipped with RFID readers that scan an RFID tag attached to the power outlet to be used. Power Cube then processes the transaction by transmitting the driver’s identity, time, place, and electricity purchased via a 3G wireless module included in the charging cable to Power Cube. Power Cube bills the user later, and then pays the electricity provider.

Seoul hoped that the giveaway would incentivize more private EV ownership; as of the program launch, the majority of EVs in Seoul were owned by public sector entities. It intended to give out all 100,000 cables by 2018. Each cable costs 1 million won (about $917) and has a charge capacity at 3.3 kW. While there has been no coverage of the program since its inception, there continues to be a market opportunity for transaction authentication in the EV charging space, with the City of Busan’s launch of a similar program in 2016.

Blockchain Technology

Blockchain could offer a low cost and reliable way for transactions to be recorded and validated across a distributed network with no central point of authority. It also removes some of the technological barriers associated with dynamic and wireless charging; these services can use blockchain technology to record and validate the purchase of electricity from these chargers automatically, without driver intervention.

In Germany, blockchain technology can be used to authenticate and manage the billing process for EV charging stations. For example, Car eWallet will enable a driver’s car to pay for charging, with no need for pulling out a credit card.

Share&Charge, another e-mobility service, has completed its pilot in Germany and is partnering with eMotorWerks to bring its services to California. Participation in the pilot will be based on a first come, first serve basis. Share&Charge uses the Ethereum blockchain because of its support for smart contracts. It creates a token on this chain and users provide/receive payment in these tokens that then can be redeemed for traditional currencies.

Although the use of these services for widespread dynamic charging services is still a ways down the road, these EV-focused transactional services could expand publicly available charging infrastructure by enabling point-to-point sharing of private EV charging stations. They could also enable future applications such as toll payments and carsharing services.

Navigant Research’s upcoming report, Wireless EV Charging, focuses on how wireless charging technology has become increasingly more efficient over the past couple years. A growing number of pilot programs and applications are popping up around the world. As these actors move forward with expanding charging infrastructure, developing technologies may help process and authenticate future transactions.

 

Denver RTD Hops on the Electric Bus Line

— October 3, 2017

Commitments to electric buses (e-buses) are ramping up in the United States. Several agencies are bringing in fleets of a few dozen to over 100 e-buses over the next few years. One such agency, the Regional Transportation District (RTD) of Denver, is deploying 36 e-buses from Chinese company BYD Motors, Inc. Among the biggest drivers for the interest in e-buses is their increased efficiency. These BYD buses are expected to get 12 MPGe to 14 MPGe, significantly improving on the 3-4 miles per gallon of diesel buses. E-buses also have reduced maintenance costs. RTD says the biggest maintenance issue with these buses are the doors.

BYD Bus Details

Each vehicle costs $750,000; this includes the price of the battery chargers and a lifetime warranty for the lithium iron phosphate batteries. Lithium iron phosphate batteries were chosen for two reasons: they are designed to prevent thermal runaway and the batteries are air-cooled to maintain a narrow range of temperatures.

The buses have a maximum battery capacity of 292 kWh that requires 3-4 hours of charging time, giving them 12-14 hours of continuous use before requiring a charge. This has been demonstrated to provide 200 miles of range at 30-40 mph. However, in operation, the range is closer to 80 miles because buses make frequent stops during the 1.3-mile route.

Incorporating E-Buses into the Fleet

Three-phase alternating current (AC) fast-charging stations were installed for the fleet. The AC-to-direct current (DC) converter is onboard the bus. The lack of fast-charging standards in the United States for heavy duty vehicle e-buses is a challenge, as buses must be coupled with proprietary standards. That being the case, RTD has opted to use European standards. The construction of the charging station cost $432,000; this figure does not include the cost of the battery charging equipment.

Because the new fleet is quieter than traditional buses, they have been outfitted with noise generators (that fluctuates pitch with the vehicle’s speed) to notify pedestrians of their presence when operating along the pedestrian-oriented 16th Street Mall. The buses were ordered in 2015 and manufactured in China; final assembly will take place in Lancaster, California to meet Buy America requirements. As of August 2017, 34 of 36 buses had been delivered. RTD has indicated it hopes to incorporate e-buses in regular operations in the future.

Although the e-bus rollout has been successful to date, RTD reports that few agencies have reached out for advice about implementing their own e-bus fleets. Nevertheless, transit agencies across the United States are taking a good look at e-buses.

Other Market Drivers

While lower operations and maintenance costs are already market drivers, there are other market drivers that will become more prominent and increase the desire for e-bus adoption. Dynamic charging systems would enable buses to carry smaller batteries, decreasing costs. In addition, vehicle automation is well-suited for EVs on fixed routes, including buses. Other market drivers include increasing cities’ targets for air quality and climate change concerns and increased demand for vehicles with a reduced carbon footprint. According to Navigant Research’s recent Market Data: Electric Drive Buses report, electric powertrain buses (including all types of hybrids) are expected to grow from approximately 21% of the total bus market in 2017 to around 22% in 2027.

 

Does Yamaha’s Entry into the US E-Bike Market Signal a Turning Point?

— October 3, 2017

Electric bicycles (e-bikes) continue to be the highest selling EVs on the planet. Navigant Research estimates that a total of nearly 35 million units will be sold globally in 2017. However, the US market has struggled mightily to keep up with its successful European and Asia Pacific counterparts.

Market Percentages

In 2016, just under 1% of total bicycle sales in the United States were attributed to e-bikes—compared to 15.7% in Germany and 24.2% in the Netherlands.

E-Bike Market Share of Total Bicycle Market by Country, Select Markets: 2016-2025

(Source: Navigant Research)

Navigant Research projects that e-bike market share will remain relatively low over the 10-year forecast period (below 4%) in the United States since the country has:

  • Lower gasoline prices compared to most other world regions
  • Poor bicycling infrastructure in many major cities, which are primarily designed for cars
  • Low consumer awareness and relatively high levels of opposition from independent bicycle distributors toward e-bike technology (compared to other world regions)

Turning Point?

In what may be a turning point for the US e-bike industry, Yamaha announced it will begin selling its branded e-bikes through US dealers in 2018. The company has been refining its production of e-bikes for decades, with over 2 million sales in Japan since 1993. The major new US market entrant boasts widespread brand awareness, an expansive dealer network with hundreds of locations in the United States, and large R&D budgets unavailable to most North American e-bike vendors.

Yamaha has shown four models thus far, including the UrbanRush, YDX-TORC, CrossCore, and CrossConnect—spanning racing, mountain, and street cruiser styles.

Impact on the Market

While Yamaha is somewhat late to the manufacturer e-bike party in the United States, the company’s entry is likely to present some challenges for other manufacturers and dealers. In the short term, Yamaha will primarily capture a portion of its sales—with some consumers opting for a trusted brand with hundreds of dealers that are available to market, sell, and service their e-bikes.

However, over the long term, Yamaha’s presence should help propel consumer awareness for e-bikes in the United States more broadly—which will be positive for all vendors left in the market. Similar to Elon Musk urging major automakers to sell more competitive EVs, a bigger e-bike market will increase overall revenue opportunities. Smaller companies would be wise to differentiate their e-bike products from Yamaha’s offerings to avoid losing market share to the more powerful marketing competitor.

 

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