Navigant Research Blog

New Technologies Boost Fuel Economy

— March 26, 2013

While battery electric and hybrid vehicles are slowly gaining in popularity, they show no signs of becoming a significant portion of vehicle sales in the next several years.  Automakers, meanwhile, are busy exploring other aspects of vehicle design that will improve fuel efficiency.  Below is an update on some of these approaches:

Better Aerodynamics.  At speeds of 30 mph or less, aerodynamic performance has a minor impact on fuel efficiency.  Once freeway speeds are achieved, though, the energy needed to push the vehicle through the air dominates other factors.  Because drag is proportional to the vehicle cross-sectional area, the coefficient of drag (Cd), and the velocity squared, less energy is needed to maintain speed of smaller and smoother cars.  Significant improvements were measured on VW’s new XL1 hybrid when the conventional door mirrors were replaced with tiny cameras that projected the rear side view on to a small screen on the door where the mirror would normally be.

Reduced Mass. The energy required to overcome inertia and accelerate a vehicle is a function of its mass, so heavier vehicles need more energy to get them moving.  They also have to dissipate more energy to slow down and stop, which means bigger and more powerful brakes.  Electric vehicles with large and heavy battery packs suffer particularly in this department.  Automakers seeking to produce lighter vehicles face two big problems: alternative, lighter materials such as aluminum and carbon fiber are more expensive and often harder to work with, and lighter vehicles have to be stronger to keep the occupants safe from impact with heavier vehicles.

ICE Technology. The internal combustion engine continues to get incrementally more efficient.  Turbocharging and supercharging are now used for economy as well as performance, and features such as direct injection and higher compression have migrated from diesel engines to gasoline.  Downsizing the engine’s volumetric capacity without sacrificing performance is now a realistic option, and cylinder deactivation allows fuel saving when cruising while maintaining full power for acceleration when needed.

Stop-Start. Sometimes labeled “micro-hybrid,” the ability to eliminate idling while the vehicle is stationary has the potential to save a lot of money for drivers in heavy traffic.  Stop-start technology requires other vehicle systems to be electrified, which in itself can improve fuel efficiency.  New stop-start systems in development will add an electric “crawl” mode to extend the fuel savings in slow-moving traffic jams.

All these technologies are being introduced as new models come to market, but the challenge for automakers is to incorporate features that offer customer benefits without the steep price premiums that hamper EV sales.

Some of these innovations face regulatory hurdles.  To launch its XL1 hybrid in Germany and Austria, Volkswagen had to get special government dispensation because it lacks conventional external mirrors. The XL1 is illegal to drive in other European countries and in North America.  For some new technologies to take hold, lawmakers must revisit certain existing restrictions on vehicle design.


Simplicity, Lower Prices Keys to EVSE Sales Growth

— March 25, 2013

More than 7.5 million plug-in electric vehicles (PEVs) will be sold between 2013 and 2020, according to Navigant Research forecasts.  All of those vehicles need to be charged somewhere, which is why the electric vehicle (EV) charging supply equipment market has attracted more than 120 companies, large and small.

These vendors would like each new PEV owner to buy a home charging unit.  Due to a variety of factors, though, the percentage of consumers that choose to do so in future years will shrink.  According to Navigant Research’s 2012 Electric Vehicle Charging Equipment report, the portion of PEV buyers that will purchase a residential charging station will fall from 63% in 2013 to 47% in 2020.  The primary factors influencing this decline include:

  • Increasing sales of plug-in hybrid vehicles (PHEVs) with smaller battery packs that can be fully charged via a standard 110-volt outlet overnight
  • A greater share of PEV owners living in multi-unit dwellings without dedicated parking spots
  • Increased reliance on workplace and other public charging

As the relative sales of residential electric vehicle supply equipment (EVSE) go down, sales of commercial (non-residential) EVSE will by necessity rise.  The chart below illustrates that annual global sales of commercial EVSE will grow to more than 1.5 million units annually while residential EVSE sales will rise to less than 823,000 units.

Residential and Commercial EVSE Unit Sales, World Markets: 2013-2020


                                                                                                 (Source: Navigant Research)

To reach the forecast volume of residential EVSE sales, the cost of purchasing and installing a home charger must go down.  We are starting to see residential EVSE priced in the $600 to $650 range for basic units; the average selling price should fall below $500 by 2016.

Simplify, Please

EVSE maker AeroVironment is reducing the immediate financial impact of buying and installing a residential EVSE by working with dealers to bundle the EVSE cost into the vehicle’s purchase cost.  Through the program, dealers approve potential customers for financing above the price of the vehicle and the EVSE, warranty, and installation costs are added as a capital item.  AeroVironment is launching the program with dealers selling the Nissan LEAF and will expand it to dealers of other brands over time.  The company expects the installation to take 4 days or less, including the time for an inspection.  AeroVironment will also be busy installing residential EVSE in California.  The California Energy Commission recently granted AeroVironment $2 million to install 770 residential EVSEs across the state.

Depending on which state or city an EV owner resides, the permitting process can be a lengthy and onerous process for purchasers and electrical contractors.  According to Navigant Research’s recently published Electric Vehicle Supply Equipment Permitting report, some regions allow a permit to be filed online and offer same-day inspections.  In other places, differences in city and county rules can significantly slow the process.  Currently, very few states have attempted to standardize the process.  Yet, for sales of EVSE to grow as forecast, more states will have to simplify the process.


