Navigant Research Blog

New OEM Products and Investment Boost Light EV Market

— August 1, 2017

Various light EV (LEV) technologies are emerging to address the congestion, poor air quality, and lack of mobility options negatively affecting transportation markets around the world. LEVs include low speed EVs—also referred to as neighborhood EVs—and electric-powered two-wheel vehicles such as electric motorcycles (e-motorcycles) and electric scooters (e-scooters). These vehicles offer the ability to improve personal mobility while simultaneously reducing pollution from the transportation sector, which are attributes desired by government authorities and citizens alike. In contrast to private cars, LEVs occupy less physical space, contributing less to traffic congestion and providing more flexibility in where they can travel and be parked. Additionally, these vehicles are generally more affordable and have lower capability requirements than full-sized EVs. Due to these advantages, electricity is more competitive with light vehicles compared to the full-sized vehicle market.

Significant OEM Announcements

Leading automotive OEMs, such as BMW and Mahindra, are recognizing the opportunities in the LEV market, and both companies made industry headlines in July. BMW Motorrad released its X2City e-scooter, designed for a variety of urban mobility applications. The kick e-scooter has a foldable steering unit (for easy storage) and a top speed of 25 km/h (15.5 mph) and an electric range of 25 km-35 km (15-22 miles). Rather than distributing the X2City through the BMW Motorrad dealer network, the e-scooter will be sold in bike shops and online by the end of 2017. It is expected to retail for about €2,500 ($2,950).

Indian conglomerate Mahindra Group announced that it will double its investment in the United States, adding another $1 billion in funding. The Mahindra GenZe e-bike and e-scooter brands are key to Mahindra’s North American strategy, which is disruptive to traditional transportation technologies. GenZe recently announced a partnership with the on-demand delivery company Postmates. It will be supplying LEVs in the company’s New York and San Francisco operations and will expand to supply more delivery vehicles to Postmates’ network of 200 cities over the next year.

Market Opportunities

Increasing urbanization and government policies are pushing consumers in heavily populated cities to move away from full-sized cars for motorized transportation, creating opportunities for LEVs. Navigant Research expects the market for LEVs to expand significantly over the next 10 years. According to Navigant Research’s Light Electric Vehicles report, revenue generated by global LEV unit sales is expected to more than double over the next 10 years—growing from a $9.3 billion market in 2017 to $23.9 billion by 2026.

The market will be driven by continued declines in technology costs, advances in technology capabilities, and positive national and local regulatory policies. Unlike other large EVs, the purchase price of LEVs in most markets is closer to their internal combustion engine equivalent. LEVs also have lower licensing and crash test requirements compared to other vehicles, easing adoption for businesses to produce them and for consumers to purchase them. While the market for LEVs is improving, several obstacles still need to be overcome. These obstacles include low retail gasoline prices, relatively high purchase costs, and technology limitations.

 

New Federal Government Support Will Accelerate Canada’s Growing Smart City Market

— June 16, 2017

Recently, the Canadian federal government announced it has pledged to launch a Smart Cities Challenge Fund, proposing $300 million over 11 years for Infrastructure Canada to implement the program. The funding will support the deployment of clean and digitally connected technology that can improve life in cities and is modeled similarly to the US Smart City Challenge (won by Columbus, Ohio).

Until recently, Canada has lacked a national smart city framework, leaving major cities such as Vancouver, Toronto, and Montreal to develop their own climate action plans and digital infrastructure projects without significant federal guidance or funding assistance. Over one-third of Canada’s population lives in these three cities, and over 80% of its overall population is urbanized, making the improvement of city service delivery a crucial issue in the country. Highlights of key smart city initiatives from these three cities include:

  • Vancouver: In March 2015, the City Council of Vancouver voted unanimously to develop and implement a 100% Renewable City Strategy by 2050. This aims to make the city emissions free in both the energy and transportation sectors.
  • Toronto: Canada’s largest city, Toronto (Greater Toronto Area population of 6.4 million), is targeting an 80% reduction in greenhouse gases by 2050 (compared to 1990 levels). The city has allocated nearly $100 million for energy conservation measures, renewable energy projects, and retrofits of city facilities. Toronto is also expected to be the site of Sidewalk Labs’ Digital City project, part of Google’s vision to reinvent cities from the Internet up.
  • Montreal: The Montreal Smart and Digital City Action Plan aims to position Montreal as one of the world’s smartest cities. The action plan introduces 70 projects divided into five focus areas: urban mobility, direct services to citizens, quality of life, democratic life, and economic development. This is an open data project with an ultra high speed, multiservice telecom infrastructure.

Federal Government Stepping Up with Funding

Three rounds of funding are expected to take place in Canada, with the first round set for fall 2017. Each round of Canada’s Smart Cities Challenge will include:

  • One $50 million prize in funding for a large city
  • Two $10 million prizes for midsize cities
  • One $5 million prize for a small community
  • One $5 million prize for an indigenous community

Prime Minister Trudeau has pledged to link infrastructure with an innovation agenda, and the Smart Cities Challenge will help Canada achieve that goal. Canada has evolved into one of the leading countries in the world in terms of building infrastructure through public-private partnerships (P3s), using this model to fund light rail lines, hospitals, jails, and water systems, among other infrastructure. The country’s high utilization of P3s for infrastructure development combined with the new funding available in the Smart Cities Challenge positions Canada to elevate its attractiveness to key suppliers in the smart city market. Its actions also potentially lift the country from its current follower position into a leadership role in global smart city development.

