On February 19, the United Kingdom coalition government launched a new package of incentives to encourage the uptake of plug-in electric vehicles.  The total value of the funding is up to £37 million ($56 million), depending on how many people take advantage of the offer before it expires in April 2015.  Rather than offer more help with purchasing vehicles, the incentives are based on infrastructure spending: The government will provide 75% of the cost to install chargepoints.

Three types of purchasers are named in the announcement, including homeowners for personal chargers, train operators who can now get help to install chargepoints at railway station car parks, and local authorities seeking to install fast chargers and provide on-street charging for residents who do not have private driveways.  Public sector fleets such as the police, hospitals, and local government can recover the complete cost of the installation.

Nissan is understandably pleased about this announcement, as the company expects a boost to sales of its European LEAF model, which will soon be built in the United Kingdom with British batteries.  Although the £5,000 government subsidy to buy a LEAF helps to make the vehicle more affordable, the cost of the charger spoils the deal for some potential purchasers.  This new incentive provides a solution for that as well as more assurance that range anxiety will not be an issue for much longer.

Find a Plug

The availability of charging facilities has been brought up as a reason for poor sales of battery electric vehicles, although it remains something of a chicken-and-egg scenario.  In the United Kingdom in January 2012, there were more chargers installed than EVs on the road.  Now that fast chargers are being installed, the practicality of using an EV for longer journeys starts to become a reality.

Analysis of actual EV usage, however, has shown that the majority of owners can manage perfectly well by simply plugging in at home every night.  This is great for those who live in single-family homes with their own driveway and/or garage, but for those who live in apartments with communal parking it has made EVs impractical.  If local authorities take advantage of this offer, it will open up the EV market to a whole new category of customers.  Councilors who were elected thanks to promises of caring for the environment will want to make sure this happens.

The other side benefit could be increased demand from motorists who find that an additional advantage to owning an EV is a guaranteed parking space – at home, at work, and at the railway station.  Sometimes indirect benefits are more attractive than a simple price reduction.

The two largest EV charging networks are creating a joint venture to solve the most critical technical and business challenge facing their fledgling industry – authenticating users across networks and creating a centralized payment clearinghouse.

ChargePoint and ECOtality will each own 50% of “Collaboratev” (pronounced “collaborative”), which will develop de facto standards with the goal of enabling EV drivers to own a payment/authorization card that will work across any charging network.  This will allow drivers to “roam” to any service provider, much like mobile phone customers, and have the card recognized by the network and any fees added to the customer’s account.  EV drivers may pay additional fees for accessing other charging networks, much like ATM fees.

The industry has discussed the need for a consistent back-end payment processing and authorization system – that will utilize QR codes, RFID cards, and other technologies – almost since the first companies formed more than 4 years ago.  The combined company will build on standards work being done by NEMA (the Association of Electrical and Medical Imaging Equipment Manufacturers) and will make the protocols and interoperability standard available to any EVSE network operator for a small licensing fee, according to Pat Romano, president and CEO of ChargePoint. Romano said “a few” preliminary discussions have occurred with competing EVSE networks, but now that Collaboratev is formed, they will now more aggressively pursue partnerships.

Better, Not Just Bigger

The Collaboratev interoperability initiative is mostly likely to affect the United States market first, though it may also affect Europe and Asia.  Europe is developing the Open Charge Point Protocol and has a broader initiative to promote EVs and charging infrastructure known as Green eMotion.

If Collaboratev’s efforts to create a de facto standard are successful, they will accelerate EV charging and EV adoption by reducing consumer confusion and eliminating the hassles of joining multiple EVSE networks.

Streamlined roaming across networks will force competitors to increase the differentiation of their service, since simply touting a large exclusive network will no longer be a competitive advantage.  However, whether companies that have been battling each other in an EVSE land grab (see the  graphic below depicting the EVSE competitive field from Pike Research’s Pike Pulse Report: Electric Vehicle Charging Equipment) will be able to convince shareholders and investors that cooperating with a competitor-backed company is a smart strategy remains to be seen.

EVSE Competitive Field

(Source: Pike Research)

In the EV battery industry JVs among competitors have had more trouble staying together than Taylor Swift and her paramours, in other industries such as banking (e.g., the formation of MasterCard) and airlines (the SABRE data clearinghouse) have been much more successful.

The piece that could become contentious in future years is Collaboratev’s initiative to also “accurately provide aggregated EV charging station location data.”  A number of organizations, including PlugShare, Recargo, and the Department of Energy, are developing websites that will assist EV drivers in finding an available charging point.  Today the business opportunity is mostly limited to ad-supported services for a finite audience, but in a few years, hundreds of thousands of EVs will use charging stations, with impacts on utilities and grid operators.  That data – about where and how people are charging – will have tangible value to power providers looking to incorporate EVs into ancillary services, as well as to EV makers and marketing companies.

The charter of Collaboratev currently does not address licensing or sharing the revenue from such data.  Sorting this out sooner rather than later (when the financial value becomes more apparent) would be a wise move for the group.  Collaboratev’s founders acknowledged that this needs to eventually be addressed – but interoperability is the first task.

