Weaning the American road transport system off the gasoline pump through electrification—that is, developing affordable, fully capable battery-electric cars that plug into the utility grid—is widely seen as key to cutting carbon-dioxide emissions and foreign-oil imports. But it’s not for nothing that industry observers rank the difficulty of electrifying the automobile with that of the Apollo moon shot.
Overcoming the cost and performance shortcomings of current batteries while building a nationwide recharging infrastructure will at the very least require a considerable technological stretch, a good deal of timely government direction, and deft coordination with the electric utilities—not to mention a lot of money. And all four will be needed even before the majority of potential buyers can develop trust in this new personal transportation product.
Today, with billions of dollars in government aid on the way to automakers to fund the retooling of factories to produce EVs and other fuel-efficient vehicles, no one really knows how to solve these daunting systemic problems or who will pay long-term. But now there’s a plan—a rather complete one, in fact. It’s called the Electrification Roadmap and it delineates concrete steps that detail how proponents believe the U.S. could steer toward the electric avenue—one populated with so-called grid-enabled vehicles (GEVs).
“Our main message is that we need to set up what we call electrification ecosystems in selected geographic regions to speed adoption of GEVs,” said Robbie Diamond, President and CEO of the Electrification Coalition, a Washington, D.C.-based advocacy group that wrote the Roadmap (see: www.electrificationcoalition.org/index.php). “Establishing local ecosystems—focused electrification efforts with enough participants to enable significant production scale, say, 50,000 to 100,000 cars—is the only way to move past the early-adopter and pilot-fleet stages and get both the infrastructure and cars to come online in numbers at the same time.”
Diamond’s group proposes “an Olympic-type bidding process whereby all the stakeholders in the area have agreed to a complete set of installation plans.” The first winning ecosystems would “demonstrate proof of concept, drive consumer acceptance, and their initial learning-by-doing would suggest better approaches for the succeeding ecosystems.”
The Roadmap is the first policy statement from the Electrification Coalition, a nonpartisan education and advocacy organization that believes that U.S. dependency on petroleum imports threatens national security. The remedy, it holds, is to speed the nation’s transformation to electric power on the road. The coalition derives from the same folks—concerned (retired) military generals, industry executives, technocrats, and activists—behind the Securing America’s Future Energy (SAFE) pressure group whose national energy-policy recommendations received a good deal of Congressional and media attention in late 2008.
The Electrification Coalition and its Roadmap are offshoots of SAFE’s earlier efforts, Diamond said. “The first chapter of SAFE’s national strategy stated that there’s no way to solve our oil-dependence problem without electrification of the personal transportation system.
Right now, there’s no diversity of energy supply,” he continued. “Electricity could provide one unifying 'fuel' source, so we set up a new body to promote that goal.” Diamond said that by the spring of 2009 the activists felt that their recommendations were “getting lost among shorter, competing messages that are easier to sell. To make our case, we needed a deeper dive into the details of a practical policy vision to get us there.”
The coalition, which encompasses 501(c)(3) and (4) arms that are funded variously by major foundations and interested individuals, worked with the global management consulting firm PRTM to write the action plan. Before and as the Roadmap was written, the organizers “recruited aggressive, thoughtful, like-minded CEOs all along the electrification value chain” to serve on the board and provide guidance and comments to the Roadmap team.
The roster of coalition members includes leaders such as Carlos Ghosn of Nissan, whose Leaf electric car is slated to hit markets by year’s end. The other top executives represent A123 Systems and Johnson Controls-Saft (battery manufacturer), Coda Automotive (EV maker), Bright Automotive (hybrid van developer), AeroVironment and Coloumb Technologies (EV charging-station makers), NRG Energy and PG&E (power utilities), GridPoint (smart-grid-software company), Rockwood Holdings (chemical and materials supplier), Cisco (network provider), Kleiner Perkins Caufield & Byers (venture-capital investor), and FedEx (user).
To make the biggest change at the lowest public cost and with the least disruption, the Coalition prescribes an action plan with recommended steps in four major areas of concern: batteries and vehicles, charging infrastructure, electric power sector interface, and consumer acceptance.
“The question with batteries is: Can we bring down the total cost of ownership?” Diamond said. Only by expanding stationary uses for automotive-grade, large-format batteries can the nation develop enough market scale to reduce costs significantly, he maintained.
“And only by establishing a residual value for the batteries in a secondary market can we jump-start the market,” he said, adding, “Buyers must know they can get some money for batteries at the back end.”
The Coalition also advocates that government loan guarantees be extended to industry to retool auto assembly lines.
The notion of building a recharging infrastructure is based on the fact that most vehicles sit idly overnight at home, which provides potential consumers ample opportunity to charge a GEV on cheap, abundant, off-peak juice, explained OIiver Hazimeh, PRTM’s Director of the North American automotive practice. Many homes will require installation of a 220-V plug in the garage, but overnight charging will remain difficult for households that lack access to a dedicated parking space. To encourage GEV adoption, he advised rapid adoption of changes in building codes to promote installation of enough home and work charging units to overcome consumer range anxiety.
New Business Model Needed
Hazimeh noted that a profitable business model for public charging infrastructure has not yet been reliably demonstrated. Unfortunately, the only way for consumers to recover the battery cost is to defray it over time with cheap electricity. There is limit on what they will pay for public charging, so these issues will have to be addressed as well.
Many utilities will have to upgrade distribution-level transformers to ensure reliable service to homes and other charging locations. Along with investments in smart meters and charging software, the power sector will need to invest in IT infrastructure to support a range of smart-grid applications including GEVs. The utilities and electricity market retailers will need new rate plans to reliably serve GEVs. Regulatory reforms are also necessary. To facilitate deployment, “we have to incentivize the utilities by allowing them to alter their rate base structures to allow them to capture the capital costs related to car charging,” Diamond said.
Beyond performance and cost improvements to satisfy consumer expectations, “regulations governing electric vehicle warranties will need to be upgraded to provide similar warranty protection coverage to those of internal-combustion engines—100,000 miles or 10 years,” Diamond said.
If these and other steps are taken swiftly, synchronized deployment of new GEVs and infrastructure could occur on a massive scale, possibly making significant inroads into new light-duty vehicle sales between 2010 and 2020, according to the Roadmap.
“If the proposed measures are adopted, perhaps an additional 100,000 to 150,000 jobs could be created domestically by 2020,” Hazimeh estimated. By 2040, according to the vision, three-quarters of the light-duty vehicle miles traveled in the U.S. could be electric (rather than liquid fuel).