“The integration of electric vehicles onto the [electric power] grid is one of the greatest challenges that utilities, automotive manufacturers and consumers will face as we improve the current electric distribution system.” –David J. Leeds, senior manager of smart grid research, Greentech Media (GTM)
Obviously, there’s a lot of potential for all-electric vehicles (EVs) as well as hybrid-electric models to significantly help reduce the cost of truck operations in this country – largely for light- and medium-duty applications, at least initially.
[For an easy way to see why, watch the clip below, which describes how the U.S. military’s desire to boost fuel economy savings for its trucks helped bring the Hybrid Truck Users Forum (HTUF) to life.]
Of course, we’re still a long way off from making EVs and hybrids price-competitive on the front end, especially due to the cost and weight of the battery packs required for powering both types of vehicles.
And, along with battery issues, we’ve got the electric power grid to consider: can our nation’s current electricity generating capacity handle the power needs of a growing population of battery-fired vehicles? For hybrids themselves are getting “plug in” capability, so such vehicles can sidle up to a recharging station to keep their batteries primed at full, instead relying solely on their diesel or gasoline engine to do all the work.
For example, according to recent research by consulting firm IDC Energy, EVs will be commercially available in significant numbers by next year, and by 2015 there will be more than 2.7 million plug-in electric vehicles (PEVs) plugged into the global grid, with 885,000 PEVs in North America and more than 780,000 PEVs in Europe.
Unfortunately, Sam Jaffe, IDC’s research manager, told me by email that these vehicles will cause havoc on the distribution grid if they start appearing without any preparation by grid managers.
“PEVs represent a significant revenue opportunity for electric utilities, but they also bring challenges such as the potential of transformer overload due to PEV clustering and excessive energy ‘borrowing’ when vehicles roam outside of their utility region,” he said. “It is best for utilities to prepare for these potential pitfalls today, instead of waiting for when the trickle of PEVs becomes a flood.”
For example, he told me If three PEVs on the same cul-de-sac start charging at the same time, it could blow the step-down transformer. “That's a $20,000 repair job,” Jaffe explained.
Still, that concern aside, the demand for EVs seems to be growing in the commercial space. Just witness the recent rollout by Freightliner Custom Chassis Corp. (FCCC) of its new MT-EV all-electric walk-in van (WIV) at the 2010 HTUF meeting this week. Like a lot of other OEMs producing all-electric trucks – such as Smith Electric Vehicles U.S., among others – FCC believes fleets will be attracted to the fuel savings and microscopic carbon footprint such all-electric vehicles offer.
Yet light-duty EVs right now seem to offer the best opportunity for near-term growth within the U.S. commercial fleet sector, according to analysis conducted by research firm Frost & Sullivan, because out of all the EV models they offer the best fit in terms of life cycle cost and operational capability. They also, one should note, would place less recharging demand on electric utility infrastructure.
Yet Frost & Sullivan also noted that the opportunity for medium-duty EVs may increase over time if life cycle costs decline, range expands, and a national recharging infrastructure begins to take shape.
“In North America, trucks drive longer distances and there are far more rural areas, so this is why the light-duty EVs serving inner-urban delivery needs will really experience the most demand,” Sandeep Kar (at left), global program manager-commercial vehicle research for Frost & Sullivan, told me a few months back.
According to the firm’s EV study, entitled Strategic Analysis of the North American and European Electric Truck, Van and Bus Markets, by 2016, some 64,817 Class 2-3 light-duty EVs should be sold, in North America predominantly (3.5 tons or less GVW) configured as parcel delivery vans, small shuttle buses, etc. By contrast, only 26,635 medium-duty EVs (between 3.5 and 16 tons GVW) and 565 heavy-duty EVs (16 ton GVW or greater) are expected to be built and sold that same year.
Kar explained that 2016 may be the “inflection point” for commercial EV sales if purchase price, range, and life cycle cost demands are met. Right now, Frost & Sullivan’s research indicates the battery packs alone for EVs cost an extra $10,000 more than comparable gasoline- or diesel-powered trucks on the lighter side primarily due to the batteries.
“The incremental cost is the biggest barrier for large scale EV adoption,” Kar noted. “Also, every 4 to 5 years you need to change the batteries, adding to the life cycle cost of the equipment.”
He added that the range of light-duty EVs averages around 90 kilometers (roughly 55 miles), with EVs requiring 6 to 8 hours of battery recharge time. To be truly practical, they must yield an average range of 300 km (roughly 186 miles) and take 15 to 20 minutes to fully recharge.
“That cost of ownership is the crucial factor,” said Kar. “Our polling of fleet managers indicates 63% are focused on the total ownership cost, not the initial purchase price. So if the ROI can be fully realized, fleets would adopt these vehicles.”
For example, the average ownership cost for a gasoline or diesel-powered walk-in van varies between 25 and 48 cents a mile. If EVs can deliver an eight to 10 cent per mile life cycle cost, that hits the ROI target, Kar said.
“The biggest perceived barrier is still up-front capital costs [and] there are also some lingering concerns around infrastructure and service,” Bryan Hansel, CEO of Smith Electric Vehicles, told me via email. “That’s why we’re working every day … to dramatically shorten the time period it takes customers to receive a return on their initial investments.”
So if truck makers can do that – and the electric utilities can manage the power supply adequately – EVs and hybrids might witness increased demand from fleets. We’ll just have to wait and see.