Navigant Research Blog

E-Scooters Get Their Own Network

— January 5, 2015

A San Francisco-based startup with Asian roots called Gogoro announced on January 5 that it is launching a line of futuristic battery-powered electric scooters and an e-scooter charging network that, for a monthly fee, will provide unlimited battery swapping and cloud connectivity.  The concept of battery swapping for electric vehicles has been tried before – most notably with the epic failure of Israeli startup Better Place (and with a little bit more success by Tesla Motors).  But this venture might have a much happier ending.

To understand how Gogoro might succeed, let’s first examine why Better Place failed.  Although the company made a number of personnel and strategic missteps, the fundamental problem of the Better Place model was that the battery switching stations were too expensive and too complex.  Another major problem was that the financial projections didn’t pan out because battery costs were still too expensive at the time of the firm’s launch in 2012.

Swap It Out

Gogoro, which has engineering facilities in Taiwan and whose CEO, Horace Luke, was the design mastermind behind Taiwanese cell phone manufacturer HTC, solves the complexity issue with a smaller battery pack: the Gogoro Smartscooter uses two batteries, each about the size of a Kleenex box and containing about 1 kWh of energy.  The user merely takes the battery out by hand and inserts it into the vending machine-like switching station.  Six seconds later, a fully charged battery comes out of the machine and can easily be reinserted into the scooter.  A fully charged pair of batteries provides the user almost 60 miles of range in an urban driving environment.

To solve the battery cost problem, Gogoro has two aces up its sleeve.  The first is timing: we are in a period of dramatically shrinking lithium ion battery costs.  What would have cost more than $1,000 per kWh a few years ago can be had for as little as a third of that today.

Gogoro’s other advantage is its strategic partnership with Panasonic, one of the largest battery manufacturers in the world.  Gogoro will use the same battery cells, made by Panasonic, that are used by Tesla Motors for its Model S battery pack.  And if it can grow quickly enough, Gogoro will get Tesla-type volume discounts.  Navigant Research estimates that Tesla pays approximately $200 per kWh for its Panasonic cells today, and that price is expected to drop as low as $130 per kWh by 2020 once the recently announced Tesla/Panasonic Gigafactory is up to full capacity.

Cool and Clean

Gogoro has one more big advantage going for it: the world’s young people are begging for alternatives to car ownership.  They want clean, affordable, yet stylish transportation alternatives.  This trend is as true in scooter-crazy Asian cities as it is in North America.  Traditional scooters are too dirty, dorky, and noisy to provide an appealing car substitute for most young people.  But Gogoro’s scooter will be affordable enough (although pricing hasn’t been announced, it should be cheaper than most other e-scooter options because the battery isn’t part of the purchase price) and stylish enough (CEO Horace Luke is a renowned industrial designer whose accomplishments include the Xbox game console and the much lauded HTC smartphone lineup) to be attractive to young urban dwellers in many countries.


Street Lights Add EV Charging

— December 11, 2014

Sometimes a solution forms at the intersection of two challenges that may not seem, at first glance, to have anything in common.  For example, cities are perpetually seeking ways to increase revenue, and many owners of electric vehicles (EVs) want access to ubiquitous charging infrastructure.

Enter the new concept of retrofitting street lights with money-saving LEDs and EV charging ports.  City managers are moving toward central control of street lights by adding a control node, which enables them to reduce cost and integrate the lights with other systems, as my colleague Jesse Foote recently wrote.  With smart street lighting technology (as covered in Navigant Research’s report, Smart Street Lighting) in place, EV charging capabilities can also be added to street lights, creating a new revenue stream for municipalities.

A Light and a Charge

Among the first pilots of this combination are occurring in the cities of Munich in Germany, Aix-en-Provence in France, and Brasov in Romania.  BMW has two such lights at its headquarters in Munich and will add a series of enhanced lights in the city next year.  A consortium called Telewatt, led by lighting manufacturer Citelum, is similarly installing LED street lights with EV charging in Aix-en-Provence.  In Romania, local company Flashnet has integrated its inteliLIGHT management platform with an EV charger.

Motorists can pay for the EV charging using a mobile phone app.  Cities that have regulations allowing them to provide EV charging services can gain revenue to help balance the books.  They can also balance the additional power demand of EVs within their overall power management system.  Placing a Level 1 or Level 2 charging outlet on a light pole reduces the installation cost of bringing power to the curb, which otherwise can be several times greater than the cost of the equipment.  Cities that install these systems will help drive demand for EVs, which has the added benefit of increasing urban air quality.

This is another example of the integration of seemingly disparate city services into a smart city.  As detailed by Navigant Research’s Smart Cities Research Service, the move toward integrating power, water, transportation, waste, and building management will yield considerable savings while improving the quality of urban life for city dwellers.


Will the Natural Gas Boom Help EVs?

— November 11, 2014

Natural gas is better used to generate electricity to power electric vehicles (EVs) than as a direct transportation fuel, according to a new study by Oak Ridge National Laboratory.  The study, entitled Well-to-Wheel Analysis of Direct and Indirect Use of Natural Gas in Passenger Vehicles, rates EVs powered by electricity from natural gas as being more energy efficient, less polluting, and cheaper to fuel than natural gas vehicles.

