Navigant Research Blog

Beyond Ultra-Fast Charging: Part 2

— June 1, 2017

The potential of automated drive has produced many a report theorizing about the likely impacts of automated drive technologies on the transportation system, the built environment, and more generally, society. Navigant Research is no stranger here; however, our tack is far more conservative than some others. The basic theory most of these reports (including ours) supports is that automation adopted primarily in passenger mobility schemes will drastically reduce transportation costs and increase passenger convenience. This leads to more transportation overall with higher dependency on automated light duty vehicles, but also less use (proportionally) of alternative transportation modes (bike, bus, rail, air, etc.).

The above means that automated vehicles are likely to be highly utilized and therefore automated mobility fleet managers are likely to desire durable vehicles with limited downtime for maintenance or refueling. To be competitive for automated services, battery EVs (BEVs) would have to rely on ultra-fast charging, which would make batteries less durable. Otherwise, they would require more advanced battery systems or significant increases in battery size (to bring charge rate [kW] and battery capacity [kWh] closer to a 1:1 ratio), either of which makes them more expensive.

More Pollution Regulations Are in the Future

At the same time, cities (where automated mobility services are likely to emerge) will probably adopt regulations limiting polluting vehicles within certain geographic boundaries. If they don’t, the ultimate impact of automation is likely more fossil fuel consumption. In such an environment, plug-in hybrids (like those employed by Waymo) may have the upper hand. Alternatively, this could be an opportunity for battery swapping.

Battery swapping notably has a poor record, but many of the barriers to battery swapping as a solution for the passenger BEV market don’t apply with automated mobility fleets. Battery swapping in part failed as a global strategy because it depended on OEMs agreeing on a common battery pack. In a managed fleet with vehicles from a single OEM, this is no longer a problem.

Is Battery Swapping the Answer?

Battery swapping solves reliability concerns, as the charge rate can be managed to optimize life and the battery can be enrolled in revenue generating grid services when off the vehicle. This would also make transportation electrification’s impact on the grid gentler. Additionally, swapping is a faster solution than the fastest wired or wireless charging solution and (as Tesla showcased) faster than liquid or gaseous refueling.

The last advantage is that in fully automated services, range is not as big of an issue as it is when there is a human driver. Theoretically, battery swap packs could be built smaller and added to the vehicle in increments to satisfy certain uses. As an example, instead of having two or more 200-mile battery packs per vehicle, managers could instead employ three or more 100-mile battery packs, which would further reduce overall system costs and risk.

It will be some time before such a solution might be employed. It is a later consideration in the evolution of mobility automation business models. The priority considerations are the development of the automated drive technology itself and the regulations to permit driverless vehicles. It is likely that initial services will leverage conventional refueling and/or recharging infrastructure until reliable business models have been produced. After that development, then competition within mobility services will drive such innovations.

 

Beyond Ultra-Fast Charging: Part 1

— May 31, 2017

Now that the continued decline in battery prices can make battery EVs (BEVs) cheaper to drive than the competition, ultra-fast charging is viewed as the final link to making them mainstream. Given that, the automotive industry is focusing on approximating the time it takes to gas up by rolling out ultra-fast charge networks in North America and Europe.

Tesla’s success with the supercharger network supports the above assumption, but there may be flaws in the ultra-fast charging concept relating to the basics of batteries. The primary component being that charging at a power capacity (measured in kilowatts) higher than the BEV’s battery energy capacity (measured in kilowatt-hours) stresses the battery, reducing its useful capacity over time. Most of the upcoming vehicles capable of accepting an ultra-fast charge will likely have battery capacities between 30 kWh and 80 kWh, whereas upcoming ultra-fast chargers can provide 120 kW-320 kW or more, 4-10 times the battery’s energy capacity.

