Ladies and gentlemen, start your motors. Electric and plug-in hybrid vehicles will be hitting U.S. roads in large numbers, beginning in the next few months.
With them comes the push to build an infrastructure of charging systems, because without a way to charge the vehicles every 40 miles or so, some of the cars will have serious range limitations. Promoters of the EV influx, including the U.S. federal government, see “range anxiety” as an important hurdle to first adopters and are aggressively working to build out the necessary infrastructure before significant numbers of the cars hit the streets, and that build-out will continue over the next decade. That means business for the electrical industry.
Electrical manufacturers are jumping into this game with both feet and fistfuls of cash, introducing charging systems under their own brands or in partnerships with other companies. The manufacturers say electrical contractors will play a central role in building out the charging infrastructure and they have plans to work with the companies contractors prefer to buy from — electrical distributors, of course — to provide the needed equipment.
Whether the electrification of private transportation will turn into a market that's large and lucrative and sustainable over the longer term depends on many factors. There's a lot that will have to go right for EVs to thrive as the new primary transportation choice for mainstream motorists, and there are some sticky obstacles to overcome, but huge resources are being put in place to give it a serious go.
Regardless of whether you're eager to drive one or not, electrical distributors should be looking at the EV as a potentially massive emerging market aimed right at their sweet spot. Along with solid-state lighting and the smart grid, electric vehicles may represent one of the biggest opportunities for electrical distributors in a generation.
Car Makers Shocked Awake
The new driving force behind the surge in interest in electric and hybrid cars is the auto manufacturers themselves — companies once thought to be so invested in platforms based on the internal combustion engine that they would never allow an alternative power plant to gain a foothold in the market. Now, following the success over the past decade of the Toyota Prius and other hybrid cars, plus new government incentives, emissions restrictions and fuel economy regulations, as well as the widespread rise of “green” values among consumers, the car makers have changed their tune.
The first new models aimed at the mass market will be the Chevrolet Volt and the Nissan Leaf, which are expected to appear in select North American showrooms before the end of the year. But next year the real influx begins — more than 30 car makers have announced plans to roll out electric or plug-in hybrid vehicles here between now and 2014. Even Ferrari has a hybrid in the works.
And there are smaller companies with cars already on the road, such as Tesla Motors in California with its sculpted $120,000 electric sports car taking advantage of the electric motor's radically different torque profile to hit 60 mph in a tick under 4 seconds. Smith Vehicles, a UK-based maker of specialty electric trucks, has opened a North American plant in Kansas City, Mo., making small trucks and vans for local delivery fleets. Manufacturers from other countries without a presence in the U.S. market, such as Build Your Dream (BYD) of China, see EVs as an opening. There are companies such as Hybrid Technologies, Mooresville, N.C., which takes existing models, pulls the engines and installs a bank of batteries, converting them to electric power. Electric motorcycles are already on the market — you can pick one up at Best Buy in some markets. The U.S. military has programs underway testing electric vehicles to see whether they could provide more flexible options in the field, relieving defense logistics operations of having to worry about ferrying gasoline in tankers. The market is also getting substantial help from government incentives focused on making EV adoption as fast and smooth as possible. So there's undeniable momentum behind this movement.
Power Players VIE for Position
It's that sense of momentum that has drawn many of the largest electrical equipment manufacturers into the electric vehicle supply equipment (EVSE) market, preparing to provide charging equipment for a user base that really doesn't exist yet in any meaningful way. In just the past few months, through announcements and in some cases product introductions, General Electric (GE), Eaton, Siemens, Schneider Electric, ABB and Leviton have all signaled their entry into the EVSE market. By no means do they have this space to themselves. Startup companies have launched to build out the EVSE infrastructure, among the highest-profile being Coulomb Technologies, ECOtality and Better Place.
