Navigant Research Blog

California Utilities Look to Manage EV Charging

— March 27, 2015

Through multiple programs aimed at both supply and demand, California has developed the most vibrant market for plug-in electric vehicles (PEVs) in the world. According to the forthcoming update of Navigant Research’s report, Electric Vehicle Geographic Forecasts, the total number of light duty PEVs in California is expected to surpass 140,000 by the end of this year and 1.5 million by 2023. The state’s electric power sector is taking note because the speedy PEV market growth may pose problems if PEV charging isn’t managed well.

The most likely problems will occur at the residential transformer, where a cluster of PEVs may outstrip a transformer’s capacity, requiring costly upgrades and/or repairs. To date, this issue has been fairly minor, with California’s three major utilities (Pacific Gas and Electric [PG&E], Southern California Edison [SCE], and San Diego Gas & Electric [SDG&E]) reporting that, of the 97,350 PEV customers in their combined service territories from July 2011 to October 2014, there have only been 126 PEV-related infrastructure upgrades.

Getting Worse

These problems are likely to worsen with the aforementioned 10-fold increase in PEVs in under 10 years. Looking ahead, the California Public Utilities Commission (CPUC) launched a PEV submetering pilot in September 2014 through the big utilities. The pilot is designed to lower energy costs for PEV owners through time-of-use (TOU) rates that incentivize off-peak charging and measure their energy consumption for vehicle charging apart from their overall energy consumption. By separating PEV charging, utilities could assess how best to influence PEV charging beyond TOU rates to avoid infrastructure upgrades.

Although TOU rates are effective at managing demand for a more efficient grid at the generation and transmission level, their effect on localized demand issues like transformer capacity is limited. Automated charging of PEVs based on TOU rates essentially creates a new spike in demand at the beginning of the off-peak period. This spike looks marginal at the grid level, but can be fairly drastic at the transformer feeding a cluster of PEVs.

Leading Edge

Thus, utilities, electric vehicle supply equipment (EVSE) manufacturers, and EVSE service providers are looking to create more dynamic and advanced PEV charging schemes to manage charging at all levels of the grid. Greenlots, for example, recently announced its partnership with EVSE LLC to demonstrate the company’s SKY Smart Charging system in 80 Level 2 workplace chargers at SCE facilities. The SCE project will examine how PEV owners respond to demand response events and dynamic pricing schemes for a number of purposes, including mitigating local transformer issues.

Outside of California, other PEV markets are expanding, too; utilities in these areas will need to begin testing and implementing similar technologies and programs soon. Companies competing for utility services in California now will be well served by expansion elsewhere and likely represent the leading edge of charging services development for years to come.

 

Making Sense of the Apple iCar

— March 23, 2015

Since early February, evidence has been piling up suggesting that Apple may develop an electric car to launch by 2020. Apple has yet to verify that it’s developing a car, but that has not stopped many from speculating what the Apple car might look like or how Apple might enter the automotive industry. Dan Akerson, the former CEO of General Motors (GM), weighed in on the subject, saying that instead of building cars, Apple should team up with automakers to develop operating and entertainment systems for vehicles.

As Akerson pointed out, the auto industry is dealing with heightened regulatory and safety standards alongside low profit margins in comparison to Apple’s other product lines, creating a grim outlook for any company looking to enter the auto industry. It should be noted, though, that Apple would be entering an auto industry that is significantly different than the one Akerson has known.

Beyond ICEs

For the last 100 years, the light duty vehicle hasn’t evolved much beyond the conventional internal combustion engine (ICE) with four wheels and multiple cup holders. To be sure, the established auto industry has made drastic improvements to this basic concept. But in the next 100 years, vehicles are going to look a whole lot more like smartphones, a category in which Apple has some expertise.

While plug-in electric vehicles (PEVs) represent only a small fraction of the vehicle market now, their numbers are growing quickly and will continue to increase, as electricity is clean and cheap and batteries are getting cheaper and better. Already, automakers are displaying fully electric vehicles for the mass market with 200+ mile ranges, to be sold within the next 3 years. Much of the established auto industry’s expertise and capabilities still center around making cars with ICEs. When that technology becomes obsolete, space will open for new competitors to emerge, such as Tesla and, yes, Apple.

