Navigant Research Blog

China’s PEV Market Shows Signs of Life

— October 12, 2015

China is taking its new plug-in electric vehicle (PEV) market strength seriously, weighing policies that would increase availability of charging equipment both in homes and in public to support growing PEV demand. The Chinese PEV market has suffered from a failure to launch, as sales of PEVs have been dramatically lower than both government officials and many automotive industry analysts had projected. Government interest in PEVs in the country is driven both by the desire to put less polluting vehicles onto the country’s increasingly congested streets and the desire to promote domestic industry. However, these twin goals have often worked at cross purposes. The Chinese government set aggressive goals for penetration of new energy vehicles—including pure battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs)—among its light duty vehicle sales. The national government set a target to have 500,000 new energy vehicles in use by 2015 and 5 million in use by 2020. To spur the market, the federal government offered subsidies for BEVs and PHEVs, and these subsidies have curiously tapered down as PEV sales fell far short of the level needed to reach the goal of 500,000 vehicles by 2015. The subsidy was approximately $8,600 for a BEV in 2015 (down from around $9,400 in 2014), and $3,900 for PHEVs (down from $5,500). Additional subsidies are available at the provincial and city level in many parts of China.

However, these subsidies are restricted to domestically produced PEVs. While this policy was designed to support the domestic industry, it left the Chinese PEV market lagging behind other car markets where American, Japanese, and European PEVs were available. The Chinese OEMs have been slow to bring out their PEV models, leaving the market supply constrained.

Infrastructure Deployment the Next Step

The market is, however, starting to turn around. An influx of domestically produced PEV models have finally made it to market, and PEV sales reached 108,654 in the first 8 months of 2015, a 270% increase over the same period last year. A number of foreign automakers have been working on joint ventures with Chinese automakers for many years, and while many remain cautious, these recent signs of life have been encouraging.

The Chinese government may now be looking to build on this success by spurring infrastructure deployment. In a recent meeting with government ministers, Chinese Premier Li Keqiang shared that the government wants all new residential housing and at least 10% of public buildings and parking lots to be equipped for PEV charging. It is not yet clear how the government will pursue this target, but China is set to release its 13th Five-Year Plan in October and is reportedly making infrastructure deployment a top priority. It remains to be seen whether this will take the form of soft measures, such as incentives, grants, or mandates similar to Russia’s recent decision requiring all gas stations to be equipped with EV charging (the PEV market in Russia has stalled, so the need for widespread charging is unclear). Such a mandate will likely lead to poor implementation and inadequately maintained equipment; China would do better to set aggressive targets and match them to areas where PEVs are most likely to be sold. The country could also offer incentives for deployment and create requirements that new builds have the appropriate wiring and power for PEV stations to be deployed as needed.


EPA Looks to Make EV Charging More Energy Efficient

— July 24, 2015

The U.S. Environmental Protection Agency (EPA) wants to reduce the energy consumption of electric vehicle supply equipment (EVSE) by developing its first ENERGY STAR specification for this category of products. As we know, electric vehicle (EV) chargers are idle for the majority of the day, and the specification will address the amount of power consumed while not in use.

The ENERGY STAR program will initially focus on alternating current (AC) (Level 1 and 2) charging, but the EPA is also looking at direct current (DC) charging.

According to the EPA document:

“Emerging EVSE could include features such as the ability to receive DC power from PV panels or local storage; provide DC power to other devices in a building via USB, Ethernet, or other power transmission medium; supply AC power to a building or specific appliances; coordinate power distribution with other entities in the building; include electricity storage internal to the EVSE; and enabling transmission of power from a vehicle to a home.”

Enabling DC chargers to share the incoming power via USB, AC power, Ethernet, or other media is an interesting way of getting more value out of available power. DC chargers are only used in short bursts for fast charging, so finding ways to smartly manage them as a building resource makes sense. Building in a power converter enables the charger to integrate into other stationary devices, such as using DC power from a solar panel locally instead of sending it back to the grid where its value is often less. I haven’t seen any DC chargers that can do this today, so it will be interesting to see how manufacturers develop products with these capabilities.

Paying to Park

Car Charging is looking at increasing the utility of EV chargers through a different approach. The company is assessing a fee of $0.08  per minute to EV owners who leave their vehicles plugged in but not charging for longer than 15 minutes after the charging session ends, according to The 15-minute grace period seems sensible, as many customers receive automated alerts when charging is completed. The fee is a considerable incentive for people to be conscientious about moving their cars after a completed charge, which makes them available for other (revenue-generating) charging sessions, which is critical for EVSE to become profitable.

At the EV Roadmap Conference starting July 29 in Portland, Oregon, I’ll be moderating a panel where several industry luminaries will be discussing the latest innovations in smart EV charging. Stop by and check it out, or leave a comment here with questions for the panel.