Reducing Side Effects of Ultra-Fast Charging

Automakers and charging networks can develop systems to diminish the cumulative effects that ultra-fast charging has on batteries (as recently evidenced by Tesla). These solutions are effectively reducing the charging rate under certain technical and ambient environment conditions, limiting the value-add of the fast charging. Such limitations haven’t yet been seriously evidenced because the fastest charging today is only operating at around 2 times the battery capacity. Most charging generally occurs at sub-1X rates.

Only when BEV owners primarily rely on fast charging over slow charging will these limitations become more common and more concerning to potential customers. This is more and more likely given the increasing range of BEVs alongside the development of the ultra-fast charging networks. The advances in BEV and charging technologies mean that BEVs will no longer be limited to single-family homeowners with a reliable charging station in the garage. Indeed, many without residential parking spaces (and therefore charging equipment) may now view the long range BEV an option so long as they can fast charge.

Such ambitions should be tempered through consumer education efforts and/or the development of more modest slow charging options in long-term parking structures. This unfortunately further complicates an already complicated pitch to the mass market. It also threatens consumer consideration of electrification or limits use of the ultra-fast chargers themselves. However, such concern is warranted to avoid negative shifts in consumer perceptions.

Overall, as long as BEVs are primarily purchased by single-family homeowners, this potential problem is probably marginal. However, for the future transportation modes dominated by automated vehicles, it is likely a non-starter.

 

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.

 

Success in Automated Vehicles Depends on Tech, Services, and Manufacturing

— April 3, 2017

An old axiom in motorsports goes: “to finish first, first you must finish.” This means you can have the fastest car on the track and qualify on the pole position, but if you don’t have the preparation or team to back you up, the quality of the car is meaningless. In the race to make automated driving a successful commercial reality, hype may get companies all the media attention, but a fully realized strategy combined with the ability to execute are the keys to success. This is why Ford, General Motors (GM), the Renault-Nissan Alliance, and Daimler are the leaders in the latest Navigant Research Leaderboard Report: Automated Driving Systems.

Outside observers would not be faulted for believing that companies in Silicon Valley were about to roll over the entire automotive industry and take over personal mobility in the coming months based on news coverage. However, as many veterans of the technology industry have become painfully aware of, the reality is that building vehicles to safely transport the world’s population is far more difficult than just writing an app and publishing it to an online store.

Horse Before the Cart

Assembling a suite of sensors and writing the basic software to control a vehicle are actually the easy parts. Before that package can become a real product, you need a vehicle. Google developed its automated driving system in 2009 by hiring many of the top brains from Stanford, Carnegie Mellon, and several automakers that had previously created winning vehicles in the DARPA Grand Challenge program between 2004 and 2007. Then Google went to local Toyota and Lexus dealers and bought vehicles one or two at a time. Companies like Cruise Automation and Uber followed similar paths. In order to commercialize a system, they will need to invest billions more to develop and manufacture vehicles or find an automaker partner willing to supply cars.

Uber is reported to have lost more than $3 billion in 2016 without capital investment in vehicles or manufacturing. The world’s major automakers already have the engineering and manufacturing infrastructure in place, and many of them have been working on autonomous technology for far longer than Silicon Valley. Major automakers understand the intricacies of developing, validating, and certifying vehicles for profitable production.

At Navigant Research, we believe the leading automakers are learning what it takes to develop automated vehicles faster than new entrants can learn how to build cars. Companies like Ford, GM, Nissan, and Daimler also understand the regulatory and product liability hurdles faced by bringing automation to the world’s roads. These companies have heavily invested in controlling and understanding the key technologies required to make vehicles and automated driving system work seamlessly.

Just Around the Corner

The leading companies in this field are also rapidly developing their own in-house mobility services so that they can provide consumer access to automated driving systems while retaining control of vehicle manufacturing. This will help to ensure that the vehicles are properly maintained and updated—something that is key to safe and proper use within the early years of deployment.

Technology companies like Waymo and nuTonomy, as well as suppliers like Delphi and ZF, will have an important role to play in the new mobility ecosystem. But for now, automakers lead in the automated driving system race.

 

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