Early 2013 has brought a slew of “reassessments” of battery vehicle prospects, as some industry commentators have decided that the nascent plug-in vehicle (PEV) market is already a failure.  Pike Research has already countered this doom-and-gloom, showing that the PEV market is poised for growth similar to that of the hybrid market. Undoubtedly PEV sales have been lower than some OEMs and their battery suppliers had projected, leading to overcapacity in the lithium ion battery sector.  Battery manufacturers are looking for solutions to this problem in the near-term as well as hedging their bets should PEV demand not rebound.  Can the electric bus sector help take up some of this overcapacity?

For the near-term, the answer is no.  As I discussed in my Electric Drive Buses report, the battery bus market is quite immature in most parts of the world, except China.  China has made battery bus development and deployment a key element of its industrial policy, in order to exploit the country’s vast lithium resources.  Nearly all major bus producers in China have battery bus products, and hundreds of e-buses have been deployed.  Unfortunately this near-term promise is limited to China, since transit bus specifications in North America and Europe are quite different than for China’s buses. Chinese battery and vehicle manufacturer BYD has been most aggressive in pursuing developed-country markets, with deals in Windsor, Ontario and the Netherlands, among others.  However, taking a serious share of these markets remains far off.  As a start, BYD is building a manufacturing facility in California to comply with U.S. Buy America laws for selling buses to U.S. transit agencies. In January, BYD received approval to sell its electric buses in the European Union; the company established manufacturing in Bulgaria to serve this market.

Under 1,000

A handful of small companies offer electric buses in North America, but of the mainstream bus manufacturers, New Flyer and Nova Bus have each unveiled prototype electric buses, but these are  still early in the testing and demonstration phase.  Europe also has a few OEMs, including Optare and PVI, offering small electric buses, but again total numbers are low (dozens, not hundreds).  Overall, electric buses will be a niche application for the next several years, due to issues of range, recharging time, and price.  Worldwide battery bus sales in 2013 are anticipated to be under 1,000, which will generate around 133,000 kWh of lithium ion battery demand.

 Annual Electric Drive Bus Lithium Ion Transportation Battery Capacity by Region, World Markets: 2012-2018

(Source: Pike Research)

Longer term, demand for lithium batteries will grow substantially, hitting 1 million kWh in 2018.  Add to this the demand from hybrid and fuel cell buses, and battery buses become an attractive long-term market for battery companies.  But it’s not a near-term solution.

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.

Two Chinese automakers, Dongfeng and Geely, appear ready to adopt the beleaguered U.S.  electric vehicle maker Fisker Automotive into their respective electric vehicle (EV) portfolios.  For Fisker, the acquisition cannot come soon enough, as multiple failures with its battery supplier, the destruction of more than 300 Fisker Karmas in hurricane Sandy, and bad press thanks to vehicle fires have left the company’s production lines idle and money tight.  When the dust settles, Fisker will most likely join the ranks of the western EV companies who on the precipice of failure were bought by Chinese companies.  For the Chinese automakers, the acquisition of Fisker may be the country’s best chance to finally sell a full speed EV outside the Asia Pacific region.

China leads the world in terms of total EV production, but most Chinese-produced EVs are bicycles, motorcycles, low- to medium-speed vehicles, or buses.  The vast majority are sold to the country’s massive domestic market. Meanwhile, the Chinese government has announced lofty targets for production and adoption of full-speed EVs – targets that look out of reach, for now.  Chinese automakers have tried to live up to the targets, but sales have been exceedingly more dismal than markets in Europe, North America, and Japan.  Additionally, efforts to develop a robust export market for the country’s EVs outside of Asia Pacific have been disappointing.

One of the problems is that the market for EVs isn’t large enough to provide Chinese firms the opportunity to compete against domestic and Japanese automakers that have led both North America and Europe for the last century.  In addition, China’s EVs have had difficulty meeting safety standards in the United States and aren’t priced competitively with any EV in their respective classes outside of China.

Made in China

CODA is the first and most productive effort to date.  A remake of the Chinese Hafei Saibo, the car has a 31 kWh battery pack, a range of 125 miles, and a price almost $10,000 more than the Nissan LEAF.  The CODA went on sale in mid-2012 and reportedly sold less than 100 vehicles by the end of the year.  A more visible effort has come from BYD, a Chinese company backed by Berkshire Hathaway, Warren Buffett’s investment firm.  The company has long aspired to make a beachhead in the major European and U.S. markets but has only been able to sell its EV, the E6, to taxi fleets in New York City and London.  The E6 has a range of 185 miles on a battery of 60 kWh.  It costs $58,000 in China and would have a hard time competing against the growing class of EVs with shorter ranges and price points below $30,000.

Buying Fisker wouldn’t mean that a competitive Chinese-built EV has finally made it to the United States or Europe (the Karma is produced in Finland).  However, it would give the Chinese owner the unique opportunity to finally enter the PEV markets in the States and Europe with a vehicle that, despite its problems, has made a decent showing at a reasonable price.  The Karma couldalso  make quite a splash in China where the luxury car market is booming.

The second generation of the Nissan Note will be launched officially at the Geneva Motor Show this week.  B-Class “supermini” vehicles are the biggest segment in the European market, and competition is tough.  Styling and technology features get a lot of attention, as well as performance and fuel economy.  Ford was the first to introduce advanced safety systems to this segment with its 2013 Focus model, offering features such as adaptive cruise control, lane departure warning, blind spot detection, and automatic emergency braking.

One of the new options on the updated Note is the Nissan Safety Shield package, which is composed of lane departure warning, blind spot warning, and advanced moving object detection.  While Ford uses the increasingly popular forward-looking camera along with the latest low-cost radar sensors, Nissan has chosen to implement a similar suite of functions via a camera that faces to the rear.  The camera also contributes to the Around View Monitor feature that gives the driver a bird’s eye view of the car as it is being reversed, thanks to additional cameras at the front and sides.

Warning: Obstacles Ahead

What makes the Nissan system significant is that the rear-looking camera is not simply a passive sensor projecting an image on the screen for the driver to look at but an active monitor that warns the driver if something is not right.  When reversing, a warning beep will sound if an object is detected in the path of the vehicle, thanks to the rapid analysis of the images many times per second.  The same technology is used to monitor the blind spot on either side when the car is traveling forward.  The camera can also track the lane markings to alert the driver of inadvertent drift.  The camera itself has a convex lens that gives it a vision sweep of a little over 180 degrees, and because of its importance to the safety systems it has an automatic cleaning system built in.

The Note’s Around View system confirms that advanced driver assistance systems (ADAS) are now available on mass market vehicles.  It was only a few years ago that such features were offered only on the most expensive luxury models.  It also demonstrates that camera technology and the analysis software has advanced to the point where it can replace the more expensive radar sensors in safety systems, thus accelerating the adoption of similar functionality across all vehicles in the near future.

Widespread availability of ADASs on the majority of vehicles is an important stepping stone toward intelligent transportation systems and autonomous driving.  Well-tested software and sensors are critical to more automated driving, and once individual cars are more aware of their surroundings the value of linking them via wireless communications to share data about traffic and potential incidents also goes up.  Pike Research will be taking a closer look at this technology later in 2013.