New Efforts Address EV Affordability

— June 29, 2015

Power_Paddle_webThrough the first 5 months of 2015, according to data from, plug-in electric vehicle (PEV) sales are down in the United States by 4% from 2014. This is due, in part, to the current price of gasoline being lower than the 2014 price by $0.89 cents per gallon (per the U.S. Energy Information Administration), as well as the drop off in sales of the Chevrolet Volt in anticipation of the updated model coming out soon. In fact, if the year-over-year Volt sales are ignored, the rest of the industry is actually slightly ahead of last year’s pace.

The higher upfront cost of PEVs is clearly one of the major hurdles to greater electric vehicle (EV) sales, along with greater consumer awareness of their benefits in reduced fuel cost, performance, and drivability. The higher price tag precludes many prospective buyers from considering a PEV, although several models are below the current average new car transaction price of $33,363, according to

Making PEVs more affordable would bring in EV buyers from a broader audience, as data from a recent Navigant Research survey of consumers in the United States indicates that the interest in PEVs is not limited to high-income families. Of the survey respondents who reported having an income between $25,000 and $50,000 annually, 15% said that they preferred their next vehicle purchase to be a PEV, which was higher than those with income of $50,000 to $150,000 annually (9%).

Incentives and Research

California is trying to make PEVs more appealing to lower-income families in areas where air quality is a concern. New programs for people living in the San Joaquin Valley Air Pollution Control District or South Coast Air Quality Management District provided incentives of up to $9,500 on a PEV purchase depending on the individual’s income level. While it won’t prompt a spike in nationwide sales, a successful program could encourage other regions to similarly target getting more PEVs into lower-income households.

The European Commission is also targeting lowering the cost of PEVs through three research projects. As reported by Automotive Fleet, the 3Ccar project is focusing on reducing the cost of the electronic components, which, along with the battery pack, are the primary contributors to the additional cost of PEVs. Greater volumes of PEV sales will lead to more competition in electronics, which will lower the cost and result in more sales.

Utilities are stepping up by creating programs to make EVs cheaper to operate and to make recharging easier. On June 8, the Edison Electric Institute signed a memorandum of understanding with the U.S. Department of Energy (DOE) that will make utilities more active participants in reducing the cost of electric transportation and to build on the DOE’s goal of making EVs as affordable as a gasoline car by 2022. Greater utility involvement is critical to reducing EVs’ operational costs as well as providing the baseline charging infrastructure for consumer confidence that EVs can be recharged wherever drivers need to go in urban areas.


How Incentives Are Driving EV Markets in California and Oregon

— June 22, 2015

In a recent study conducted by Navigant Research, 1,002 consumers in the United States were asked their opinions on electric vehicle (EV) ownership, its advantages, and its disadvantages. The survey revealed some not-so-surprising results of incentives and how they affect EV purchases, including how consumer opinions on tax credits and charging infrastructure are influencing the decision on whether to purchase electric cars.

In Oregon, where 23.5% of participants responded that the biggest impediment to purchasing an EV was the premium price, the only incentive offered is a credit of $750 on the purchase of a battery electric vehicle (BEV). The percentage was lower in California, which offers $2,500 in rebates for each battery-powered vehicle and allows EVs to travel in HOV lanes for free. Of those surveyed, 6.5% of California residents responded that the premium price was the reason they would be less likely to purchase an EV.

Range anxiety appears to be much more of a factor in California, with 19.6% of respondents saying it is their primary reason for not purchasing an EV. In Oregon, the number is 11.8%. While there are 2,114 charging stations in California and only 402 in Oregon, the number of charging stations per capita in California is .000055, whereas it’s .0001 in Oregon. This means that there are twice as many publicly available charging stations for each person in Oregon.

As far as the number of EVs in each state, the ratio is even worse. According to Navigant Research’s Electric Vehicle Geographic Forecasts report, in 2015, 106,550 light duty plug-in electric vehicles (PEVs) are expected to be sold in California while only 4,872 are expected to be sold in Oregon. If California’s infrastructure for EVs does not keep up with growing EV sales, the ratio will get worse. However, three major California utilities (Pacific Gas& Electric, San Diego Gas & Electric, and Southern California Edison) have petitioned to install thousands of EV chargers.

What It Boils Down To

California and Oregon are fairly similar geographically: both are located on the Pacific coast, with temperate areas along the shoreline, and hotter weather east of the mountain ranges. However, the opinions and market influences for EV purchases are very different in both states. California consumers are disadvantaged in infrastructure, with a lower number of public EV chargers both per capita and per EV purchased. Oregonians receive a lesser financial incentive to purchase an EV, with only around one-third the state incentive as Californians receive. However, when it comes to actual purchases, Californians are still coming out ahead. In the light duty EV market, one car is projected to be purchased for every 364 people in California. In Oregon, the ratio is 815 people per PEV. So, when it comes to incentivizing EV purchases, it seems like offering strong financial incentives and HOV access takes precedence.


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