Navigant Research Blog

ITS Applications as a Key Element of the Smart City

— October 5, 2017

Coauthored by Ryan Citron

As urban areas see increasingly ubiquitous connectivity, opportunities for intelligent transportation system (ITS) applications are growing. ITS is a mature market and is a standard part of public agencies’ planning and operations tool kits. However, with individuals now continually online through mobile devices and the advent of the Internet of Things (IoT), ITS applications are growing in complexity and sophistication. ITS applications are also being tied into the broader smart city movement, which includes all aspects of city services, such as energy, buildings, water, and waste management.

Consumer Expectations

Consumers of transportation services increasingly expect dynamic real-time information on and access to a range of mobility options. At the same time, cities and other transportation agencies want visibility into all aspects of the transportation landscape and the ability to respond in real-time. The increasing availability of real-time data on traffic and transit services is providing new tools to city managers for both operation optimization and new services to users. In Helsinki, for example, the bus service operator Helsingin Bussiliikenne Oy (HelB) worked with IT services company CGI to improve its competitiveness through the use of sensors and data analytics on service performance.

Observing ITS Applications

Navigant Research’s recent report on the ITS market, Intelligent Transportation Systems, focuses on advanced ITS applications such as active traffic management, advanced traveler information services, and solutions that provide single access to a range of transportation modes.

While these types of services have the potential to provide significant benefits in improved mobility, reduced congestion, lower emissions from vehicle traffic, and optimized use of space within a city, most public agencies are still exploring how and at what pace they can incorporate advanced ITSs into their transportation systems. There are issues of cost, which can be significant, along with inadequate funding levels, complexity of data aggregation and analysis, and difficulty getting coordination across multiple agencies with responsibility for transportation and infrastructure. Cities that have led the way in adopting advanced ITS services can be useful guides to what works in different city environments.

Examples of City ITS Innovations

The Smart Cities Pavilion that will be open at the 2017 ITS World Congress is showcasing a handful of cities that have innovated in ITS applications like traffic management, transit services, and integrated mobility. The cities announced as exhibitors are Montreal, Canada (the ITS World Congress host city); Columbus, Ohio; Singapore; Copenhagen, Denmark; and Christchurch, New Zealand. The selection represents a wide range in terms of geography and population size/density from the ultra-dense Singapore with its population of around 5.6 million to the comparatively small city of Christchurch at under 400,000.

It should be interesting to see the similarities and the differences that come with these contrasting environments, as well as how they fit into the broader smart city activities underway in each locale. Event organizers have indicated that the smart cities pavilion will offer experiential exhibitions around the themes of Urban Mobility, Engaged Citizenry, Smart Security, Economic Cluster, and Smart Democracy. These themes go beyond transportation, placing ITS in the larger smart city context that cities are looking to implement.

I will be attending the 2017 ITS World Congress, being held this year in Montreal, from October 29 to November 2. The event features a large roster of speakers and exhibitors covering all aspects of ITSs. See the conference website for more details.

 

EV Charging Companies Going Global

— April 5, 2017

Commercial EV charging companies are starting to go truly global, supported by major investments coming from the energy sector and automakers. These investments will see companies enter new markets with the potential to ramp up in volume. Since plug-in vehicle (PEV) sales started in 2010, the commercial charging market has been geographically compartmentalized, with few companies based in North America and Europe expanding outside their home region. This was especially true once the large multinationals like Siemens and Schneider Electric pulled back from the market, leaving it to the smaller startup companies that needed to tend carefully to their cash flow. However, large companies are returning to the charging market in anticipation of it being on the verge of a high growth period, and they are announcing their intention to become global players.

Gearing Up

Last year, RWE spun off and rebranded its renewables business, including EV charging, to innogy. It announced innogy would target the United States for its charging market, one of the biggest PEV markets with significant growth potential for infrastructure.

Then in March, ENGIE acquired EV-Box, which has one of the world’s largest charging networks. EV-Box ranked as a leader in the Navigant Research Leaderboard Report: EV Charging Network Companies last year on the strength of its market share, its multiple capabilities as a manufacturer and a software developer, and its relationships throughout key European markets.

The Navigant Research Leaderboard Grid

(Source: Navigant Research)

EV-Box has recently entered the competitive North American charging market with its charger offerings. Entering the North America market seemed ambitious, as the company was a startup with plenty of market to play in throughout Europe without crossing the ocean to tackle North America. However, having a global energy giant like ENGIE behind it could provide EV-Box with the support it needs to pursue its expansion efforts.

Developing New Products and Relationships

It still won’t be easy. Getting a foothold in a new market requires not only developing new products, but more importantly, also establishing the web of relationships needed to secure customers and installation sites. This is a time consuming and therefore expensive process, which is one reason the large multinationals—or companies backed by large multinationals—will have an advantage in this market over the smaller players in the long run. Multinationals looking to come back to the market as growth finally ramps up may find that the startups that have established significant market share and have very large public charging networks will be an easy route to establishing a beachhead. Even companies that have smaller installation bases but dominant market share in a particular country or subregion in Europe or North America could be attractive targets.

ENGIE and innogy may be the thin edge of the wedge in terms of energy companies wading into the charging market, but they are not the only companies with big pockets that are seeking charging company partners. ChargePoint, the leader in the North American charging market, secured $82 million in a funding round led by Daimler in March. The funding will support a stronger push into the European market for ChargePoint.

