Oasis Charger Corporation EV Market Update

This week, we report on a warning from the CEO of Siemens on the impact on automotive jobs from the transition from the internal combustion engine (ICE’s) to electric vehicles (EV’s).  A number of related stories from automakers upping their commitment to electric vehicles (EV’s) and another potential breakthrough in battery technology.  We also discuss plans underway to re-use the millions of batteries that will come off cars in a variety of thoughtful and interesting ways.
 
The Fourth Industrial Revolution.  Siemens Global Chief Executive, Joe Kaeser, has called the transition from ICE’s to EV’s “one of the single most important transformations of all time”.  Calling on automakers to manage that transition responsibly, Kaeser warned that up to a third of automotive jobs could be lost in the short run;  with many fewer parts in an EV (particularly from the engine and transmission), “if you have 20-30 less value chain, then … you have 20%-30% fewer jobs.”  As with prior industrial revolutions, the ultimate impact will be to create greater growth and more jobs but governments and industry leaders will need to establish programs to retrain workers for the new economy or risk social disruption. The Guardian ("Businesses must address impact of next industrial revolution, says Siemens boss".)
 
BMW Ups the Stakes on EV’s:  Over the past few months, a number of automakers have announced increased investment in EV’s.  Two weeks ago, Jaguar announced it had increased its investment in EV’s to $18 billion.  Now BMW has announced that it believes EV’s will account for 25% of its sales by 2025.  Reporting that EV sales are up 46% at the car maker from last year, BMW has announced it will be launching 25 new EV models over the next seven years.  The EV’s will all share its 5th generation architecture for EV sedans, SUV’s and hatchbacks.  CarBuzz ("BMW Records Huge Increase in Electrified Car Sales".)  Tesla has had the luxury EV market to itself, but as other car makers ramp up their offerings, PA Consulting predicts that by 2021, Tesla will have fallen to seventh place with Daimler taking the lead.  Bloomberg  ("German Electric Cars Could Catch Up With Tesla in Just a Few Years".)  And to wrap up BMW related news, it announced the launch of the all-electric Mini for 2019. CarBuzz ("The Electric Mini Is Coming Next Year".)

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More Battery News:  We have discussed the enormous investments made in developing better batteries for everything from cell phones to EV’s.  The University of Maryland, in a joint project with the Brookhaven National Lab, has announced a breakthrough using iron trifluoride as the material for the battery cathode.  Without getting into the science, they claim that they are able to generate 2-3 times the energy density of a current Lithium Ion battery.  Green Car Reports  ("Iron trifluoride could make better electric-car batteries".)
 
But What to Do With All These Batteries?:  The industry is starting to consider what to do with all the batteries once future EV’s reach the end of their life?  While a battery may no longer be useful to power an EV, it is still able to provide power for another 7-10 years.  A number of automakers (who are ultimately on the hook for these batteries) are working on projects to combine these batteries to provide backup power to the grid and provide power storage for renewables like solar and wind generation.  Bloomberg estimates that this may become a more than $500 billion business by 2050.  Bloomberg Business Week ("Where 3 Million Electric Vehicle Batteries Will Go When They Retire".) 

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Oasis Charger Corporation EV Market Update 060818

China’s Plans for an International Power Grid

We have previously discussed the fact that China is aggressively pushing for leadership in the electric vehicle (EV) market, with over 50% of EV’s globally in China.  Part of that is out of necessity.  If you have visited Beijing, Shanghai or Hong Kong, you have experienced first-hand the yellow, sulfurous haze that chokes the air for most of the year.  Part of that is also a long-term plan to become the Detroit of the 21st Century. 

Another expression of China’s long-term economic perspective is its plans to create an inter-continental electric power supply.  The most efficient electric storage “battery” is a dam and China has been building dams through Western China and South East Asia, especially in countries like Laos.  As a result, there is a glut of potential energy stored in locations far from where that power is most needed—the East Coast of China.  China has been connecting dams to power users thousands of miles apart using ultra high-voltage cable technology (UHV) allowing power to be transmitted cheaply over large distances.  Backed by China’s President as a national strategy, China is attempting to build an international power grid.  While this is clearly designed from a commercial perspective, China also sees the soft power implications of supplying a product that is a necessity to so many people. 

