by Brett Williams
In “Managing EV Expectations,” I tried use a few facts characterizing the early markets for plug-in electric vehicles (PEVs) to clear up some of the misconceptions about how well, or not, the commercialization of PEVs is going. Since that time, dramatic (perhaps unsustainable?) price cuts in the Nissan LEAF and odds-exceeding performance by startup Tesla have injected additional adrenaline into PEV markets. With the success of these two all-battery models making the first half of 2013 shape up more like 2011 than the plug-in-hybrid dominated 2012, it may seem an odd time to focus on the latter, more “incremental” product category, which lacks the “beyond oil” glam motivating certain hard-core PEV early adopters and market movers. But I believe there is still an underlying market dynamic that is both worth understanding and worth capitalizing on for those truly interested in maximizing the penetration of electric-fuel vehicles and the benefits of their use. So I am going to go out on a limb in a series of related blogs, and see if I like the view or not.
To start, below are a few thoughts adapted from comments I made at the Interagency Working Group Forum on the California Zero Emission Vehicle (ZEV) Action Plan, hosted by the Silicon Valley Leadership Group on 6/7/13.
First, a little bit of background [which, along with various aspects of this blog, I plan to expand over time]:
The electric vehicle market consists of two major types of electric vehicles or “EVs”: all-battery EVs—like the Nissan LEAF and Tesla Model S—and plug-in-hybrid EVs—like the Chevy Volt, Prius Plug-in, and Ford Fusion Energi. Plug-in hybrids have gasoline engines that seamlessly kick in whenever the vehicle runs low on electric power, giving those vehicle 400–600+ miles of total range. This makes them a smaller, safer step for consumers to take away from conventional vehicles. To date, 60% of the U.S.’s more than 100,000-vehicle EV market is plug-in-hybrid EVs. Even in California, which tends to buy a greater proportion of all-battery EVs than the nation as a whole, the percentage of plug-in hybrid EVs was ~59%, based on vehicle registrations I’ve analyzed through the end of 2012.
A Recommended Approach for Public Support of Electric Vehicles
Accordingly, I think this is a point in history when it is ok, indeed desirable, for policy- and decision-makers to focus on the plug-in hybrid as the unit of analysis. Before I go any further, let me just say upfront that I believe we can and should do this without losing sight of the commercialization of pure zero-tailpipe-emission vehicles (ZEVs), which we’ll need in increasing numbers to meet pressing environmental and energy challenges. Indeed, I personally have put over 10,000 miles on Toyota fuel-cell Highlander prototypes—some of the best driving I’ve ever experienced. I also was on the waiting list for, and tried to buy, two different all-battery EV models just before I moved to sprawling LA with a ridiculously long commute. Further, I am doing some evaluation of DC fast charging in California, a technology not needed by plug-in hybrids.
Nevertheless, I think lessons from innovation tell us to seriously consider innovations with continuous, rather than disruptive, origins. The time is now for public policy to refocus on foundational solutions with low adoption hurdles, such as plug-in hybrids and infrastructure adequate to support them (e.g., low-power, multiplexed charging).
Supporting plug-in-hybrid EVs also benefits pure ZEVs, but not necessarily the other way around. So I am encouraging a “common-denominator” or “rising-tides-lifts-all-boats” approach to policy design. Rather than policies that effectively try to cover all premium charging desires of every Tesla and LEAF early adopter, we need to design policies and strategies that provide a lot of people access to a little bit of charging—I call this “power for the people” [more on this later as well].
Once you give drivers a minimized-risk, minimized-effort, and, under normal market conditions, minimized-cost opportunity to try out plugging in their lives, a very problematic “unfamiliar/disruptive-innovation” Catch-22 that is standing in the way of the widespread adoption of plug-in vehicles is overcome. And once you get people in the plug-in-vehicle market—get them plugging in or refueling in novel ways and exposed to the fun experience that is electric drive—you’ve given them a low-cost hit of a gateway drug to pure ZEVs. I think they are going to want and demand purer ZEVs (and premium charging services) and will be ready for the upsell. And larger and more rapid market growth will happen naturally based on private willingness and ability to pay, reducing the need for public support.
Further, the initial step will not only require less behavioral change and anxiety on the part of the majority of consumers, but can be supported by sparser, cheaper, more highly utilized infrastructure with lower grid impact.
Together the financial, behavioral, and other costs are minimized in what I call the “Path of Least Resistance” approach. It works for all-battery EVs too, by the way, and is organically scalable.
The Path of Least Resistance sets up a nice Zen Koan for sustainable transportation policy: by taking a smaller step we will cover more ground on our way to reaching the State’s aggressive goals and solving its daunting challenges.
by Brett Williams