GE made a big splash in July with the introduction of its WattStation charging system, expected to be on the market early next year. Designed by Yves Behar, a celebrated industrial designer, the WattStation's sleek look and features such as a retractable cord system, LED display and swipe-card e-commerce capabilities were an attempt to whet the public's appetite and allay concerns that charging stations will be an urban eyesore, said Chris Bowler, GE Energy's general manager for Industrial Solutions marketing.
The scale of the opportunity here for distributors is significant. According to third-party estimates GE is using to evaluate the market, each dollar spent on a charging station will require 50 cents worth of parts to hook it up. So at $4,000 to $7,000 per charger, an additional $2,000 to $3,500 will be spent in transformers, switchgear, panelboards, sub-meters, load centers, circuit breakers and other electrical bits and pieces (see sidebar page 19). That estimate doesn't include the cost of labor for the electrical contractor who will do the installation. If estimates of adoption in the range of 600,000 charging stations in North America by 2015 prove to be realistic, this represents a market of $3 billion to $6 billion over the next four and a half years.
EV charging stations will be installed in all kinds of places — cities are installing them streetside and in parking garages, while shopping centers, big-box retailers, major employers, hotels, apartment complexes, schools, coffee shops, restaurants, convenience stores and gas stations are among the first adopters, some offering free charging to lure drivers to spend time at their establishments. There will also be chargers in most EV drivers' homes.
Schneider Electric has formed an interesting partnership globally with Parkeon, a provider of systems for managing parking lots and garages. According to Rich Korthauer, director, Residential Power Business, for Schneider, Parkeon's systems provide a lot of statistical information on available spaces, how many times that space used, notification if a car has been sitting there too long and so forth. “They have a lot of expertise in that area in relation to what the charging environment will be,” he said.
In some proposals charging stations would be managed like a vending machine — the company that installs the unit owns it and pays a percentage to the landlord. Another interesting alternative is the Better Place model, where drivers of electric vehicles equipped with standardized battery packs would be able to pull up to a charging station like a gasoline filling station, have a little robot swap out a spent battery pack for a freshly charged one and be back on the road in a matter of minutes.
Pilot projects are cropping up all over among cities and institutions that want to be seen as early adopters. California; Washington, D.C.; New York City and Austin, Texas, will get the first Volts. Leafs in California, Washington, Oregon, Arizona and Tennessee. Nonetheless, cities and towns everywhere are using this as a proof-of-hipness indicator. GE is working as a technical advisor on Project Get Ready, an effort led by the Rocky Mountain Institute, deploying charging stations at the University of California San Diego and Purdue University. New York City is installing 200 with a $15 million grant from the U.S. Department of Energy.
EV charging standards have established three levels of charging systems. The Level 1 system uses a standard 110V outlet running on household current and can charge a standard 24 kWh vehicle battery pack from dead to fully charged in 12 to 18 hours. This is often referred to as an overnight charge, but if you plug in your car with a depleted battery when you get home from work, it won't be fully charged in time for work in the morning.
Because of this, many expect homeowners who want EVs to install Level 2 charging systems in their garages. Level 2 is a 240V/32A AC system using a specialized plug and socket, SAE J1772, and can charge the same battery pack in 4 to 8 hours. Installing these systems will require service upgrades in many homes.
Level 3, a 500V/125A DC charging system, is expected to be used by fleet owners and public quick-charge stations. It will charge the batteries in as little as 15 to 30 minutes, but will require an inverter and — for fleets or service stations charging several vehicles at once — a service capacity on the order of megawatts.
So there's a lot of installation work to be done. Some car makers are talking about doing deals with nationwide electrical contractors to install chargers in people's homes. Auto dealers are also looking at this market as a new service opportunity (and might make interesting partners for local distributors and contractors). Some of the big-box retail stores can be expected to get into this market as well. Walmart has said it's in discussions with auto manufacturers about selling EVs and plug-in hybrids through its chain stores and Best Buy is already selling an electric motorcycle, the Brammo Enertia, so it seems a safe bet such retailers will also take a good look at the charging stations as well.