China’s state power company, State Grid, is leading the effort, in conjunction with other arms of the Chinese government and industry.  Chinese companies have built or purchased power transmission infrastructure in 83 countries across Latin America, Africa, and Europe, totaling $102 bn.  The addition of loans from Chinese companies brings the total to $123 bn.  Add up all the power related investments overseas in both grid infrastructure and power plants and the total reaches $452 bn over the last five years alone.  The vision of State Grid is an interconnected “internet” power grid with, for example, power generated by a hydro facility in the Congo and delivered to Europe at less than half of the cost of current domestic power generation.  It is a grand vision with a number of technological, political and environmental barriers.  However, China has enormous experience with large infrastructure project and project planning on a large-scale.  It also has the technological lead over Western competitors with UHV transmission.  It also has the backing of China’s President and access to enormous financial resources including China Development Bank and the Export-Import Bank of China.  Financial Times (subscription required: “China eyes role as world’s power supplier”.)  

Solid State Batteries (a continuing story)

Moving from Chinese innovation to US innovators, we have on a few occasions discussed the potential breakthrough in battery technology represented by the promise of the solid-state battery.  The indefatigable 95 year old chemist and the inventor of the lithium-ion battery, John Goodenough, whose name alone must present one of the greatest (and probably the only) ironic jokes in chemistry, published a paper in the Journal of the American Chemistry Society with the catchy title “Nontraditional, Safe, High Voltage Rechargeable Cells of Long Cycle Life.  JACS (“Nontraditional, Safe, High Voltage Rechargeable Cells of Long Cycle Life”.)  While the title might not be the most exciting in the world and to spare you the delight of reading the actual paper, we have summarized the main claims for their battery breakthrough:

Solid State: no liquid electrolyte which is responsible for the fire hazard of lithium-ion (i.e. why you can’t leave lithium-ion batteries in your checked luggage);

Greater Energy Density: More storage capacity and faster charging times;

No Cobalt: Necessary to liquid lithium-ion, this expensive metal has all but been cornered by the Chinese and its price has increased exponentially;

23,000 Charge cycles: vs. circa 1,000 for current rechargeable batteries.  The battery would outlast the car.  Interestingly, the capacity of the battery improves over cycles (the opposite of every other rechargeable battery)

Perhaps just a brief quote from the paper to whet your appetite:

"A slow motion at room temperature of the electric dipoles in the Li+-glass electrolyte increases with time the electric field across the EDLC of the anode/Li+-glass interface to where Li+ from the glass electrolyte is plated on the anode without being replenished from the cathode, which charges the Li+-glass electrolyte negative and consequently the glass side of the Li+-glass/plasticizer EDLC."

It seems that Chemists are not big into punctuation.

Of course, there a number of skeptics questioning these findings.  It is unclear from the paper if the battery is able to retain its charge once unplugged (that would be a problem).  The paper’s claims represent the highest ever recorded energy levels stored in a material.  It also seems odd that the capacity of the battery would improve with the number of charge cycles.  AXIOS (“1 big thing: Demand signal for self-driving”.)

John Goodenough, who is still revolutionizing battery storage at 95:

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$1.29 bn Investment by California, New York, and New Jersey

With the EPA trying to hold back the tide, King Canute style, and boost coal production, King Coal style, many states have decided to take the initiative to move away from the internal combustion engine (“ICE”).  Apart from filing various lawsuits against the EPA, California has also announced a $738 bn investment in projects that promote EV’s, including charging infrastructure.  Not to be outdone, New York and New Jersey also announced a combined $550 investment program of their own in electric charging stations.  CNET (“California, New York, New Jersey make a $1.29 billion investment in EVs”.)

It is likely that the inflection point for EV’s over ICE’s will come when the price for an EV, without state and federal incentives and tax breaks, falls below ICE’s—generally predicted to be around 2023-25.  However, if you talk to people who own an EV, what you come away with is that they are simply a better technology.  With only a few moving parts they do not require the regular trip to, and cost of, a service center.  With a low center of gravity and the acceleration of a sports car, they are fun to drive.  And with no engine or transmission hump, they offer designers a revolutionary design opportunity.  For example, the much-anticipated Jaguar electric SUV—the I-Pace—has the external dimensions of a Porsche Macan but the interior space of Jaguar’s current largest car, the long wheelbase version of the XJ Sedan. ARS Technica (“Change like we’ve not seen in decades”—high-end auto designers go electric.)

The Jaguar I-Pace SUV:

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This all leads us to see a near future where you may plug your Jaguar I-Pace into a US made charger, in part funded by the State of New Jersey, located along a German autobahn, to recharge a battery designed at the University of Texas, using a payment software written in Singapore, and drawing on electricity generated at a hydroelectric dam in Laos, which was built and financed by the Chinese government.  As President Trump heads to a likely contentious G7 summit in Canada, hopefully someone is explaining to him that trade policy “can be complicated!”

