Cheap gas, regulatory uncertainties, and a technology revolution are re-making the U.S. utility industry. Top executives at three very different companies—CMS, NRG, and the Midwest ISO—share their...
Connecting vehicles to smart systems.
example, in an age of ever-increasing noise, this product introduces quietness. While the U.S. market is stressed by high pump prices for powering internal combustion engines (ICE), this product offers a dramatic reduction in operational cost. Regardless of one’s perspective on the issue of global weather changes, only a fringe few have ever written in favor of gas engine emissions. With awareness of the merits of reducing greenhouse gas (GHG) emissions becoming more widespread, this product contributes to the solution. And apart from requiring new consumer behavior relative to vehicle charging and range, it operates just like any other automobile and, therefore, is likely to have excellent market prospects.
EVs do carry a cost premium, but paying a higher price for new technology is the role of product enthusiasts. For the EV, it can rely upon automotive technology enthusiasts as well as environmentally conscious customers across all automotive market segments. From market studies, the consumer product is highly appealing to a younger, digitally-connected market. The prospective EV buyer is more likely to have a smartphone and be aware of the multiple ways that information can be available—in the vehicle, on a smartphone, or on a PC at home or at work. The EV buyer is also likely to live geographically close to other EV buyers. Such geographic intensity resulting from market clustering complicates the supply model for utilities and other energy service providers (see Figure 1) .
In the commercial market, the lower total cost of ownership has widespread appeal and is complemented by momentum toward certified compliance of GHG emissions for commercial vehicles, as well as several other benefits important to fleet managers (see Figure 2) .
The careful reader would no doubt catch a key assumption—that the need to change behavior and accommodate range limits will impose little drag on market adoption, among both individual drivers and fleet managers.
The main functional difference between EVs and gas or diesel vehicles is the distance a driver can travel before refueling— i.e., the vehicle’s range. This has given rise to a condition branded as range anxiety. This anxiety, whether rational or irrational, rises from a fear of the unknown and unfamiliar need to calculate distance against the charge required for the vehicle to reach a destination. This can be emotionally interpreted as the fear of being stranded on a dark road.
Human behavior is conditioned by routine; people have come to expect to reach a destination, irrespective of the fuel gauge’s reading at the outset, because an ICE vehicle can be rapidly refueled just about anywhere. Even after level-3 fast chargers become widespread, the dynamics of distance for the EV will require consumers to adapt their behavior.
When considering how to address range anxiety, a vehicle ICT system, internetworked with other ecosystem ICT environments, offers a solution and demonstrates the power to make a market. It also shows the way forward for ongoing activity among the various participants of the EV ecosystem, because ICT capabilities will vary depending on the characteristics of different EV powertrains.
Moreover, different types of