Electric utilities have had decades to prepare, at least mentally, for the day when electric vehicles (EVs) would become a reality. That day has finally arrived, but I believe most utilities are falling into traps that are hindering rather than helping the market evolve—and therefore benefit utilities.
First, many utilities, as well as technology companies, are trying to make EVs something they’re not. The thinking goes, “If we have enough charging stations, and fast-enough charging, people will buy and use EVs.” But pure EVs, such as the Nissan Leaf, aren’t, and shouldn’t be, today’s absolute substitutes for their gas-powered brethren. Instead, these vehicles excel in city and suburban stop-and-go environments, where gas cars stall. Gas cars love to go a steady 60 miles per hour on the freeway, where they can achieve a mileage that’s nearly twice what it is on city streets. So utilities should stop trying to make it easy for EV drivers to get around town—or worse, across the state or country. Let EVs do what they’re good at: providing ultra-efficient travel for 90-plus percent of everyday driving. Better Place, the well-funded venture that designed fast-charging and battery-swapping infrastructure, certainly found this out in a big way with its bankruptcy filing last year. Its business model was probably too much ahead of the market.
Second, some utilities, as well as some regulators and strategists, are trying to make EVs part of the utility infrastructure from day one. As we’ve seen through the vast development of software applications in the wake of Apple’s slick technology, I think we would benefit from letting the market evolve organically and see what EV users end up wanting and needing. For example, Nissan and other auto companies assumed that people needed and wanted 220-volt charging. This was just plain wrong. People are perfectly happy charging on their 110-volt household plugs (and saving the $1,000 cost of putting in higher-voltage equipment), and they rarely charge at work or while shopping. We also keep hearing about how these EVs will become the new storage medium to balance utility loads. But again, let the market develop before creating premature complications.
Third, utilities and auto companies are promoting EVs in awkward ways. Nissan’s early ads, while wonderful for tree huggers, failed to focus on the amazing benefits of EVs to drivers. There are three key messages that I believe would open up the market in a big way:
- Drive for the equivalent of $1 a gallon. People drive around town looking for a gas station that will save them 5 cents a gallon. Why not tap into that theme? It’s not a 5 percent discount, or even a 10 percent discount. It’s a 75 percent discount—every day.
- It’s fun to drive—really fun! I am admittedly not a sports car owner, but driving the Leaf is an amazing experience. My wife now looks forward to her cross-town commute. On weekends, we fight over who gets the car. The thing accelerates without pain or noise—and it’s fast.
- You never have to go to the gas station. Although there may be some nostalgia for the gas stations of yore, today’s fill-up experience is tedious, dirty, smelly, and a bit awkward in a nice business suit or dress. Convenience is a powerful sales tool.
By using these promotional messages, the notion that there needs to be price parity with gas cars may be diffused. People still buy Saabs and BMWs because they’re fun to drive. And I believe that people who buy EVs for environmental reasons will continue to do so. But for those in the know, the benefits of EVs are quite obvious.
Finally, I believe that utilities need to be promoting the heck out of these vehicles. We’ve heard statements like “oil companies don’t promote gas vehicles.” Well, they don’t have to. But they sure did back in the ’50s. The whole driving “experience” was a mainstream focus of ads, TV shows, movies, and the American psyche. EVs need utility support. This is the best new electric load we’ll see for 50 years. This is the air conditioner on steroids, without the coincident peak automatically built in. Drive off-peak charging through aggressive rate design from the start, and get people used to it.
The first word in “electric vehicle” is “electric,” so the provider of that electricity needs to be in the game, promoting the technology in the marketplace, using the cars for fleet vehicles, and—in essence—making EVs a mainstream product.