Connected Future

Even more quickly than vehicles are becoming electrified, they’re becoming connected. A white paper published by the Continental Automated Buildings Association (CABA) outlines the advantages of connectivity for motorists, primarily around safety and autonomous driving. Additionally, vehicle connectivity can lower the cost of electricity for PEV owners and help create a more efficient and cleaner grid infrastructure. These developments are detailed in Navigant Research’s new report, Vehicle Grid Integration.

Though Apple would encounter struggles entering the established auto industry, the war chest Apple has should be more than enough to overcome those struggles. Further, there is, arguably, no other non-automotive company better positioned to provide an electric/connected vehicle than Apple. In fact, if Apple isn’t planning to develop a car, it could be missing out on a big opportunity to enter the fastest growing segment of one of the largest global markets.

 

Volvo Pioneers Autonomous Vehicles

— March 17, 2015

Volvo has long sold cars that are considered among the safest in the world. Since the 1940s, Volvo has been at the forefront of introducing innovations that include laminated safety glass, crush zones, three-point seatbelts, and more recently, pedestrian detection with automatic braking. As Volvo prepares to launch its first all-new production vehicle since being acquired by China’s Geely Group, the company has announced plans for a test of highly automated vehicles on public roads near its Gothenburg, Sweden headquarters.

Self-Driving Cars a Reality

Self-driving vehicles from automakers, suppliers, and technology companies have become commonplace recently on Silicon Valley roads. However, all of those vehicles are under the control of the engineers trying to refine the complex control software required to make them work reliably. Beginning in 2017, Volvo plans to put a fleet of 100 autopilot-equipped XC90 SUVs into the hands of regular Swedish drivers.

Reiterating its oft-stated goal of achieving sustainable mobility and a crash-free future, Volvo has worked to design the autopilot system it is building into the XC90 to be robust enough to let ordinary drivers give  complete control.

“Making this complex system 99% reliable is not good enough, you need to get much closer to 100% before you can let self-driving cars mix with other road users in real-life traffic,” Erik Coelingh, technical specialist at Volvo, told me. With that in mind, Volvo has recognized the limitations of current technology, so the XC90 will be equipped with a combined array of radar, lidar, ultrasonic, and camera sensors.

Sensor Array on Autonomous Volvo XC90

(Source: Volvo)

Coelingh acknowledges that there are some fundamental problems that cannot be overcome. For example, lidar sensors cannot see through fog or rain and cameras cannot see lane markers that are obscured by snow. In addition to using multiple sensor types, Volvo is taking care in packaging the sensors to minimize the risk of obstruction from the elements such as snow and salt buildup.

The goal is to allow drivers to spend time on secondary tasks without constantly monitoring the system. The vehicles will be able to execute automatic lane changes and enter and exit a limited access highway. Soft degradation of the system will extend the time between the driver being alerted and when they have to take over. If the driver does not respond by taking over control in a timely manner, the vehicle will attempt to pull over and come to a safe stop.

Fully Autonomous vs. Self-Driving

Despite all of that, there is an important distinction between vehicles that are capable of fully autonomous operation and those that are entirely self-driving. The Volvo falls into the former category, with the ability to handle the driving when conditions permit, while reverting to human control in many scenarios. Google’s prototype pod car, which was designed without a steering wheel or pedals, is in the latter category. For the foreseeable future, driverless vehicles are likely to remain restricted to closed environments where they don’t need to interact with traditional vehicles.

As detailed in Navigant Research’s report, Autonomous Vehicles, 40% of new vehicles will have some form of automated driving capability by 2030. The bulk of those are likely to be similar in concept to what Volvo will be testing on Swedish roads in 2017. Although consumer surveys have indicated strong interest in autonomous vehicles, it’s too early to tell how much of that interest will be retained as consumers become aware of the real-world limitations of autonomous technology. Volvo’s test program in Sweden might give the first real feedback on this topic.

 

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)

 

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