 

Smart Cities NYC ‘17 Themes Reveal an Evolving Market

— May 25, 2017

The revitalized Brooklyn Navy Yard brought together academia, non-profits, private industry, and government leaders from around the world for the Smart Cities NYC ’17 conference and expo. Deliberating the future intersection of technology and urban life, key themes over the 3-day conference included digital inclusion, citizen empowerment, and the potential for technology to increase resident access to essential city services. It was encouraging to see the emphasis on digital inclusion and accessibility displayed by leading suppliers and city officials.

Digital Inclusion and Accessibility

A good example of how digital inclusion is being approached was provided by Microsoft, along with its partners G3ict and World Enabled, with the launch of the Smart Cities for All Toolkit. The toolkit is designed to help city officials and urban planners make more inclusive and accessible smart cities, particularly for the more than 1 billion people with a disability around the world. Tools developed for cities include a guide for adopting information and communications technology (ICT) accessibility standards and a guide for ICT accessible procurement policies, among others. The Smart Cities for All initiative is also in the process of developing a Smart Cities Digital Inclusion Maturity Model that will help cities evaluate their progress toward their ICT accessibility and digital inclusion targets.

A desire for greater inclusivity could also be seen on the transportation side, with many cities discussing the possibilities offered by mobility as a service (MaaS) solutions. MaaS has the potential to broaden transport options and lowers costs for consumers, enabling residents to have better access to potential areas of employment or leisure. One of the common initiatives is the deployment of multimodal transportation planning apps. These solutions, as shown in Conduent’s MaaS apps in Denver, Los Angeles, and most recently Bengaluru, allow residents to choose between an array of public and private options (such as bus, train, rideshare, carshare, and bikeshare) and help inform users of the cheapest or fastest ways to travel. Eventually, cities will be able to offer incentives and discounts to riders for taking certain transport options, for example, to mitigate congestion.

Bridging the Digital Divide

The primary goal of the global smart cities movement is to utilize technology to improve the quality of life in cities. While concerns about security and privacy have been well-documented, less focus is given to the potential for smart cities to increase the divide between small and large cities, the wealthy and the poor, and the healthy and the sick. To ensure these divisions are reduced rather than worsened, smart city programs need to ensure all segments of the population reap the benefits digital technology can provide.

These themes from the conference, along with recent major projects announced in cities such as San Diego and Columbus, provide further evidence that the smart cities market is evolving from one-off pilot projects toward more holistic outcome-focused approaches that consider the needs of all city residents and communities.

 

Cities Using Smart Street Lighting as a Platform for Smart City Applications

— May 22, 2017

Smart street lighting is increasingly being recognized by city leaders as the first step toward the development of a smart city. Connected lighting systems enable immediate and significant energy savings through LEDs and controls while also providing a potential backbone network for cities to deploy additional smart city applications and services in a wide range of sectors. Growing numbers of pilot and large-scale projects are demonstrating the value of using a smart street lighting network as a broader platform for innovation.

From Networked Controls to a Smart City Platform

Sensors and other technologies can be added to a smart street lighting network to create a multitude of new city services, including gunshot detection, air quality monitoring, traffic management, and smart parking, among others. The types of smart city applications being used by cities on the smart street lighting platform vary tremendously by project. Security and public safety are some of the key applications currently being implemented in North America. As an example, Chattanooga, Tennessee is using smart LED street lights that can be remotely flashed to break up gang activity. And two other cities, Fresno, California and Peoria, Illinois, are using gunshot detection technology on their smart street lights to enable law enforcement to respond more quickly to shooting events. In Europe, several key projects are using lighting networks to improve pedestrian, bicyclist, and traffic management. Meanwhile, Asia Pacific is developing numerous projects using environmental sensors for air quality monitoring to address the heavy pollution levels in many of the congested cities in the region.

Boundless Opportunity

These extended capabilities provided by a smart street lighting platform enable cities to make further cost savings and add new and valuable city services. They also offer the potential for added revenue streams related to the lampposts. For example, in Los Angeles, smart poles are being installed with 4G Long-Term Evolution (LTE) technology to improve mobile phone coverage. The city is generating revenue by renting the poles to cell carriers.

The practice of utilizing smart street lighting networks as a platform for other smart city applications is still in its early stages. However, with several large deployments (e.g., in San Diego and Copenhagen) and an array of pilot projects currently underway, an increasing number of cities are beginning to understand the nearly unlimited potential that information and communication technology (ICT) can offer in improving city service delivery and management. For more information and analysis on this topic, keep an eye out for Navigant Research’s forthcoming report, Smart Street Lighting for Smart Cities.

 

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