NEMPA Panels Dig Into Green Vehicle Technology

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This week we attended the New England Motor Press Association (NEMPA)’s panel discussion on the future of green vehicle technology, California’s Zero Emission Vehicle mandate, and mass-market adoption of these technologies. It was a terrific, fruitful discussion. Two 4-person panels brought together expertise and opinions from automakers, energy research groups, electric utilities, and state politicians as they discussed the industry’s current strategies and what needs to change to increase the desirability and sales of Zero Emission Vehicles (ZEVs).

The panels had lengthy discussion, but a consensus was clear: Consumers need to be educated about this technology, and although the adoption of these vehicles might be slow, sufficient technology and infrastructure already exist and can be mass produced. There’s definitely enough material here for a very long discussion, but we’ll try to avoid turning this into a long-form essay.

In 2011, President Obama established the aggressive goal of bringing the U.S. Corporate Average Fuel Economy standard (CAFE) up to 54.5 mpg by 2025 by raising average new-car mileage by 5% every year from 2017 to 2025. When announcing the new standard, President Obama claimed consumers would see an average savings of $8,000 per vehicle in reduced fuel costs once it’s in full effect.

The new standards also look to reduce the U.S.’s fuel consumption, reliability on oil, and carbon footprint. This hugely important bit of legislation may completely change the auto-industry landscape in the decades to come, but nothing drives the shape of a market like inertia, and the automobile and petroleum markets are 120 years old. Changing those markets by a significant margin will take time, effort, and education.

As part of the effort to reach this new standard, 10 states (California, Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Vermont) have signed the California Zero Emissions Vehicle (ZEV) mandate, a program that requires automakers to dramatically increase the sale of ZEVs. The ZEV mandate calls for the sale of 3.3 million ZEVs in these participating states by 2025. ZEVs fall into one of three categories—battery electric, plug-in hybrid, and fuel cell electric or hydrogen powered—and 16 ZEV models are available in the U.S. now. By 2025, 1 out of every 7 vehicles sold in the U.S. will need to be a ZEV to meet the program’s goals.

The panel discussion at NEMPA centered around this mandate, the challenges the states adopting the mandate face, and the implications mass adoption would have on the automotive and power industries. Panelist Stephen Zoepf, a doctoral researcher at MIT and Operations Research Analyst for the U.S. Department of Transportation, brought up the general lack of awareness and understanding of ZEVs. Zoepf talked about owning a Chevrolet Volt and fielding simple questions about the car regularly with answers that often happily surprised the asker. Educating people about ZEVs and lowering customer acquisition costs could spread ZEV popularity beyond innovators and early adopters. Incentives could help drive this possibility, too, but as GM’s Director of Advanced Vehicle Commercialization Policy, Britta Gross, was careful to point out, these should be used only to incentivize the market, not stabilize it.

Of course, current ZEV technology isn’t as fresh as solar technology was in the 1990s. The Toyota Prius has been a success for 15 years, with nearly 5 million units sold worldwide. Combining that momentum with the billions of dollars getting invested in ZEV vehicles and technology could result in massive growth in adoption and make the mandate’s goals more realistic. Furthermore, many in the industry are beginning to look more closely at fuel-cell vehicles, which behave more like traditional, petroleum-driven cars: They can be refilled in a few minutes to provide a driving range of about 300 miles. Hydrogen fuel-cell vehicles could eliminate the range anxiety that’s hampering the growth of plug-ins today.

Panelists suggested that rather than stressing out about the feasibility of the technology, it would be more prudent to consider infrastructure challenges. As we mentioned earlier, the petroleum industry has been built over 120 years, and it will not simply disappear. More work needs to be done to determine how to break the potential bottleneck the grid creates. The infrastructure for charging electric cars is largely in place, but the last 50 feet—where cars actually connect to the grid—remains a problem. With most ZEV owners charging their vehicles overnight, at home, it’s crucial to bring residential utility providers and electricians on board.

The panelists made some interesting points about implications for other industries as well. Most notably, the mass adoption of electric and battery-operated vehicles will have significant influence on the utility and energy markets. The power grid currently sees a spike in usage from 4 pm to 8 pm and a valley in usage late at night. Many have made the claim that charging EVs will put a tremendous load on the power grid. This would be true if everyone charged their vehicle at work during peak hours, but most ZEV owners actually charge their vehicle at home. If those vehicles could be charged overnight, after peak hours, they could be “load levelers” and result in more balanced stress on the grid. Connected electric vehicles could also work as battery packs for homes during peak hours to reduce their need for grid power during peak hours.

Of course, this all assumes U.S. car sales hold relatively steady. Reducing the number of cars on the road dramatically could be another way to achieve some of the new CAFE standard’s goals. If car-sharing companies such as RelayRides, ZipCar, and Sidecar make a huge dent in car sales, that could significantly reduce the environmental impact of cars and our need for fuel. And a recent report by a Barclay’s Plc analyst suggests the arrival of shared self-driving cars could decrease car sales by up to 40% over the next 25 years. We’ll have to wait and see how things change, but panelists’ optimism and enthusiasm strongly suggest that automakers, with help from legislators and utilities, will make huge progress increasing efficiency and reducing emissions over the coming decades.

-jharrington and msmith

Do you think U.S. automakers will meet CAFE standards by 2025?

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