Navigant Research Blog

E-Bikes Take Center Stage at Colorado Bike Expo

— May 14, 2015

The Colorado Bike Expo on April 25 showcased the latest products in the industry to kick off the fresh 2015 cycling season. The event, held at the Colorado Convention Center in Denver, had around 100 exhibitors. The presence of electric bicycle (e-bike) manufacturers and distributors at bicycle events like the Expo has grown substantially over the last few years as interest in the technology continues to grow at a rapid pace.

Improving Technology

Several notable improvements have been made to 2015 e-bike models over previous years. The range capabilities provided by e-bike batteries have dramatically improved, with most models at the event providing a lengthy 40–60 miles of range per charge. Previous e-bike models generally had a range of 15–25 miles. The weight of the bikes has also dropped, making them easier to ride, transport, and store. 2015 models generally weigh between 40 and 45 lbs, while models just a year or two ago typically weighed between 50 and 55 lbs. Additionally, a new model from Pedego allows the e-bike to be charged directly from an outlet, eliminating the need to remove the battery from the bicycle before charging.

Upgrades have been made on the software side as well. Some e-bike models are now Bluetooth compatible and can connect with a riders’ smartphone. The rider can customize and save the pedal-assist power settings of the e-bike to avoid having to reprogram the settings each time the bike is turned on and off. New safety and security features have also been added through this new level of connectivity. If a rider believes their e-bike has been stolen, a press of a button on their smartphone instantly locks the bike in place and a GPS tracker shows the rider the exact location of the bicycle. While some new advances in the regular bicycle market were also showcased (such as ultra-lightweight models), e-bikes stole the show in terms of technology capabilities.

Future Outlook

Navigant Research’s Electric Bicycles report forecasts that annual sales of e-bikes in North America are expected to rise from 179,000 in 2015 to nearly 300,000 by 2023. Longer electric range, reduced vehicle weight, and advanced software capabilities are all helping to move the market in this high-growth direction. Steadily reducing lithium ion battery costs left most e-bike representatives at the Expo believing that the cost difference between similar quality bicycles and e-bikes will be negligible in just 2–3 years.

 

Washington Encourages Utilities to Deploy EV Chargers

— May 13, 2015

On May 11, Washington Governor Jay Inslee signed into law a bill titled “Encouraging utility leadership in electric vehicle charging infrastructure build-out.” The law encourages public utilities commissions (PUCs) in the state to set rules for passing along the cost of electric vehicle (EV) charging to all ratepayers if they are requested to do so by investor-owned utilities.

The legislation enables utilities to pass on the cost of EV charging infrastructure as long as the rate increase does not exceed one-quarter of 1 percent. PUCs in other states have varied in their willingness to allow the cost of EV chargers to affect the rate base. For example, in Indianapolis, EV car share service Blue Indy is months behind the original launch date because the PUC there denied a similar request for EV infrastructure investments by the utility.

Washington State Representative Chad Magendanz (R-Issaquah), who sponsored the legislation, said in an email to Navigant that the law was created so that the upfront cost of charging equipment could move from the consumer to the utility. “My vision is for utility customers to be able to simply request an EV Level 2 charging station for their garage, just like they’d request a cable modem installation from the cable company … many of the current obstacles to charging at home or work will disappear.”

Restored Incentive

Washington is expected to have the fourth-most EVs on the road in 2015, according to Navigant Research’s recently published report, Electric Vehicle Geographic Forecasts.

Utilities are well-positioned to own and operate EV charging infrastructure since it increases the market for their product (electricity), and they also need to manage the impact of EV charging on grid stability. However, in many states, laws have prevented them from owning EV chargers, and some states, such as California, have had to revise laws to allow utility involvement.

“HB 1853 essentially restores the incentive a power company would normally have to invest in equipment that would increase its sales, but that we’ve eliminated through conservation programs,” said Magendanz. “Utilities have the expertise and purchasing power to dramatically reduce costs of this essential infrastructure build-out, and can break down barriers to EV ownership in high-density regions.”

The challenge has been for states that are pushing utilities to reduce energy consumption to recognize that transferring oil consumption from transportation into electricity delivered by utilities is economically and environmentally sound policy. States such as Washington that have low carbon intensity for producing energy (only Vermont has a lower carbon intensity, according to the U.S. Energy Information Administration) can see the greatest greenhouse gas savings by encouraging EV adoption.

 

Solving the EV Charging Puzzle

— May 11, 2015

When Tesla, Nissan, and General Motors (GM) introduced plug-in electric vehicles (PEVs) to the mass market, arguments against PEVs mainly cited weaknesses with vehicle cost, range, and limited publicly available electric vehicle supply equipment (EVSE). The first two weaknesses are difficult to solve, but their solutions are fairly straightforward: battery cost cuts through economies of scale and range increases through the development of better batteries. However, solving the third weakness is more nuanced. For instance, it’s been assumed that simply increasing public charging infrastructure will increase the adoption of PEVs, which has led to multiple government- and utility-funded initiatives on public infrastructure build-outs.

