Navigant Research Blog

Hopes to Spur EV Growth in South Korea

— February 8, 2016

moving white carElectric vehicle (EV) sales in South Korea reached 2,821 units in 2015, compared with 1,183 units in the year prior. Considering that the 2015 goal was to have 5,000 units on the road in the country, the EV adoption rate has been rather low in South Korea, mainly due to the lack of charging infrastructure available in the country and consumer perceptions of the vehicles. Nonetheless, the central government and municipalities are introducing plans to push more EV sales. For example, the central government mandated that 25% of the government’s new vehicle fleet must consist of EVs starting in 2015. In addition, the city of Seoul and Jeju Island are aiming to deploy 50,000 EVs respectively by 2017.

Government Plans for 2016

In December 2014, South Korea’s Ministry of Trade, Industry and Energy (MOTIE) announced its goal to deploy 200,000 EVs and 1,400 fast-charging stations by 2020. In line with this goal, the latest press release from the Ministry of Environment states that the government will subsidize sales for 7,900 EVs, 30,400 hybrid electric vehicles (HEVs), and 3,000 plug-in hybrid electric vehicles (PHEVs) in 2016.

According to the press release, an EV driver can receive up to ₩12 million ($9,928) in purchase subsidies, along with a ₩4 million ($3,309) tax incentive and ₩4 million ($3,309) for the charging equipment. Eight EV models are eligible for this program – the Kia Ray, Kia Soul, Renault Samsung SM3, Chevrolet Spark, Nissan LEAF, BMW i3, Hyundai Ioniq, and Labo Peace (a heavy duty vehicle). HEV and PHEV drivers can receive ₩1 million ($827) and ₩5 million ($4,137) in purchase subsidies, respectively, as well as ₩2.7 million ($2,234) in tax incentives. Applicants are selected on a first-come, first-served basis or by a random drawing.

Charging Infrastructure Development

On the charging infrastructure side, there are currently 337 public fast-charging stations in the country with the goal of having 1,400 stations by 2020. That said, the government plans to build 150 stations this year. In addition, some public fast-charging stations may be privatized since the government is encouraging private participation in developing EV charging infrastructure.

 

Surge of Growth for Southern California EV Charging

— February 4, 2016

Machine parkingThe Southern California electric vehicle (EV) charging market is about to get a surge of growth, as the first utility-led charging deployment programs have been approved by the California Public Utilities Commission (CPUC). Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E) each received the go-ahead for their proposals to deploy thousands of EV charging stations within their service territories.

This marks a major transition in the EV charging market in California, as utilities had previously been forced to sit on the sidelines while the plug-in electric vehicle (PEV) market launched and EV charging demand grew. This meant that utilities could not directly participate in a market that could provide a significant new revenue stream over the long term. The CPUC’s December 2014 decision to allow utility ownership of EV chargers has opened a new avenue for funding charging deployments via a stakeholder with (relatively) deep pockets and a stake in the growth of electricity as a transportation fuel.

California did have something of an EV charging gold rush when the U.S. Department of Energy (DOE) funded two major public charging deployment programs in 2009. The ChargePoint America and The EV Project programs resulted in over 6,300 public and private charging station installations (excluding residential). California got around a third of these; roughly 2,000 Level 2 and direct current (DC) fast charging stations were deployed in the state from 2011 to 2013. At the same time, California saw its DC fast charging installations grow thanks to the settlement between the CPUC and NRG Energy. The company, through its EV charging arm eVgo, committed to installing 200 fast chargers under this settlement from 2012 to 2014.

Charging Stations on the Rise

This new surge of stations will target a different segment of the market. The focus on public stations is waning somewhat, as utilization rates of public Level 2 stations have been mixed and as the market anticipates long-range battery electric vehicles (BEVs) that will have little need for short-term opportunity charging. What the PEV market does still need is charging at workplaces and at condos or apartment complexes. The DOE reports that there are 5,500 charging stations deployed at office facilities operated by its 250 partner companies in the DOE Workplace Charging Challenge. Navigant Research estimates that in total there may be around 9,000 charging stations in workplaces in the United States.

While this is a good start, workplace chargers need to expand beyond early adopters, as offices are going to be key to supporting PEV charging needs. SDG&E has said it will target multifamily communities, another critical next frontier to support increased PEV demand. SDG&E notes that 50% of its housing consists of multi-unit dwellings, representing a large and relatively untapped market for PEV drivers. Through all of this, utilities will need to manage the deployment process carefully to ensure that chargers are being placed in the best locations; that their charging company partners are secure, long-term partners; and that funds are optimized to buy charging stations that provide necessary data and management capability but are not over-equipped for the job they’re asked to do.

 

U.S. Federal Government Expands EV Charging Infrastructure Support

— February 1, 2016

EV RefuelingThe FAST Act transportation bill that became law in December 2015 contains an important provision to increase the coordination of activities of all players in the electric vehicle (EV) charging infrastructure ecosystem. Thanks to funding reauthorizations in the law, individuals and organizations that purchase EV charging equipment in the future will receive a federal tax credit for either commercial and residential chargers, as reported by Green Car Reports. This incentive is expected to spur additional sales of charging infrastructure that reduces range anxiety and increases sales of plug-in electric vehicles (PEVs).