BMW i3 Will Offer a New EV Experience

— March 25, 2013

For some time, BMW has been promising to launch the i3 in 2013.  At the 2013 Geneva Motor Show, the company unveiled a three-door version, the i3 Concept Coupe.  It will be one of the first production vehicles to be made using BMW’s new modular electric architecture.  The standard version is expected to cost around €40,000 (about $52,000) when deliveries start in November, which is at the upper end of the current 3-series price bracket.  It should be eligible for government electric vehicle (EV) incentives, such as the U.S. federal tax incentive of $7,500, though the vehicle has not yet been formally tested and approved.

The BMW i3 has some interesting differences from most of the other EVs on the market.  Most volume-selling EVs and hybrid electric vehicles (HEVs), such as the Toyota Prius, the Nissan LEAF, the Mitsubishi i-MiEV, and the Renault ZE range, are designed for economical motoring and as such are front-wheel drive.  The i3 is rear-wheel drive, as is the Tesla Model S, which coincidentally also has a list price of about $52,000 (with a 40 kWh battery pack).  The focus for BMW remains on driving enjoyment and the target customer will be those who appreciate the BMW brand image and want to switch to clean fuel.

A Spare Engine in the Boot

Research carried out by BMW over the last few years has led to the conclusion that a 100-mile range is optimum for the majority of people, and most can get by recharging only every second or third day.  Those that regularly need a daily range greater than this would be better off, for now, buying a car with an efficient internal combustion engine.  It’s good to hear an OEM publicly acknowledge that its EV is not trying to appeal to everyone.  However, BMW has introduced a number of features to address range anxiety.

One factor is the dynamic range calculation from the integrated navigation and telematics system that takes into account current traffic and the topography of the roads ahead.  Selected drive mode and average driving style are also factored in, and nearby charge stations can be identified and potentially reserved if necessary.  The i3 also offers LED lighting (inside and out) and a climate control system that uses a heat pump principle to warm and cool the interior – measures that BMW says results in 30% energy savings in city driving when compared to conventional electric heating and lights.

But the most interesting optional extra is the range-extender feature, a built-in 600cc motorcycle engine with a 2-gallon fuel tank.  This will give owners peace of mind that they will not be stranded by making available an additional 80 miles of range after the battery runs out of energy.  The feature, which takes up a part of the luggage space, is expected to be priced at about €3,000 ($4,000).

While initial purchase price remains the main obstacle to major growth in EV sales, range anxiety is still one of the primary concerns of the car buying public.  BMW has addressed these concerns in its design, but the most effective solution is better education about the realities of owning an EV.  At the start of the testing run by BMW with its ActiveE and Mini E vehicles in Asia Pacific, Europe, and the United States, more than 70% of users said that access to public charging stations was very important to them.  In actual practice, however, public infrastructure was used for less than 10% of all charging.


Coalition Attempts to Set Fracking Standards

— March 22, 2013

On March 20th, a group led by major natural gas drilling companies Chevron, CONSOL Energy, EQT Corporation, and Shell announced that they have negotiated a set of voluntary environmental standards for shale gas hydraulic fracturing.  The new coalition includes five environmental groups and two foundations that have environmental interests.  The new Center for Sustainable Shale Development (CSSD) certification will include 15 performance standards for fracking operations.

This effort is encouraging because, until now, the arguments about fracking have been largely based solely on two voices: the drillers claiming that the technology is absolutely safe and the environmentalists claiming it is irreparably flawed.  While the truth is grayer than these positions, the bottom line has been that America’s thirst for energy has trumped any environmental concerns, until politicians get an earful from constituents and ban fracking altogether.  The CSSD standards have been compared to the LEED certification for certifying construction of environmental buildings and are likely to help relieve some of the tension surrounding fracking.

Mostly Marcellus

The CSSD standards are a good first step, but I see a few flaws that are likely to undermine some of their effectiveness.  For the most part, these new standards cover groundwater, the water used for fracking, the flaring of natural gas, and the type of diesel fuel that can be used at drilling sites.  The standards do not seem to make any effort to address the air pollution associated with drilling or the land use.  Most of the time, the air pollution surrounding fracking operations is substantially worse than other areas.  What’s more, the CSSD standards ignore the pollution impact of all the motors running on a drilling site.

Drill motors are almost always considered non-road diesel engines by the U.S. Environmental Protection Agency, and therefore, have different requirements than the diesel trucks that are used on the road.  Natural gas-fueled motors for drilling operations are starting to come into play, but these remain few and far between and the CSSD standards are unlikely to push that front.

Another challenge with the CSSD standards is one of geography: these standards (so far) only apply to the Appalachian area and the Marcellus shale gas region.  Whether they’ll be accepted by drillers in Wyoming and western states remains an open question, though it should be noted that Chevron and Shell both drill in those areas as well.  This geographic limit is likely driven by the number and location of environmental partners in the CSSD, but it gives the impression of more political posturing.

Still, the fact that drillers and environmentalists came together to put together some standards that appear to help reduce the impact of fracking is huge.  So, the billion dollar question is: will voluntary CSSD standards be enough to quell the fracking concerns and stave off additional legislative regulations?  Don’t bet on it.  The Sierra Club has already blasted the voluntary nature of the standards, and the Environmental Defense Fund has come out saying that these should complement, not replace, regulations.  Ultimately the success of these new standards will rest in the court of public opinion, and the public, right now, shows little inclination to limit the natural gas bonanza.


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