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Tipping Point

Industry giants start the EV revolution.

Fortnightly Magazine - June 2010

Nissan has no similar plans for the United States.

Ford also has no current product plans for vehicles with swappable batteries. McDermott takes the domestic stiff arm in stride.

“Remember, this is a reset for many in the industry,” he says, referring to the first, aborted attempt to build electric vehicles, often referred to as EV 1.0.

“Resistance comes from a variety of things, as basic as DNA—they’re slow to move and slow to change—all the way to very calculated commercial interests,” he says. “Certain companies will publicly tell you battery swaps and EVs have no future at all whatsoever, but privately, behind the scenes, they are furiously trying to catch up. In the meantime they’re trying to extract the maximum value from platforms they’ve already invested in, such as fuel cell, hydrogen and hybrids. They’re trying to milk those investments while they catch up, but EVs crossed the watershed about a year ago.”

Getting Customers to Care

In the United States, the battery-swap issue is precisely the type of question that will have to be worked out in the market. If a viable third-party ownership model ends up working for batteries, that solution could lead to V2G technology.

“Vehicle-to-grid frankly is farther down the road,” says SCE’s Craver. “We see the promise of it, but not enough work has been done to understand the impact all the charging and decharging has on the life of the battery, the most expensive component of the vehicle.”

If someone else owns that expensive component, however, and if they can resolve technical concerns about V2G applications, then EVs rapidly would become more functional and valuable ( see “ Dealing with Disruption–Electric Vehicles ). Effective inter-industry collaboration on standards in North American has created an EV market where meaningful competition on products and services is possible. Likewise, the utility industry’s growing need to engage customers in their electricity-buying habits might convince companies to invest more in EV-related infrastructure and marketing than they otherwise might.

“It will be interesting to see what dynamic will play out, because the vehicle is the most intimate appliance, the one customers care about the most,” says Duke’s Rowand. “It’s kind of hard to get customers engaged because they just don’t care that much about a refrigerator. But they care about their car. Ask anybody, they know what they paid when they filled up at the gas station last week.”

To the degree EVs help consumers connect the dots between their energy use patterns and the real-time cost of electricity, it could extend to the way they think about their entire energy profile and serve as a catalyst for utilities to deliver a new range of services.

“Will that awareness translate into the rest of the home?” Rowand says. “We definitely have an opportunity, especially in the early going. As people have a lot of interest and look for more information about vehicle performance, we’ll be looking at how we incorporate that into our customer communications, our energy efficiency programs, and our overall smart-grid communications with our customers.”

Automakers will keep