More significantly, the Act requires the U.S. Department of Transportation (DOT) to “designate national electric vehicle charging and hydrogen, propane, and natural gas fueling corridors,” as well as to identify “standardization needs for electricity providers. …”

Increasing Installations

Since 2009, there has been considerable effort to increase the installation of publicly accessible EV chargers. These include the federal EV Project and ChargePoint America programs, as well as recent collaborations such as those between BMW and Nissan—notable because they support different fast charging standards—and Nissan’s growing effort in using multiple charging networks to provide free charging to customers as they roam.

The U.S. Department of Energy’s (DOE’s) EV Workplace Charging Challenge, a voluntary program for employers that install EV infrastructure, continues to progress rapidly, as highlighted in the program’s recently published interim report. According to the report, individuals whose employers offer workplace charging are 6 times more likely to own an EV than the average person. And workplace chargers aren’t just sitting idle; the report states they are delivering an average of 9.6 kWh of power per day.

Thus far, however, there has not been a national effort that adds utilities, state governments, and other key players to the development of charging networks and infrastructure. The FAST Act is looking to greatly encourage coordination by requiring the Secretary of Transportation to engage with stakeholders to include:

  • The heads of other federal agencies
  • State and local officials
  • Representatives of:
    • Energy utilities
    • The electric, fuel cell electric, propane, and natural gas vehicle industries
    • The freight and shipping industry
    • Clean technology firms
    • The hospitality industry
    • The restaurant industry
    • Highway rest stop vendors
    • Industrial gas and hydrogen manufacturers

The DOT has 1 year to identify these corridors, a not insignificant task that will require analyzing EV sales data, forecasts for future purchases for both plug-in hybrid and battery electric vehicles (BEVs), and the expected required volume of charging infrastructure, analysis of vehicle miles traveled by region. Identification of locations (using geographic information systems mapping) of the logical linkages between EV hotbeds where roadside charging is likely to be most beneficial is also a needed step. The corridors will require primarily DC fast chargers to enable BEVs to travel longer distances by recharging in under an hour, as well as some Level 2 chargers for extending the electric range of plug-in hybrid EVs that don’t have fast charge capabilities.

If these corridors are successfully electrified, we can expect greater concentrations of EVs in adjacent cities, ultimately resulting in improved urban air quality and reduced CO2 emissions.

 

What Is the Next Frontier for EV Charging?

— December 23, 2015

We’re in the auto show time of year, and so far this one is the season of the go big or go home plug-in electric vehicle (PEV) announcement. At the Los Angeles Auto show, Audi announced that in 10 years it expects 25% of its car sales to be plug-ins. To reach this target, the company will be offering plug-ins throughout its vehicle portfolio. At the Frankfurt Auto Show in September, the company revealed a concept version of one of these future offerings, a battery-powered quattro SUV. Although not connected to an auto show, Ford’s December announcement that it would add 13 new electric options to its vehicle lineup by 2020 was noteworthy in part because it came from a non-luxury brand OEM.

When these and other new PEVs roll out from 2017 on, the PEV market will shift into a new phase, marked by real diversity of offerings across vehicle platforms. Right now, the PEV market is somewhat hampered by the limited number of segments where plug-ins are available. OEMs have focused mostly on the smaller vehicle body types for PEVs like the Nissan LEAF, the Chevrolet Volt, and the BMW i3. This isn’t a criticism of the OEMs—it made sense to roll out a new technology like EVs on a limited scale to test consumer interest. As a practical matter, the weight and cost of adding lithium ion (Li-ion) battery capacity to a plug-in vehicle in 2010 naturally led OEMs to target small vehicle platforms requiring less power. But with Li-ion battery costs dropping at a faster rate than many projected in the last 5 years and pack prices projected to decline 5%-6% annually through 2020, OEMs are well-positioned to offer plug-in options throughout their vehicle portfolios, including vehicles with larger capacity like SUVs. At a minimum, this greater variety expands the potential buyer base, and it is a critical development in a market like the United States where bigger still reigns supreme.

The Next Big Challenge

These announcements are also pointing toward the next frontier in the EV charging market: fast charging. If the PEV market is going to look more like the mainstream vehicle market, with plug-ins a common option, customers will have to be able to use them like mainstream vehicles. While many of the new PEVs will be plug-in hybrids without range limitations, many will be battery EVs with a 200-mile or longer range. This will make them a no brainer for daily driving habits but will still limit their ability to cover drivers’ long-range driving needs. The solution is likely to be the development of fast charging networks along highways, spurred by automaker investment. This is the approach being taken by Tesla with its Supercharger networks. For the broader rollout of fast charging, the auto industry players will have to grapple with how much to pay for it, how such a network would be run, and how to cooperate with each other in this effort.

 

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