We always like to end the newsletter with a bit of car bling.  This week, Maserati finally announced they were jumping into the EV revolution. While the Alfieri was first announced as concept in 2014, Maserati’s CEO surprised the market with an announcement that the Alfieri would be all electric:

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Oasis Charger Corporation EV Market Update

In this week’s review of electric vehicle (EV) and charger news, we continue to see large strategic investors moving into the space, seeking to hedge their business model or looking to profit from the changeover to EV’s, by investing in charger companies, battery companies and utilities.  As the 80-year dominance of the internal combustion engine (ICE) is disrupted by EV’s, we are seeing a surge in innovation as designers and entrepreneurs are liberated to think “out-of-the box (and four wheels)”—this week, motors in the wheels.  Related to the disruption story, we are also seeing push back from the businesses whose revenues are threatened—this week, the oil industry.  We finish with a bit of history and the EV/ICE battle that took place in the 1920’s for dominance of the personal transportation industry with an interesting conclusion on why ICE’s won the battle for personal transportation.  

BP Buys UK Charge Company.  Following Shell’s lead earlier this year in investing in a UK charger company and a utility, BP has bought the UK’s largest electric vehicle (EV) charging company, Chargemaster.  BP plans to roll out the company’s chargers across its 1,200 UK gas stations. Financial Times ("BP/electric cars: chickens and eggs".) The initiative by Shell and BP to invest in EV chargers is part of a response to an electric future where their major sources of revenues are shifted to utility companies. A future where the majority of refueling occurs at home and the office, with a top off or two at the supermarket or movie theatre, is also a major threat to the gas station convenience store model where profit margins are much higher and more stable than on the sale of gasoline.

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Electric Wheels.  As we have pointed out before, EV’s represent a major technological shift in the automobile industry. The revolution that EV technology represents has unleashed design creativity and spurred further innovation.  A number of companies are working on incorporating the electric motor into the wheels and in doing so, reducing mechanical complexity and frictional loss (from the drivetrain), increasing further the amount of room available for cabin and storage space, and improving car handling. IEEE Spectrum ("Protean Electric’s In-Wheel Motors Could Make EVs More Efficient".)

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While there are a number of issues to resolve for this type of technology, it is yet another example that the cars we drive in the future are going to bear little resemblance to the cars we have been driving for the past 80 years.

Oil Industry Push Back.  In a recent piece on CNBC, former EPA Administrator and Republican Governor of New Jersey, Christine Todd Whitman, lambasted oil industry funded studies questioning the environmental efficacy of EV’s.

"Here’s the bottom line: transportation electrification is a really good idea, and electric vehicles are a superior product. That’s why they will replace the internal combustion engine."

In the article, she makes a number of the points about the benefits of EV’s that we have written about in prior pieces.  As she points, out EV’s are 3-4 times more energy efficient than ICE’s and emit no particulate matter.  Already, the relative costs of building new fossil-based power plants have made them uneconomic and, as the grid continues to move from fossil-based fuels to renewables, the benefit of having the entire transportation system move with that creates a multiplier effect on reducing carbon emissions.  CNBC ("Oil industry is 'peddling misinformation' about electric vehicles".) 
 
The fact that the oil industry is funding misleading reports should be of no surprise.  Similar to the tobacco industry funding medical research in the 1960’s and 70’s to refute the cancer risk of tobacco, challenges to the status quo always create a reaction and the more revenue at stake, the greater the reaction.

Déjà vu all over again.  An  interesting article about the early days of the automobile, when EV’s outsold the ICE and Ferdinand Porsche was putting generators into the wheels of cars (see story above).  That article makes the point that, for more than three decades, there was no clear winner in the technological fight between EV’s and ICE’s.  Until the 1920’s, the US’ largest automobile maker was the Electric Vehicle Company.  Interestingly, the article points out that EV’s lost the fight not because of a technological preference, but because EV makers misread American’s financing preferences.  While ICE company’s focused on selling cars, electric car companies were pushing a lease model.  This was occurring at a time when Americans were adopting a culture preference for personal ownership.  Quartz ("Early-1900s EVs were marketed to women because gas cars were too complicated".)
 