A Contradiction

Though it’s arguable that the public charge point build-out on behalf of the EV Project has been integral to PEV sales growth (most likely as passive marketing), data from these and other early infrastructure projects has suggested that PEV owners overwhelmingly charge at home rather than at the public points. This fact questions the practicality of these initial public infrastructure investments. Yet, data analyzed from a survey discussed in Navigant Research’s Electric Vehicle Geographic Forecasts report suggests that a lack of charging infrastructure still seems to be the biggest drawback to PEV ownership, as illustrated in the chart below.

Primary Drawback to PEV Ownership, United States: 2015              

(Source: Navigant Research)

What this contradiction appears to indicate is that yes, there is a need and likely a business case for public EVSE, but it needs to be in the right place. The trouble is that building owners are unlikely to invest in EVSE unless they see a need from residents, employees, or customers. And these groups are unlikely to ask for these services unless they have a PEV, which is unlikely if they don’t have places to plug in the PEV. What this all means is that the EVSE industry has to continue to find the right places for both the PEV owner and the building owner—or run the risk of placing infrastructure where it’s unnecessary.

Innovation

An innovative approach to solving this problem is underway thanks to the efforts of a San Francisco-based non-profit organization, Charge Across Town. In mid-April, the organization launched the Driving on Sunshine campaign, which showcases EVSE company Envision Solar’s integration of solar power and energy storage into a mobile EVSE unit named the EV ARC. The campaign places three EV ARCs at predetermined locations throughout San Francisco for 3-month periods and collects data on site usage. Findings on the data will be used to inform on public EVSE use and determine where units may be most effectively placed for consistent use; units will be donated to sites with the most use.

The charging stations are likely not inexpensive; however, it’s feasible to consider that a utility with big plans for infrastructure development (Pacific Gas & Electric, perhaps) would benefit greatly from a similar approach to siting public EVSE installations. Further, it would provide incredible value to potential host sites in actually determining the efficacy of EVSE placement without the added costs and embarrassment of a never-used public EVSE station.

 

Hyperloop Glides toward Reality in California

— May 11, 2015

Hyperloop Transportation Technologies Inc. has struck a deal with landowners in central California to build the first hyperloop test track in the world. The track will encompass a 5-mile stretch near the busy Interstate 5 highway between San Francisco and Los Angeles. The idea for a hyperloop as a mode of transportation was popularized by Elon Musk in his 57-page white paper released to the public in 2013. Musk’s vision is a system that is cheaper and operates much more cleanly than California’s proposed high-speed rail while propelling passengers between Los Angeles and San Francisco in just 30 minutes.

Hyperloop systems use magnets and fans to push passenger pods through depressurized tubes at very high speeds. While Musk imagined a system that operates at close to 800 mph, the pilot project (expected to break ground in early 2016) will test at a much more modest 200 mph to demonstrate proof of concept and to conduct additional testing on safety. About 100 miles of track is needed in order to reach the 800 mph speed. Nevertheless, this trial is undoubtedly a huge step forward for the hyperloop industry and comes sooner than most expected.

But at What Cost?

The 5-mile pilot project is estimated to cost about $100 million to build, with most of the funding expected to come from an initial public offering (IPO) by Hyperloop Transportation Technologies later this year. With a 400-mile distance between Los Angeles and San Francisco, this system would cost about $8 billion to make the full trip between cities (assuming the costs of building the track and pods stay the same). This is still far lower than the expected costs of California’s high-speed rail, which comes in at a whopping $67.6 billion, according to the California High-Speed Rail Authority.

Working out the Kinks

While hyperloop technology offers tremendous potential for unprecedented low-cost, high-speed transportation, there are still some major hurdles for the industry to overcome. Development costs are expected to be very high for this technology, and those costs are not factored into the $8 billion estimate (considers manufacturing costs only). In order to continue developing the pods, capsules, and tubes to become commercially viable, this industry will need considerable cash.

Perhaps the most obvious concern is the nature of the technology itself. Transporting human beings through capsules at nearly 800 mph has yet to be proven a safe venture, and efforts to reduce the potentially nauseating effects will need to be worked out. Whether or not solar panels on the tubes would generate enough electricity to power the propulsion system is another concern of skeptics, such as Roger Goodall, a maglev train expert and a professor of control systems engineering at the United Kingdom’s Loughborough University. For now, Hyperloop Transportation Technologies looks to prove the doubters wrong; thankfully, we won’t have to wait too long to see the results.

 

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