Maintaining a Long-Term Perspective

While all this activity is encouraging as a sign of confidence in the charging market, success in this market will still require a long-term perspective. There is significant growth, but it will still be years before charging is a well-established and high volume market. It is also a market that is still overly dependent on financial support for deployments, whether from interested stakeholders like the car companies or from governments, and growth will not be even across all the market segments of public, workplace, and private chargers. These dynamics do still favor the companies with sufficient funding to stay the course.

 

A New Culture for Carsharing

— February 8, 2017

Carsharing continues to make the transition from a startup or non-profit culture to a corporate culture. More and more large companies are entering the space and acquiring smaller carshare services, and automaker services are adding high end vehicles to the quirky two-seaters. But the bigger news may be that carsharing is starting to show traction outside its traditional markets of highly developed car cultures—namely North America, Western Europe, and Japan.

A spate of recent announcements from automakers reflects continuing interest in on demand mobility services—not just carsharing, but also ride-hailing services like Uber and Lyft. The latest automakers to announce carsharing expansions are AB Volvo, the PSA Group, and Daimler AG. Volvo has been in the carsharing business since the late 1990s through Swedish carshare service Sunfleet. In January, the automaker announced it would create a business unit for global carsharing based on the Sunfleet service.

The PSA Group will be supplying EVs for a new carsharing service in Paris, targeting professionals as its primary customers. This mainly seems to entail offering larger vehicles such as the Peugeot Partner and Citroën Berlingo, both small panel vans. Daimler is also making a play for carshare users who want larger vehicles than the tiny smart fortwo vehicle that has made up its car2go fleet to date. But Daimler is going more upscale than panel vans. The company announced that it would begin incorporating Mercedes Benz sedans and SUVs into its car2go fleets in seven US cities.

Experimental Phase

These announcements reflect the wide range of approaches to carsharing that automakers are pursuing. Although automakers are demonstrating real interest in carsharing, they are still largely in an experimental phase, trying out different business models to see what gains traction and what best supports their respective brands. While some will likely find that the service does not suit their customer base or business strategy, the trend of establishing a separate business unit for shared mobility suggests that automakers are taking the carsharing market seriously.

Automakers that see shared mobility as a first application for automated vehicles will certainly continue to pursue these services. Small, quirky startup carshare companies may find it difficult to compete in that environment. It is likely that some small carshare companies will be acquired by automakers looking to establish a beachhead for carsharing in new markets. Note that consolidation is also happening through other big players in the shared mobility space, including Europcar. Through mobility startup Ubeequo, Europcar recently acquired a Milan carshare service called GuidaMi.

But it is even more interesting to see carsharing starting to break through in new geographic regions such as Thailand, India, the United Arab Emirates, and Kazakhstan. These are not necessarily locations that would seem obvious for carsharing—in some cases due to a lack of public transit, which is seen as a supporting pillar to a shared mobility environment. Perhaps most significantly, China is seeing a surge in on demand mobility services, as the government has begun encouraging shared mobility as one of many tools to combat congestion and pollution problems. These new markets have the potential to help the carshare market continue to grow as the mature markets become saturated.

 

Forward Momentum in EV Charging

— February 7, 2017

Let me join the many analysts writing to declare that “the private sector will move forward with XX energy innovation even if the US federal government stops supporting it.” This insight has gone from a contrarian hot take to conventional wisdom in record time. And it is a perspective that occasionally carries with it a whiff of wishful thinking.

That said, I can offer the projection that the deployment of charging infrastructure to meet the demands of a growing plug-in EV market will be pushed forward by the industry regardless of any changes in federal policy.

There is something to be said for industry stakeholders acting as if they are on their own in pursuing this goal. Not that the US federal government role has not provided momentum for the EV charging market. Federal funding helped fund the first rollout of public charging, though that program’s results were decidedly mixed. Some installations proved to be poor long-term opportunities and poorly maintained. But many others did help form the backbone of a nascent US public charging network.

The US Department of Energy’s (DOE’s) Workplace Charging initiative supported significant growth in workplace charging growth from 2014 to 2016. In its Mid-Project Review from December 2015, the DOE reported that “the number of planned and installed charging stations has increased by 70% since June 2014.” Granted, that was from a small installed base initially, but that did amount to over 2,000 stations. Most recently, the DOE collaborated with an effort by the US Department of Transportation to identify a network of locations that can be designated as ready for installing direct current (DC) fast charging.

Moving Forward

The EV market has changed significantly since 2009. Major automakers are planning to offer EVs in multiple segments over the next 5 years. Battery EVs (BEVs) that have over 200 miles of range are coming to market at more moderate price points. Automakers in Europe are already partnering to roll out ultra fast charging infrastructure. In the United States, utilities are waking up to the potential for EVs to provide new revenue.

In this environment, stakeholders are ready to work together to move the US market forward—and there is some benefit to industry not looking at the federal government as a white knight. This can direct focus toward coming up with innovative solutions to challenges like developing business models for the needed public fast charging infrastructure, managing spikes in electricity load, recognizing the potential for demand charges, and educating consumers about EVs in a compelling way, to name a few. If the federal government continues to play a role, that will be a bonus to any industry efforts, but industry seems prepared to take action regardless.

 

Blog Articles

Most Recent

By Date

Tags

Clean Transportation, Digital Utility Strategies, Electric Vehicles, Energy Technologies, Policy & Regulation, Renewable Energy, Smart Energy Practice, Smart Energy Program, Transportation Efficiencies, Utility Transformations

By Author


{"userID":"","pageName":"Lisa Jerram","path":"\/author\/lisajerram","date":"12\/11\/2017"}