Navigant Research Blog

European Powerhouses Invest in EV Assets

— December 21, 2017

The days of the internal combustion engine in Europe appear to be numbered, as the governments of the UK, Germany, and Norway all plan to end petrol and diesel car sales in the coming decades. The newly empowered replacement market of plug-in EVs (PEVs) continues to rapidly grow, and a trifecta of industries (energy, fuels, and automakers) is jockeying for position in powering PEVs.

Electrifying Partnerships

Fuel company Shell gobbled up EV charging company NewMotion earlier in 2017, and it announced a partnership with Daimler, BMW, Ford, and Volkswagen in November 2017 to install the group’s Ionity EV chargers at Shell locations across Europe. In September 2017, NewMotion signed a deal to provide access to its network of EV chargers to the customers of France’s Total. Competing oil major BP has been in talks with automakers to offer EV charging at its fuel station in Europe, according to Reuters.

Tie-ups between fueling station operators and PEV makers and charging companies make sense since the number of cars in need of petrol will only shrink in future years, so both are looking to provide similar services to PEV drivers rather than concede market share. Ultra-fast charging, at 300 kW or greater, makes sense at these locations since many PEVs will be able to get an 80% (or greater) charge in 15 minutes or less, during which customers can buy snacks, grab fast food, or take a bio break. (I presented on this topic to at the recent NACS Fuels Summit Latin America in Buenos Aires, Argentina.)

Power to the PEVs

European utilities rightly see PEVs as the greatest opportunity to increase load, and the somewhat flexible nature of EV charging allows for managed charging to balance the natural peaks and valleys in electricity supply and demand. Germany’s RWE was in early on EV charging and sells charging infrastructure and other EV-related services through its spinoff company Innogy. Also based in Germany, E.ON is deploying a fast charging corridor from Norway down to Italy in partnership with e-mobility service provider CLEVER. Global sales of direct current (DC) fast chargers are expected to reach 70,000 units annually by 2026, according to Navigant Research’s newest report on DC fast charging.

French energy company ENGIE has also been active, acquiring charging infrastructure company EV-Box in March as well as investing in e-scooter company Gogoro in September 2017. E-bikes, e-scooters, and e-motorcycles need to replenish energy as well, and we’ll likely see more companies offer more than light duty vehicle charging services.

Italy’s Enel reached across the Atlantic to acquire eMotorwerks, an EV charging services company that is also working on vehicle-to-grid integration services. In the UK, a consortium including energy companies National Grid, British Gas, ScottishPower, and ESB is researching the potential for integrating PEVs into operations across the UK.

Down the Road

The EV charging market remains highly fragmented with many small players. Utilities and energy companies have recognized that the stakes (and revenue potential) are much higher with ultra-fast charging and the rapid expansion of PEV models for sale. Making a profit by marking up electrons has proved challenging for startup companies. Energy companies with distribution networks and utilities that understand high power delivery believe they are well-positioned to manage power delivery through EV charging assets. Combining EV charging with other home energy management services is a desired business model for automakers, generation, and distribution companies alike. They will, however, face competition from the US’ largest EV charging network—ChargePoint—which has been fundraising to expand its European operations and has received investment from Siemens, Daimler, BMW, and others.

 

Cities Taking Steps to Charge Up EV Sales

— June 9, 2017

Urban areas with air quality concerns are promoting the use of plug-in EVs (PEVs) as a way to reduce greenhouse gas emissions. By investing in EV charging infrastructure, cities such as New York City, Seattle, and Boulder are hoping to allay residents’ fears of not having a place to recharge their vehicles.

New York City is emphasizing fully emissions-free driving by installing charging stations that get their energy from the sun. The city recently ordered more than 30 solar-powered charging stations from Envision Solar, the manufacturer of EV ARC units that fit within the footprint of a typical parking spot. The parking-constrained city is ordering the charging stations to provide power to New York City’s fleet of PEVs, which will likely grow by 1,000 vehicles in 2017.

Seattle to Add Light and Charge

The city of Seattle is leveraging its street light infrastructure for expanding EV charging. The city will install 100 of BMW’s innovative Light and Charge systems, which tap into the power of street lights. The Light and Charge system is part of BMW’s ReachNow mobility service that was initially piloted in Munich and is being brought to the United States for the first time.

The system will include both direct current (DC) fast chargers and Level 2 charging and will be placed at up to 20 locations, including the Woodland Park Zoo, where the first Light and Charge systems are now up and running. The smart street lighting Light and Charge technology also includes upgrades to more energy efficient LED lights, as well as sensors for monitoring the environment and a connection to the cloud for sharing data.

Big Charge in a Little City

The much smaller city of Boulder, Colorado is more than doubling its EV charging station capacity to 46 units in 2017. The city is using a $100,000 grant from the Regional Air Quality Council to upgrade its existing charging stations at recreational centers and other locations, as well as to add new stations.

Boulder is awash in Nissan LEAFs thanks to the progressive actions at the Boulder Nissan dealership, which is one of Nissan’s largest sellers of PEVs despite the city’s smaller population (about 100,000). The city is helping to educate residents about the economics and operational benefits of owning a PEV through the EnergySmart program. The unique EV advising service provides an advisor to talk residents through understanding the ins and outs of tax rebates, accessing charging infrastructure, and integrating EVs with home solar charging.

PEVs Charging Ahead

As seen in the chart generated by Navigant Research’s new Electric Vehicle Forecasts data service, the efforts that these cities are taking today will pay off in coming years and contribute to greater sales of PEVs. Annual sales of PEVs in Boulder, New York City, and Seattle are expected to grow by more than 800% to nearly 148,000 units between 2016 and 2025, according to Navigant Research.

