Car commercials invariably show drivers heading up rugged mountain roads with spectacular views of mountain ranges and lakes, or showcase urban streets crowded by skyscrapers. The reality turns out to be a lot more mundane. Rather than the open road, cars spend most of their time plying city streets while shepherding people to work, errands, gatherings, and as chauffeur service for transporting kids to a myriad of events.
How far do Americans really drive?
Typically, Americans drive an average of no more than 30 miles a day. Federal studies conducted over the last several years have shown half of auto travel consists of trips with a distance of 10 miles or less. Even with several trips a day, the total mileage driven each day is not much further than a Boston Marathon, give or take. For the majority of drivers in America, an electric vehicle is more than capable of their driving needs. Electric vehicles (EVs) are the ideal option for daily short-range travel. With the growth of public charging and increased battery capacities, they are increasingly able to handle longer trips as well.
Fear of running out of charge scares off many potential EV drivers as “range anxiety” instills concern that they will wind up stranded at the side of the road, or in a neighborhood where chargers do not exist, and they will have to wait for a tow truck to rescue them. Once drivers are acquainted with EVs, their comfort level and desire to buy one escalates. As a trusted service provider, utilities can play a crucial role in helping consumers understand the advantages of EVs and how battery technology works. They can highlight technological solutions that directly address charger issues, promote the societal benefits of EV ownership, and support government programs to encourage their adoption. After all, utilities have a vested interest in more transportation electrification as it represents one of the few surefire growth areas available to them.
Overcoming concerns about the battery
Questions about the durability of lithium-ion batteries that power EVs has become a concern for consumers. Typically, car manufacturers guarantee eight years or 100,000 miles. FleetCarma’s parent company Geotab, a leader in the fleet management industry, has created a battery degradation tool allowing anyone to chart the battery life of various EVs. Using data from over 6,000 EVs, they found on average battery life declines 2.3% annually. After five years, an EV with a 150-mile range loses roughly 17 miles of range, a prospect unlikely to impact an average consumer’s daily driving needs.
Most of the batteries studied had excellent health. “If the observed degradation rates are maintained, the vast majority of batteries will outlast the usable life of the vehicle,” said the report. Importantly, Geotab determined batteries do not degrade simply by sitting in a garage or on the street. Degradation does however occur more rapidly when using direct current fast chargers (DCFC) more than three times a month as, “These chargers add stress to batteries that eventually leads to lower performance.”
Once the batteries do degrade to the point when they are no longer viable, or once the vehicle is decommissioned, they can be re-purposed. Researchers at the University of California are utilizing old EV batteries to create a cheaper home storage solution, which could be implemented in conjunction with solar panels. This kind of data, and the reality of how EV charging occurs, should help overcome sales objections for people looking to buy or lease a new vehicle.
Electric vehicles are coming, are utilities ready?
Utilities should realize that whatever their alleged drawbacks, consumers have begun buying EVs at record rates. By 2030 more than half of all cars sold will be electrified vehicles (EVs and hybrids), according to Boston Consulting Group. Automakers have committed $300 billion to EV development and will introduce more than 100 models over the next three years.
Car companies are doing their best to alleviate range anxiety with new vehicles that have battery capacities nearly equivalent to a tank of gasoline. Many models have a range of more than 200 miles per charge. Even older EVs usually have ranges well beyond 100 miles a charge, enough for the majority of drivers daily range needs without plugging in.
Public fast charging stations, while important, may be less of an issue than originally predicted. Most charging occurs at home and more often at night after people return from work, leaving public charging to travelers and drivers who charge opportunistically. During FleetCarma’s study, Charge the North, it was found that 72 percent of charging occurs at home, a figure that has declined over the years but for an interesting reason: workplace charging, usually free, has increased. Between charging at home and work, most EV drivers have options that leave them rarely using public chargers. This is a clear benefit over internal combustion vehicles that need to be refueled at gas stations. A charging plug in a garage is a bit like having a gas pump available at all times.
The impact to utilities
Boston Consulting Group predicted in a report on electric vehicle charging that utilities would see new value if they prepared for transportation electrification by improving their transmission and distribution systems, supporting government EV policies and entering markets where they could own and manage charging infrastructure. While EVs may not significantly impact generation needs, they will create high levels of demand in specific locations which could increase infrastructural costs for utilities.
“Assuming that the market share for battery EVs ramps up from 1% to 15% from 2019 to 2030, we project that the required transmission and distribution upgrades will range from $1,700 to $5,800 for each electric vehicle that comes online, depending on when and where people charge,” the report said. New products, services, and charging revenue can recoup that investment, the authors suggest.
To capitalize on transportation electrification, utilities will require crucial insights into EV charging load. Utilities need to profile the EV charging load in their service territory, pinpoint areas of higher consumption or “clustering” on the grid, and translate that data into understandable summaries. With these utilities they can accurately forecast EV charging loads, allowing them to launch programs such as shifting charging to off-peak hours to help their customers save money while improving grid reliability.
Many utilities have been making infrastructural decisions off older reports that fail to take into account changes in vehicle performance and the nuances of their service territory. For example, suburban areas may have a higher penetration of long-range BEVs, which have a greater impact on the grid. Rural communities, on the other hand, will face different challenges. They will have to take into account not just their customer base, but the potential weekend vacationers and visitors arriving from larger urban areas in search of a charge before reaching their destinations.
Educating prospective EV owners
The road to EV adoption still faces hurdles. A 2020 Deloitte Global Automotive study showed 59 percent of Americans would like their next vehicles to have internal combustion engines. But more than half of the consumers in every other country in the survey – Germany, Japan, India, China, and South Korea – wanted a gas-electric hybrid or full EV as their next vehicle.
The same study revealed that the reasons consumers will consider hybrids and EVs largely stem from their reduced greenhouse gas emissions and lower operating costs. Those two features possess an overwhelming draw compared to rebates, social status, or vehicle brands.
Utilities should incorporate these findings into their marketing efforts. If clients care about air pollution, the environment, and leaving the planet in better shape for future generations, traveling by EV becomes a necessary strategy for rapid decarbonization. As renewable energy becomes a more significant portion of a utility’s generation, the argument for EVs becomes even more appealing.
Consumers for whom the environmental benefits of EVs will not play a convincing role, a different tact might work. EVs are much cheaper to drive. The equivalent charge of a gallon of gas costs roughly less than $1, depending on local electricity rates. There are fewer maintenance costs as well, since standard procedures such as oil changes and new spark plugs are no longer required.
Summary
Utilities have an essential role in advancing the adoption of EVs by serving as a dependable voice that can debunk myths and speak to broad benefits of transportation electrification. As consumers see the clear advantages to EVs, both for their pocketbooks and the environment, the market will only continue to grow. To ensure this growth is integrated efficiently and cost effectively, utilities need to take the lead.