A contributing factor in the analysis is that natural gas power plants, especially combined cycle power plants, are very efficient in creating electricity, and when that electricity is used for locomotion by an electric motor, the net efficiency is higher than that of a natural gas engine.  The study assesses losses and energy used throughout the system, including leaks during transportation (from pipelines, etc.) and during compression and decompression of the gas in the case of compressed natural gas vehicles.  In the case of EVs, the study assesses power losses throughout the distribution grid, EV charging, and the power transfer to and from the battery.

As seen in the figure below, the study concludes that even a low-efficiency natural gas power plant would provide a more energy efficient source of electricity than using gasoline in a car.  The study used the Nissan LEAF and the natural gas Honda Civic GX as the baseline for the vehicle fuel efficiency.

Wheel-to-Wheel Energy Use

(Source: Oak Ridge National Laboratory)

Emissions of greenhouse gases, including CO2, are also lower in the case of EVs when either the current mix of generation sources or any type of natural gas power plant are used to create the electricity.  And, as is well known, electricity is also cheaper as a transportation fuel.  Oak Ridge estimated at time of the study that natural gas costs $1.65 per 25 miles for compressed natural gas vehicles, compared to $1.02 for electricity.

Pipeline Peril

It may seem counterintuitive that an extra step in fuel conversion (i.e., gas to electricity) would still be more efficient, but the greater efficiency of stationary gas turbines relative to small engines (as referenced here by Forbes) explains the math.

However, turning natural gas into electricity for EVs requires sufficient pipeline capacity, and a surge of EVs could overwhelm the regional grid if charging occurs at peak times.  Natural gas also has to compete with other forms of generation on price, and there’s no guarantee that the surplus of natural gas from shale would find its way into EVs, as it may simply replace coal.

The study makes the case for facilities that have combined heat and power to add EVs to the fleet instead of adding the significant cost of a natural gas refueling station.  Conversely, a significant argument for natural gas vehicles is their longer driving range and lower upfront cost.  If an EV’s driving range of 80 to 100 miles doesn’t match with the driving requirements, then the economics or efficiencies won’t matter.


Partnering Takes the Pain Out of Paying for EV Charging

— October 27, 2014

At the dawn of the modern electric vehicle (EV) era (way back in 2010), EV industry participants recognized that a simple way to pay for vehicle charging was critical to EV adoption.  In fact, I recall having conversations with at least one international payment processing company back then regarding the need for a central clearinghouse for EV charging payments.  I described this segment as a small niche that would grow into a major opportunity over time.  Neither that company nor others chose to start building the necessary relationships.  But today, after years of considerable talk and little action, progress is finally being made as charging networks are collaboration and payment clearinghouses are starting to emerge.

During the past half-decade, there have been numerous tales of the frustrations of EV drivers who carry multiple cards to be able to access competing proprietary networks.  The Hubject consortium in Europe has been leading the charge to make charging more consistent by simplifying customer authorization, and the group recently announced a method that enables mobile phones to pay for EV charging.

The PayPal Factor

The intercharge direct system is powered by online payment system PayPal.  Drivers scan a QR code on the charging station with their phone, which connects to the intercharge website where PayPal and other payment options are offered.  Customers who have a contract with an EV service provider can pay their existing rates, and more importantly, EV drivers without a contract can still access any of the 3,000 charging stations that support intercharge.

Things have come full circle for PayPal, which was founded by EV maker Tesla Motor’s founder, Elon Musk.  (Note the irony that, since Tesla offers free charging at its charging website, PayPal largely won’t come into play for its customers.)  PayPal is an effective backend payment system, since it’s used globally for small payment amounts.  It is currently being used in the United States for EV charging payments by General Electrics’s WattStation, and in October ChargePoint announced that it would begin accepting PayPal as well.

Reducing the cost and hassle of roaming between EV charging networks will increase the use of public charging stations, which will result in more charging stations being made available, and in turn higher levels of EV adoption.

Makers Make Progress

Efforts to expand EV charging in the United States are slowly paying off, thanks in part to the work of the EV manufacturers themselves.  Nissan is offering free public charging to buyers of the LEAF and convinced competitors ChargePoint, Car Charging Group, AeroVironment, and NRG to each support its EZ-Charge card.  BMW’s ChargeNow program offers a single card for paying at stations from ChargePoint and NRG’s eVgo network, as well as other partners internationally.

Not all partnerships in the area have worked out; ChargePoint launched an ill-fated joint venture with ECOtality in 2013 called Collaboratev that would have streamlined payment processes across both networks, had ECOtality not gone bankrupt only a few months later.

While proprietary payment systems make business sense for the charging networks, they hurt more than help EV owners and automakers.  If the expected millions of EVs are to rely on public charging, roaming between networks should be as simple as roaming between mobile phone networks or getting money from any ATM.  These recent developments provide hope that such interconnections are starting to emerge.


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