Paul Vosper
pvosper@oasischarger.com
+1 (929) 777-0093
 

Oasis Charger Corporation EV Market Update

Release Date: 06/25/18

In this week’s roundup of Electric Vehicle (EV) news, we focus on the continued promise of better batteries, the excitement building around the launch of Jag’s new all electric SUV, the I-Pace, Uber jumping into urban electrification and how batteries are effecting the future of electricity.
 
Battery news:  Batteries are, in our mind, the critical piece of the EV tech puzzle.  Not only is battery price the key variable in the ultimate sales price of an EV, improving energy density, fire safety, charge times and the number charge cycles the battery can handle are key to the attractiveness of EV’s to the consumer.  In the last 12 months, there has been a huge uptick in investment in batteries by both VC firms and automakers.  The latest piece of news is that VW is investing in QuantumScape, a solid-state battery startup that was spun off from Stanford.  There has been promising news that solid-state batteries have significantly faster charge times and can store 2-3 times the amount of energy of a traditional lithium-ion battery, last for over 23,000 charge cycles and have none of the fire risk of the current batteries.  However, no one has been able to show that they can take prototypes into mass production levels.  VW seeks to bring its expertise in production to scale up the production of QuantumScape’s batteries with a target production date of 2025. electrek  ("Volkswagen becomes latest automaker to invest in solid-state batteries for electric cars".)
 

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EV car news.  The excitement around the launch of the Jaguar I-Pace, an all-electric SUV, is bordering on hysteria.  Petrol heads in all the major car review publications are raving about its handling, acceleration, interior, spaciousness and quietness.  Elon Musk has been successful in marketing the Tesla range of cars but has burned through billions of dollars and can barely produce 100,000 cars per year.  As one reviewer put it: “[t]hank you very much, Elon, for setting the table. Now, while you build tent city factories and pick stupid Twitter fights, the OEMs and their supply chains that reach to Jupiter and back are going to eat the food right off your plate.”  It seems that Jaguar is first of the OEM’s to the table.  As we have mentioned before, consumers won’t buy EV’s just because they are green.  They will buy EV’s because they represent a superior technology to the internal combustion engine (ICE).  By the way, the I-Pace is $15,000 cheaper than the equivalent Tesla X.

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Uber moves toward electrification:  Uber has launched a yearlong pilot program to provide incentives for its drivers to switch to EV’s, targeting 5 million trips in the next 12 months. “We see the writing on the wall,” Adam Gromis, Uber’s head of sustainability, told the Los Angeles Times. “Unless we can be delivering a more efficient form of mobility, we won’t be providing a good solution that cities need. That’s why we’ve gone into bikes. That’s why we’re working with transit. That’s why we’re focused on electrification.”

Colorado joins the battle against the EPA.  Colorado has joined the 12-state consortium that follows California’s air quality rules rather than the federal EPA.  Under the Clean Air Act, California was allowed to set its own standards.  Other states can either follow California’s standards or the looser federal standards, but they cannot establish their own standards.  Colorado, a traditional pro-coal mining and oil state, made the move in response to the EPA’s May announcement that it intends to loosen the fuel economy standards set by the EPA under the Obama administration.  Of the states that follow California, 9 also follow its target for zero emission EV’s.  Given the car buying market those 9 states represent, that mandate is one of the reasons EV’s became an established option.  It is not yet clear whether Colorado will also follow California’s zero emission targets, but it has been one of the states that has provided an integrated plan to developing charger infrastructure.  https://www.greencarreports.com/news/1117312_colorado-moves-to-follow-californias-low-emissions-air-quality-rules

Half of electric production will be from renewables.  A couple of weeks ago, we discussed the report from Bloomberg New Energy Finance (BNEF) predicting that 50% of new car sales would be EV’s by 2050.  In a new report, they predict that half of world’s electric production will be from wind and solar, largely driven by the advances in battery storage ability and falling costs for batteries.  Successfully linking battery storage to renewable production allows utility companies to better manage grid demand and reduce the need for backup power generation from carbon-based fuels. “The future electricity system will reorganize around cheap renewables," said Elena Giannakopoulou, head of energy economics at BNEF.

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Oasis Charger Corporation EV Market Update 060118

Release Date: 06/01/18

New Bullish Forecasts on EV Sales.
A lot of important news in the electric vehicle market this week.  Top of my list, is a new report out by Bloomberg New Energy Finance (BNEF) predicting a 20-fold increase in electric vehicle (EV) sales by 2025, reaching 55% of new car sales by 2040.  This would mean that by 2040 about a third of the cars on the road will be powered by battery—displacing about 6.9 million barrels of oil per day.  Importantly, they forecast that battery costs will fall to $70 per kWh by 2030, well below the $100 per kWh that analysts equate to the point at which the price for battery operated cars falls below the internal combustion engine (ICE).  For comparison, battery costs in 2010 were $1,000 per kWh.

