Electric Vehicles, Driven by Public Policy
“It is likely that 2010 will be remembered as a turning point in history, when the automotive industry began to transition away from the internal combustion engine (ICE) and towards electrification,” wrote John Gartner, analyst at Pike Research, in a recent report.
“For the first time, electric vehicles (EVs) and EV charging equipment are being manufactured for a mass market of consumers,” Gartner added.
Gartner wrote his report before last Thursday, when representatives and senators of both parties announced they would introduce legislation dubbed the “Electric Drive Vehicle Deployment Act of 2010,” the text of which has yet to appear online.
According to the website of sponsor Rep. Edward Markey, D-Mass., the bill includes $800 million for five “deployment communities” to encourage the use of 700,000 EVs in each community within six years. It offers tax credits and other incentives for EV purchases, EV charging equipment, research and development, and manufacturing. (It remained unclear over the weekend if that meant $800 million per community or was a total for all five.)
Proponents touted the bill’s effect on job creation, cheaper transportation costs for consumers, national energy independence and environmental benefits.
The news appeared to generate muted reaction in a week dominated by developments in the BP oil spill in the Gulf of Mexico. The bill itself has yet to appear, so details were sparse. But its outlines provided fodder for a conversation with Gartner. And The Detroit News had its take. Let’s look at the latter first.
The hometown newspaper of the flagging U.S. auto industry estimated the bill would cost $11 billion and noted that Michigan’s congressional delegation has yet to sign on. Roughly half that cost is $800 million to $1 billion for each of five to eight “deployment communities” and the other half would go towards R & D and loans to companies that retrofit, expand or build new plants for EVs and charging systems.
The Alliance of Automobile Manufacturers, which represents Detroit’s Big Three, plus Toyota Motor Corp. and seven other automakers, told the paper the bill focused too tightly on a small number of communities.
For his part, Gartner called the bill’s goals “aggressive.” Yet he said that government incentives to move the country’s transportation fleet from oil to electricity were appropriate, given the magnitude and difficulty of that goal. This is particularly true given the United States’ current lead in EV technology and its recent history of letting clean technology advantages slip through its hands, he said.
“Government support around the globe is critical to establishing a public charging infrastructure and, thus far, governments have shown a desire to support EVs through a mix of investments and incentives,” Gartner wrote in his report. [In the U.S.,] federal grants for EV charging projects will compose a significant portion of the market in 2010-2011.”
Gartner found that Asia-Pacific markets will be the world’s largest for EVs and charging equipment, with central governments in China, Japan and Korea providing incentives. China is the world’s largest vehicle market and will account for one-third of the world’s sales of charging equipment. In the U.S., home charging gear will account for two-thirds of sales. In Europe, with more multi-family housing, standalone charging equipment will dominate.
“Compared to many government involvements in technology deployment, this bill appears to have a much more direct impact on the market,” Gartner told me last week. “It gets money out the door and into the streets. Perhaps there’s an easier case to make here for an impact on businesses and the economy than previous programs.”
Based on the bill’s publicly available highlights, Gartner framed a few issues.
First, it’s not clear whether or how the new provisions, if passed, would relate to last year’s American Recovery and Reinvestment Act’s $100 million for EVs and charging stations aimed at Arizona, California, Oregon, Tennessee and Washington.
“It appears to be the same thing on a grander scale,” Gartner said. “But it’s hard to tell whether last year’s and this year’s programs would be linked.”
“The big question, of course, is whether focusing on specific areas to concentrate the benefits is the best way to spend those funds,” Gartner added.
From a functional point of view, however, Gartner said that involving an array of stakeholders in each community – including host utilities – would provide insight into how the entire system would work, prior to scaling up.
“It’s necessary to find out how the ecosystem would work,” Gartner said. “It needs to be tested and understood for its impacts on the grid.”
Even if the U.S. meets President Obama’s goal of one million EVs on the road by 2015, that will have little impact on generating capacity, he said. Concentrations of EVs charged at homes is more like to impact transformers at the distribution system level.
“Transformers are likely to be the pain points,” Gartner told me. “Utilities will want to track who’s got EVs and in what density to determine what equipment would be most at risk, then prioritize upgrades.”
Readers, questions abound. Should this country make it a national policy to encourage electrification of the transportation sector? If so, do you favor this legislation, or do you have a better solution? Utility operators, what are your concerns about EVs and charging stations?
Phil Carson
Editor-in-chief
Intelligent Utility Daily
pcarson@energycentral.com
303-228-4757
Comments
EPV or not EPV?
Thanks for this comment.
I differ. The United States of America, in June 2010, has a compelling national interest in energy independence. Forget global warming, forget air and water pollution, forget BP in the Gulf of Mexico. Think about how the greatest nation on Earth, in the history of humankind, is utterly beholden to the petro-dictatorships of the Middle East, many of them financing terrorism. Period.
Then tell me, again, how sitting on our hands meets the dangerous and rapidly moving events of the 21st century.
Regards, Phil Carson
Let EPVs lie...
The fostering of EPV by the government is ludicrous because it does not reflect the desire of any except a select few who are bent on reshaping society to fit their political beliefs.
EPV? The idea isn't bad. The idea has been around a century or more. Has their time finally arrived? Perhaps, but let the market decide that. Let the market demand that charging stations be provided. Let the parking garages install metered charging stations where they can earn a few extra bucks. The current infrastrure supporting ICE vehicles has been 100 years in development. If it takes 30 or 40 years to get EPV infrastructure in place, so be it.
In June, 2010, EPV is just an expensive curiousity. The desireabilty quotient (people who think EPV is better mobility / people who think something else is better mobility) is in the sub 10 -8 area, much worse than public transportation's 10-4.