The build-out of EV charging infrastructure is closely tied to smart grid efforts. Widespread adoption of EVs could represent a huge increase in peak load demand. Charge station providers are building their systems to be able to communicate with utilities for load-shedding and other information.
Sustainability of the Market
Although there's no real doubt at this point that electric cars and the infrastructure to charge them will be built, only time will tell whether electric and plug-in hybrid cars will gain a significant hold in the North American market over the long term. There's plenty of chatter and contention, and predictions both rosy and dire.
First there's the question of whether plug-in electric vehicles are really all that green. Given that demand for the technology is being driven primarily by its environmental benefits, this is probably an important question.
Fully electric cars — the first new one will be Nissan's Leaf — don't have tailpipes and don't emit much of anything, not even noise (unless you add it to alert pedestrians). That's not the same as saying they don't produce emissions. Some have snarked that EVs should be called “coal-fueled” vehicles. More precisely, electric vehicles are only as clean as the grid from which they draw their power.
But drawing power from the grid at least opens up the potential for driving on renewable energy, something the internal combustion engine is never likely to achieve except by burning biofuels of some sort, which still emit local pollutants. Through the grid an electric car can draw power from any source that feeds power into the grid. This could be coal, gas or nuclear, or it could be hydro, tidal, wind, solar, geothermal, gerbils turning wheels, whatever.
Given the spread of government mandates and private efforts by utilities to diversify the sources of power and to clean up their fossil-fuel-fired plants, we can expect the power on the grid to emit less pollutants over time. Not so with internal combustion. Over the long run, EVs probably are cleaner, even though most of the vehicles will essentially be running on coal for many years to come, because it's more practical to scrub the exhaust of a plant than to rely on individual vehicle owners to maintain their emission systems.
Grid load will be an issue, a major one in some areas. In a study done last year by McKinsey & Co. the researchers predicted that, at least in some markets, EV ownership will be concentrated in a few affluent neighborhoods. If the added load of charging electric vehicles leads to widespread brownouts, rolling blackouts or even just local interruptions in electricity service, their image as a benefit to society could suffer.
In some markets, the relatively low cost of electricity makes EVs attractive, especially if the price of oil rises back toward $100 per barrel once the global economy regains its footing. A surge of demand for electricity to charge cars could change that, driving up electricity rates. And once all the city and state governments pushing drivers to switch to electric vehicles see gas tax revenues fall, where will they get money for building and maintaining roads? Recapturing those funds through electricity rates would probably incite a political firefight.
Then there's the potential for random problems that come with new technologies and are particularly toxic for a technology seeking to replace a well-established one. For one morbid example, it may take just one well-publicized celebrity electrocution to turn opinion against EVs.
Most likely the introduction of electric vehicles will take hold in a significant way, especially in local delivery fleets, also some share of the mainstream vehicle market, but may be concentrated in urban areas. Most everyone can get behind a smarter use of resources and the shift to a more diverse mix of fuel and generation options.
The takeaway for distributors at this point is to get involved in what work there is, talk to your key suppliers, enroll in their training programs, keep your ear to the ground, and be ready to jump in. The technology is young (well, except for that part that's been around for more than a hundred years) so change-outs and upgrades may be fairly rapid early on. This will give distributors and contractors a significant argument for running more power to buildings in just about every sector of the market and an additional package of products for the quote.
There are different ratings for electric vehicle supply equipment (EVSE) for charging, according to the National Electrical Code (NEC):
- Level I: Weatherized 110V,15A three-prong outlet/plug compatible with the NEMA 5-15R grounded electrical outlet.
- Level II: Employs permanently wired EVSE operated at a fixed location. This equipment is used specifically for EV charging and is rated at less than or equal to 240VAC, less than or equal to 60A, and less than or equal to 14.4kW — and uses the coupler specified by SAE International's J1772 standard.
- Level III: This equipment is used specifically for EV charging and is rated at greater than 14.4kW.