One note of caution that caught our eyes: they predict a tapering of growth in EV sales in the mid-2020’s due to the fact that the charger infrastructure may not be able to keep up with this growth (the other factor potentially slowing growth being potential shortages in key minerals such as cobalt). Bloomberg New Energy Finance ("Electric Vehicle Outlook: 2018".)
 
The International Energy Agency (IEA) also came out with predictions on the growth of the EV market this week.  They believe that there will be 125 million cars on the road by 2030 (circa 10% of all cars).  They claim that the number could be double that if countries take a more aggressive and proactive approach to climate change and reducing air pollution.  CNBC  ("Electric vehicles will grow from 3 million to 125 million by 2030, International Energy Agency forecasts".)  An example of that latter point is Norway, with strong tax incentives for EV’s, where EV’s accounted for over a third of new car sales last year. 

Axios and Survey Monkey released a poll this morning on consumer attitudes to EV cars.  It shows that 23% of respondents are “somewhat likely” to purchase an EV car as their next car, with 14% “extremely likely” to make that purchase.  This is largely consistent with the AAA’s survey we discussed in the May 11 blog.  That survey found 20% of consumers are likely to buy an EV as their next purchase.  EV sales currently run at around 1% of new car sales.  These survey numbers (quoting BNEF’s Salim Morsy from BNEF)  “… actually tell us that, given the level of education of the market as it is now, there is still quite a lot of space to grow for electrification.”  

The Axios/Survey Monkey poll also gives some interesting data on the consumer hurdles to purchasing an EV, breaking down the reasons why 62% are “unlikely” to purchase an EV as their next car.  Nearly half of respondents cite lack of charging stations as the reason why they are unlikely to purchase an EV and 41% citing initial cost. AXIOS ("Exclusive poll: Electric cars show growth potential despite doubts".)  These numbers are in line with the EV sales growth predictions and findings by BNEF, the IEA and others—the initial cost concerns will largely disappear as battery costs continue to fall with the main issue being whether the charger infrastructure can keep pace with the growth in the EV market.  Interestingly only 9% mentioned range as an issue, which indicates that the automakers view that circa 250 mile range vehicles are a suitable standard is right.

While we continue to see bullish forecasts on the EV market, one note of caution from several surveys about the attitudes of salespeople in dealerships in the US, China, and in the Nordics to EV cars.  These reports show salespeople discouraging consumers from buying EV cars.  One of the surveys from Consumer Reports, however, found that, where the automakers have made a big investment in EV cars, dealers were more likely to support EV sales.  Green Car Reports ("Car dealers push buyers away from electric cars worldwide, not just U.S., studies find".) The results of these surveys are not altogether surprising given the challenge that EV’s pose to dealership economics.  Margins on new car sales are pretty slim and dealerships tend to make more money in the service department.  With their relatively low maintenance requirements (anecdotally there are early Prius buyers who are still on the first set of brakes after 70,000 miles), EV’s pose a challenge to the auto dealer’s profits.
 
More News on Solid State Batteries
An important announcement out of Woburn, Massachusetts—the Detroit of the EV market?  A report in Wired claimed that Ionic Materials has developed a solid state battery that can withstand higher temperatures and offers higher capacity.  While a number of companies have claimed breakthroughs in solid state batteries, they have stumbled in creating a battery that remains stable under charging and discharging and can be scaled to production levels. Green Car Reports  ("Battery tech may be getting a big solid-state boost soon".)
 
Oil Prices—the end of “lower for longer”?
Bloomberg reports that some options traders are betting on $100 oil over the next 12 months—equivalent to circa 93 million barrels of oil.  Crude oil futures have also hit 3-year highs with December 2020 crude hitting $70 a barrel, signaling that the period of “lower for longer” oil prices may be at an end.  Bloomberg.com ("The $100 a Barrel Oil Wager Comes Back to the Options Market".)

We love to showcase some interesting early runs at the EV market.  Mike Corbin, whose name will be familiar to those who ride motorcycles for his saddles, designed a bubble electric car in the 1990’s.  The Corbin Sparrow had a 40 mile range, a 26-hp electric motor that could go 70 mph and cost $14,000:

 

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Oasis Charger Corporation EV Market 052518

Release Date: 05/25/18

Chevy Bolt in Short Supply
The Chevy Bolt has been a big hit for General Motors and demand seems to have caught the automaker somewhat by surprise as it further gears up production.  In a sign of just how popular, GM dealers in Canada are quoting 8-12 months waiting times for the 238-mile range EV. Green Car Reports ("Shoppers in Canada may wait nearly a year to buy new Chevy Bolt EV".)
 