The past few weeks have seen a Wimbledon-worthy back and forth between EV advocates and detractors as they discussed the fairness of a disastrous road trip in a battery-powered Tesla Model S that was written about in the New York Times.  The dispute centers on the writer’s account, his charging behavior during the truncated journey, and the protestations of Tesla and angry EV enthusiasts that he should have taken more care in reaching his destination without depleting the batteries.  The Times’ public editor followed with a rather lame examination of the contretemps that did little to settle the basic dispute.  This whole debate, though, ignores a much larger point about Tesla’s product strategy.

As Chelsea Sexton astutely pointed out on Wired.com, the idea of a road trip up and down the East Coast in the dead of winter that solely relies on two fast Tesla Supercharger stations unnecessarily stretches the vehicle’s capabilities.  Most EV owners would know better than to even attempt the journey.  But the larger question is: why would Tesla want to limit drivers of its luxury vehicle to only a few charging spots when hundreds of easily accessible public charging stations are available?

Please Compromise

The Model S includes a proprietary cable for connecting with the Supercharger network.  Tesla’s stations have faster charge rates (90 kW) than the industry standard rate of 50 kW for fast DC charging, which, as the company points out, provides an exclusive benefit to Tesla drivers.

However, all along the eastern seaboard are hundreds of charging stations that feature the industry standard SAE J1772 plug.  Tesla requires that its customer pay $95 for an adapter to take advantage of this EV infrastructure, which personally I would want included if I’m paying $90,000 for a car.  There was no mention of the Times reviewer having this adapter in his test car, which can provide approximately 20 miles of range in an hour of charging.

The route taken along I-95 during the road trip also includes two fast DC charging stations using the CHAdeMO connector, used by the Nissan LEAF and Mitsubishi i (many of the more than 130 CHAdeMO chargers now in the United States were paid for by taxpayers as part of the DOE’s EV Project).  While these fast chargers are slower than Tesla’s Supercharger, they can provide about 150 miles of range in an hour, which is fast enough for most any EV road trip.  Tesla has committed to installing 100 of its Superchargers across the United States during the next few years, many of which will be thousands of miles from the majority of Model S owners.

Tesla announced recently that it will soon offer a CHAdeMO adapter for customers in Japan, and will eventually bring it to the United States, but when I recently spoke with the company, they would not commit to a date.  By the end of this year we’ll also likely see dozens of fast DC chargers scattered across the United States that use the SAE’s combo connector, which combines the slower J1772 technology with fast DC charging capability – but Tesla Model S owners won’t  be able to power up at these locations, either.

Tesla Motors’ slogan is “Zero Compromises,” but the company’s strategy of exclusivity for charging betrays that ethos.  Model S owners would be better served by greater charging flexibility than by the company’s spat with the New York Times.

U.S. Energy Secretary Stephen Chu announced a new EV charging initiative last month at the Washington Auto Show.  This was the Secretary’s last new program launch before he announced he would be leaving the DOE.  The DOE’s “Workplace Charging Challenge” is intended to encourage U.S. employers to install EV charging for their employees.  The goal is to increase the number of employers with workplace charging by tenfold within 5 years.  Program participants make a commitment to “develop a plan for workplace charging in at least one major company location” – 13 companies have signed up so far.

The focus on workplace charging highlights the general consensus that PEV drivers will charge up most often at home, but that the workplace is the second most likely place for charging.  This is somewhat in contrast to the heavy focus placed on public charging spots by the media, some EV charging companies, and indeed the DOE itself.  The DOE’s two biggest EV charging initiatives, the EV Project and ChargePoint America, together lead to over 4,000 charging units being placed into publicly accessible networks.  In his remarks, Secretary Chu noted that many potential PEV customers live in apartments or condos and would rely more on workplace charging since they would not have a dedicated garage unit.

Pull, Not Push 

The workplace charging market faces some of the same challenges that the public charging market does.  One question is: how much should the employer actually charge for the use of the units?  For now many workplace owners will do what the public station owners have done and not charge anything, viewing the charging units as a way to attract and retain employees.  Longer term, they may simply bill employees as they would for parking. This issue is less daunting for the workplace sector than for public charging simply because the workplace units will not be intended as a revenue generator; however, this lack of potential revenue is also why employers need to be encouraged to install EV charging stations, which will cost thousands of dollars. Another potential problem will come as the fleet of employee vehicles grows. Businesses will then have to manage the energy use and, in particular, the potential for incurring demand charges when electricity use spikes.

The DOE workplace charging initiative also reflects the new fiscal environment for the DOE (and indeed all government agencies).  The DOE is offering no specific financial incentives for workplace installation through this program, although employers can take advantage of federal tax breaks for installing EVSE that were reinstated for 2012 and 2013 with the fiscal cliff legislation passed at the end of 2012.  Compare this to the $130 million that the DOE provided in 2009 and 2010 for the EV Project and ChargePoint America programs, via the stimulus package.  Given the political focus on reigning in government deficits, we are not likely to see such an ambitious effort, with a matching price tag, in the second Obama Administration, but we will see smaller-scale funding grants – for example, through the Clean Cities program.  Overall, though, the U.S. EV charging market will be moving forward much more on its own now, with companies and technologies rising or falling based much more on the market pull and not government push.

Workplace EVSE Unit Sales, United States: 2013-2020

(Source: Pike Research)