Navigant Research Blog

Automakers Expanding From the Garage to the Home with Energy Storage

— September 1, 2016

Lithium BatteriesAs the residential energy storage industry continues to take shape around the world, the landscape of companies involved is becoming increasingly diverse. While the industry is still in nascent stages, the number of new companies entering the market (and their differing backgrounds) is growing. Companies offering dedicated residential energy storage products include battery pack manufacturers, inverter manufacturers, software providers, solar PV vendors/developers, and automotive manufacturers. With the growing popularity of EVs, it comes as no surprise that automakers are looking to leverage their battery expertise to develop complementary products. These companies are eyeing a piece of the residential storage market expected to be worth $5.4 billion annually by 2025, according to Navigant Research’s Residential Energy Storage report.

In June 2016, after months of speculation, automaker BMW officially announced a residential energy storage product featuring the same batteries used in its i3 vehicles. The company joins several of its competitors that have already repackaged their vehicle batteries into home energy products. Fellow German automaker Daimler already offers Mercedes-branded home battery systems, and Nissan offers a similar product through a partnership with energy technology specialist Eaton. These companies are not alone; EV pioneers Tesla and BYD both have dedicated residential energy storage products and are actively working to expand in this area.

Seeking Advantages

Automakers see several advantages as they enter the increasingly crowded market for residential energy storage systems. Customers looking to purchase or lease EVs may be prime candidates for purchasing residential energy systems. The ability to upsell EV customers to also purchase home battery systems could provide a lucrative sales channel with lower customer acquisition costs than competitors. Additionally, automakers are actively working to position themselves within the emerging vehicle-to-grid space. Both BMW and Nissan have announced vehicle-to-grid pilot projects with power providers Pacific Gas & Electric and Enel, respectively. These programs seek to utilize the available capacity in EV batteries and the flexibility of EV charging to help alleviate congestion and reduce peak demand on the grid.

Furthermore, automakers may have a distinct advantage in the coming years through low-cost access to repurposed EV batteries. Some companies have already capitalized on this resource through partnerships with storage project developers to supply these used batteries at a competitive price. According to analysis in Navigant Research’s Alternative Revenue Models for Advanced Batteries report, “the effective energy capacity available from EV [lithium ion] batteries for second-life stationary energy storage system applications is projected to exceed 1 GWh per year in 2022.”

Across the growing energy storage market, new players are entering and looking to leverage their expertise from a variety of complementary industries. Automakers are not alone in having identified the advantages their existing businesses will provide as they compete in the energy storage market. Solar PV providers, energy service companies, and even utilities are all seeking to leverage their customer base and technical expertise to provide the most attractive and cost-effective solutions in this rapidly evolving market.

 

Mobility Services Target Driving Less (or at Least More Efficiently)

— September 1, 2016

CarsharingThe problem of urban congestion includes both too many cars simultaneously on the road and too few places to park them. New mobility services from Ford and Lyft are using data analytics and last-mile ridesharing to solve these twin challenges.

Increasing urbanization (82% of people now live in urban areas in North America, according to the United Nations) is intensifying the pressure on city streets and roadways and encouraging more urban dwellers to forego owning a car because of the expense and hassle of finding a place to park. Realizing that vehicle sales to city residents may start to flatten, automakers (including Ford) are diversifying their revenue streams with mobility services.

The recently unveiled FordPass app enables any car owner to pre-book a parking space in garages in more than 160 cities. FordPass also includes phone access to humans to help customers get around in traffic or find other mobility options, and the company also opened its first FordHub mobility storefront in San Francisco. When you also consider the company’s FordPay payment service, it’s clear that the automaker isn’t afraid to borrow from a certain Cupertino company’s playbook. (What’s next, the iFordFone?)

Autonomous Future

Ford also continues to march toward releasing a fully autonomous vehicle. The automaker recently invested in lidar manufacturer Velodyne’s autonomous sensing technology. Ford also announced its intention to produce a fully autonomous car by 2021 for use in ridesharing services. Uber, Lyft, and many other companies see taking those pesky compensation-seeking drivers out of the equation as the future of ridesharing.

Navigant Research forecasts that annual mobility services revenue will reach $4.8 billion in 2020. Automakers will play a significant role in these services, which include carsharing and ridesharing services, congestion charging programs, EV charging services, intelligent traffic management, and smart parking systems.

Smart Urban Mobility End-User Services Revenue by Region, World Markets: 2015-2024

Mobility(Source: Navigant Research)

If an autonomous vehicle is electric, it would reduce urban emissions while also addressing the problem of limited parking. If used to get people to and from mass transit stations, ridesharing programs can reduce the overall vehicle miles traveled by removing trips into the city core. Such is the case in the Denver suburb of Centennial, where light rail customers can request a free Lyft ride if they live near the Dry Creek train station. While using tax dollars to put people in private cars may seem counterintuitive, if it increases the utilization of light rail, it can be viewed as a net positive in solving the last mile challenge and reduce the cost when compared to limited-use bus services. Employees who work for XOJET, which provides luxury rides above the clouds, can also now access Lyft to get to and from their hotels and airports while they are accommodating the jet-setter crowd.

 

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