Looking at EV adoption barriers with 2020 vision and what utilities can do to remove them

Published on January 27, 2020 in Smart Charging by Chad Saliba


Discover what role utilities can play in encouraging EV adoption and supporting existing EV owners.

In our previous article we discussed how 2019 was an exciting year for electric vehicles, with exciting announcements like Amazon ordering 100,000 Rivian-built vans and new vehicle announcements like the Ford Mustang Mach-E, Ford F-150 and Tesla Cybertruck. 

 

Overall there was an 8.8% year-over-year decrease in EV sales in the U.S., 329,528 in 2019 down from 361,307 in 2018. It should be noted that US vehicle sales in general were down 1.3% year-over-year. The bigger change that should interest utilities is the shift in market share by vehicle type. In 2018, long-range Battery Electric Vehicles (BEVs), which include vehicles with a battery capacity of 50 kWh or greater, made up 58% of all EVs sold in the US. In 2019 this vehicle type, which poses the greatest threat to distribution infrastructure, rose to 67%. It’s also important, however, to look at who is buying electric vehicles, and why.

Why are people buying EVs?

In 2017 Geotab Energy reached out to a number of EV owners and asked them various questions, including what motivated them to purchase an electric vehicle. Their answers generally fell into one of three categories: Environmental considerations, operational cost savings or an interest in new technology. Roughly 38% stated environmental reasons, 31% said it was an interest in technology and 19% cited operational cost saving.

 

Earlier this year, Deloitte asked a similar question in the 2020 Global Automotive Consumer Study and found related but slightly different answers: Lower emissions, lower vehicle operating costs and social status (keeping up with the latest technology and others.) Environmental reasons were still the driving factor, with 47%; lower operating costs came next, with 38%; while only 5% replied tech/social status was important to them.

2020 Deloitte Global Automotive Consumer Study chart

Lower emissions, as well as lower operating costs, are the primary reasons consumers consider electric vehicles. Source: 2020 Deloitte Global Automotive Consumer Study

What is currently holding back EV adoption?

Although EV adoption is increasing, several hurdles remain. The first is cost which, even with rebates, is typically higher than it’s internal combustion engine counterpart. With the continuing drop in battery technology, however, we are getting closer to price parity: In August 2018, Reinhard Fischer, a senior exec from VW stated, “We strongly believe that the tipping point is near, and that tipping point will be price equity.”

 

Another common  concern is range limitation or “range anxiety” and a lack of public charging stations, but it is not as much of a concern as it once was. Previously, a BEV like the Nissan Leaf would have a rough range of 80 miles and this would be reduced if energy were used for things like heating the cabin. Now, long-range BEVs, such as the Tesla Model 3 and Chevrolet Bolt, have an estimated range of over 200 miles. This is significantly larger than most people’s average daily drive, even if you take into consideration range reductions. The Deloitte study mentioned earlier, for example, showed that even though drivers only drove 27 miles on average per day, over 60% said they expected a BEV to have a minimum range of 200-400 miles.

Consumer expectations regarding EV range

Expectations regarding the acceptable range of a BEV is a significant concern among prospective consumers, even though daily transportation requirements are usually modest by comparison. Source: 2020 Deloitte Global Automotive Consumer Study

 

If their daily drive only uses 10% of their range, why does this concern persist? Perhaps they don’t have access to charging,  if they live in an apartment or similar multi-dwelling unit building, for example. Another question prospective consumers might have is what happens when they need to make a longer trip, whether for work or pleasure? Consumers want to make sure they don’t end up “trapped” somewhere. Currently there is a growing interest in adding more public stations across North America, which will hopefully eliminate this concern. Drivers should also be encouraged to break the habit of waiting until the warning light turns on, before looking for a place to plug in.

Have past pain points for EV owners been addressed?

Other than cost, range and the number of public charging stations, what issues have EV drivers faced in the past, and have these been addressed? In our interviews we found that it wasn’t the number of public chargers that was the issue, it was the charging time and an overall poor experience using the station. Charging time, even using a DCFC charging station, is significantly longer compared to filling up at a gas station. But  you have to consider how often is this actually going to be an issue. If you are taking  a longer trip, then you will have to plan a longer stop, but this can be timed to coincide with stopping for a meal or a rest break.

 

Another surprising discovery was that many EV drivers had visited public charging stations that were out-of-order. Who is responsible for this infrastructure, they wondered? According to Deloitte survey responses, it remains unclear to many who should be building stations, let alone be maintaining them.

Responsibility for building public charging stations

In the US there is no firm consensus on who is responsible for building public charging stations. Source: 2020 Deloitte Global Automotive Consumer Study.

 

The last pain point, which is still a problem today, is that most car dealerships have not fully embraced EVs. Sometimes prospective owners have visited dealerships and were given incorrect information  like, “you can’t charge a Mustang Mach E at home.” There needs to be more EV education, and the people responsible for selling the EVs should want to become experts. Otherwise, they risk being left out of the equation while customers purchase the EVs online, like they do with Tesla.

Why should utilities care and what can they do to help?

Utility companies have a lot to gain by promoting electric vehicle adoption, both from a customer satisfaction and reliability standpoint. Many utilities provide various rebates or incentives, for both vehicles and home charging equipment, and some implement EV-specific rate programs that work in conjunction with that equipment. While these alleviate the financial concerns, they don’t help with the other concerns and misconceptions prospective EV owners have, which need to be addressed through education.

 

Some utilities are already taking this leadership role by hosting “ride and drive” or similar events. Another option is to use innovative tools like the Chargeway Beacon. The Beacon is a turnkey solution that assists auto dealers by improving the electric car sales process while showing that their utility company wants to help. It enables customers to understand that electricity is just another type of fuel, showing them where they can access public charging stations and what rebates are available to them.

 

Utilities can continue their involvement with EV owners with a program like SmartCharge Rewards, which rewards them for preferred charging behavior. This could include charging off-peak, peak avoidance or to align with times when there is an abundance of renewable energy. Not only does this make the customer happy, saving them money by charging when electricity is cheaper and providing them an additional incentive, it is also valuable to the utility. By integrating this additional load, utilities can mitigate premature infrastructural damage, which is most likely to occur at the distribution level.

Conclusion

Utility companies potentially have the most to gain from widespread EV adoption. By taking a leadership role early on, and addressing the concerns of their customers, utilities can establish themselves as key players in the world of EVs, even though the market is still evolving and EVs are very different to other sources of electrical load.

 

Learn how to profile and manage EV charging load with solutions for electric utilities by Geotab Energy.


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Disclaimer

Geotab's blog posts are intended to provide information and encourage discussion on topics of interest to the telematics community at large. Geotab is not providing technical, professional or legal advice through these blog posts. While every effort has been made to ensure the information in this blog post is timely and accurate, errors and omissions may occur, and the information presented here may become out-of-date with the passage of time.

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