Total Sales by Powertrain, Scenario, and Year: 2016-2025

(Source: Navigant Research)

Speakers from all three of these cities (myself included) will be discussing EVs and urban mobility solutions at the upcoming EVRoadmap Conference in Portland, Oregon. The annual event, which will be held June 19-21, has become the most important EV conference in the United States. EVRoadmap will feature speakers from across the globe and program tracks on cars, charging, and community.

 

Washington Utility Tests New Path to Integrating EVs

— July 27, 2016

EV RefuelingEastern Washington isn’t an especially well-known plug-in electric vehicle (PEV) market, given most PEV sales in the state are concentrated in Seattle and along the Pacific coast. However, the utility serving a large portion of eastern Washington, Avista, has made an ambitious and refreshingly unique move in preparation for the emerging technology. On July 27, Avista announced it will develop a pilot to demonstrate vehicle-grid integration (VGI) technologies in partnership with Greenlots across 200 Level 2 chargers and seven direct current (DC) fast chargers at residential, workplace, and public charging sites.

The purpose of the pilot is to determine how much PEV load can be shifted from peak load times to off-peak times without using time-of-use (TOU) rates. The hope is that the pilot will show that PEV load may be managed in a manner that reduces grid operating costs and increases grid reliability, thus optimizing potential benefits of PEVs to both utilities and ratepayers.

A Unique Approach

What makes Avista’s pilot unique is its holistic approach encompassing all forms of charging and the use of more nuanced demand-side management mechanisms than TOU rates. Including residential, workplace, and public charging within the pilot enables Avista to collect data on the uninfluenced charging behavior of program participants and then assess how demand response (DR) signals sent to PEV owners changes charging behavior across the charging network. The use of DR signals rather than TOU rates prevents new peak creation at the beginning of off-peak periods and maintains higher levels of revenue per kWh consumed by PEVs than would a TOU rate while still providing energy savings to PEV owners.

The pilot kicks off this August and will run for 2 years. Single-family and multi-unit dwelling residences will have 120 chargers installed, while the remaining 80 chargers will be placed at select workplaces or public locations alongside the seven aforementioned DC fast chargers. The chargers will be integrated into Greenlots’ SKY charge management platform, which is also being leveraged in a similar pilot for Southern California Edison that looks specifically at workplace charging.

Fast Growing Customer Base

Avista’s pilot comes in response to the strong possibility that its PEV population is going to increase dramatically. Washington’s Electric Vehicle Action Plan seeks to ensure 50,000 PEVs are on the state’s roads by 2020, up from the 12,000 registered in early 2015. As of the writing of the action plan, only a few hundred of these registrations were in counties served by Avista. Yet, the market for PEVs is anticipated to increase significantly in the next 3 years as 200-mile range battery EVs (BEVs) at under $40,000 are introduced.

On behalf of mass market long-range BEVs, Navigant Research forecasts in its Electric Vehicle Geographic Forecasts report that Washington will meet its 2020 goal sometime in 2018, with sales expanding into suburban and rural markets. If the PEV market lives up to this forecast, then PEV populations in eastern Washington counties are expected to be at least 7 times greater than current levels by the end of 2020.

PEVs in Use in Eastern Washington Counties: 2016-2020

Washington PEV

(Source: Navigant Research)

 

The Effect of Ford’s $4.5 Billion Investment in Plug-Ins

— December 17, 2015

Despite a lackluster year for U.S. plug-in electric vehicle (PEV) sales, recent news from major automakers is encouraging. Last week, Ford announced its intentions to add 13 new electric cars to its lineup by 2020. The announcement is not entirely groundbreaking, as multiple German luxury brands are already well into developing and deploying plug-in options for most to all core model lines. What is notable is that the announcement came from Ford.

Over the last 5 years, automakers have gradually become more comfortable with PEV technologies, and the number of models available from more and more brands increases annually. Though the first mass market PEVs were introduced from economy brands like Ford, most of the new PEV introductions in the last 2 years have come from luxury brands, and most new models over the next 2 years are also coming from luxury brands. As such, according to Navigant Research’s recently published Electric Vehicle Market Forecasts report, the luxury segment is expected to grow to capture near 50% of the global PEV market by 2022, up from around 23% currently.

Economically speaking, the premium for the batteries that support electric drive becomes less pronounced as the vehicle price rises. In addition, luxury vehicle customers are more likely to value vehicle capability over vehicle costs than economy class customers. This is likely a reason why luxury brands are already pursuing Ford’s strategy and why Ford is the first of global economy brands to announce such a strategy.

A Modest Approach

Among economy brands, Ford has been fairly aggressive, with three PEVs in production for markets in North America and Europe. However, the company’s efforts have largely been overshadowed by Nissan and Chevrolet, which have spent billions establishing brand recognition through the marketing and production of the new dedicated plug-in model lines (the LEAF and Volt, respectively). Ford, on the other hand, has approached its PEVs more modestly, adding plug-in variants to existing model lines with limited fanfare.

It’s likely that Ford’s plug-in strategy hasn’t changed all that much with this announcement; 13 new electric cars probably means 13 new plug-in variants to existing model lines. Most of these variants are likely to be plug-in hybrids (PHEVs) with relatively short all-electric ranges compared to the next-generation Volt, but that’s not a bad thing.

PHEVs make it possible to drastically cut gasoline consumption. Owners of Ford’s current PHEV offerings have utilized battery power for 30%-40% of driving needs, and each mile powered on gasoline is more efficient over conventional platforms as PHEVs typically include the regenerative braking technology commonly found on regular non-plug-in hybrids.

In addition to the above, the sheer size of Ford’s announcement alongside its diverse vehicle portfolio is bound to include some interesting options outside of the small car classes that are typically associated with PEVs. Perhaps the development of a PHEV truck for the mass market is not too far off the horizon.

 

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