Automakers React to the EPA
As we have discussed before, automakers have been less than thrilled with the EPA’s decision to roll back emission standards fearing a fragmented market with different standards state-to-state. The consulting firm, ICF, meanwhile believes that: “the [Environmental Protection] Agency’s about-face is not likely to have an appreciable impact on the long-term transformation that is already underway…”.  Driven by large car buying states such as California and by China’s desire to be the Detroit of the EV market, the “[c]at is out of the bag on Electrification.”  Green Tech Media ("Can the Electric Vehicle Push Defy a CAFE Standards Rollback?")  In a related story, the Howard H. Baker Jr. Center for Public Policy at the University of Tennessee came out with an interesting analysis that the EPA’s fuel efficiency standards have saved Americans an estimated $3.8 trillion dollars in petrol costs since they were first launched by President Ford in 1975.NY Times ("Trump’s Fuel Efficiency Rollbacks Will Hurt Drivers".)
 
New EV’s From Audi
Another announcement of ambitious launch plans for electric cars, Audi plans to launch 20 electric cars by 2025, investing $47.6 billion.  On a similar time-frame to the Jaguar I-Pace’s August launch, Audi’s first offering will be the e-tron SUV.  Sitting between the Q5 and the Q7, the e-tron is estimated to have a 300-mile range.  Audi also plans to launch a performance sedan and a compact car in 2020.  Audi estimates that it will sell 800,000 EV’s by 2025. Green Car Reports  ("Audi invests heavily in 20 electrified cars by 2025".)  While Tesla has had the EV market largely to itself, it is now going face the challenge from established automakers as they roll out cars competing across the range.
 
The Future of Fossil Fuels
In a story that should scare the fossil fuel market, Bloomberg New Energy Finance analyzed the combined impact of the falling costs of solar, wind and batteries: “…the economic case for building new coal and gas capacity is crumbling, as batteries start to encroach on the flexibility and peaking revenues enjoyed by fossil fuel plants.”Bloomberg New Energy Finance ("Tumbling Costs for Wind, Solar, Batteries Are Squeezing Fossil Fuels".)
 
As the transportation system moves from the internal combustion engine to EV’s, utility companies face a number of opportunities and challenges.  A recent Lawrence Berkeley National Labs study focused on two aspects—the ability to control How and when the car charges (V1G) and the ability for EV’s to provide power back into the grid (V2G).  In controlling when a car charges (V1G), utilities can avoid charging during peak periods and stabilize the load on the grid.  Focused on California, V1G could be worth $1.45-$1.75 billion and go a long way to meeting California’s Stationary Storage Mandate.  As automakers develop the ability of EV’s to also provide power to the grid (V2G), that could be worth a further $12.8-$15.4 billion to California.Electrek("Electric vehicle fleets could save billions with controllable load and vehicle-to-grid features".)
 
The Adoption of Electric Buses Accelerates
As a follow-on to a story we discussed in our last newsletter, Bloomberg New Energy Finance also estimates that the conversion to EV’s will be fastest in the public transport sector, predicting that 80% of all buses globally will be electric by 2040. Bloomberg New Energy Finance ("E-Buses to Surge Even Faster Than EVs as Conventional Vehicles Fade".)
 
Mercedes vision for the bus of the future:

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The Royals Go Electric
I have been in London this week and, in the spirit of tying every bit of news no matter how tangential to the Royal wedding, the bride and groom left Windsor in a Jaguar E-type converted to electric.  Our intrepid photoshopper, David, managed to capture this shot of our charger gaining the royal seal of approval:

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Paul Vosper
pvosper@oasischarger.com
+1 (929) 777-0093

Oasis Charger Corporation Update 051118

Release Date: 05/11/18

US Consumers Increasingly See Electric Cars as an Attractive Option.
The AAA’s survey on consumer buying intentions indicates that 20% of consumers intend to buy an electric car (EV’s) as their next car.  That is up from 15% last year.  It appears that the increase is driven by the increasing choice that consumers have in EV’s.  If half of those ultimately decided to buy an electric vehicle in the next 5 years, that would represent a 10-fold increase in EV sales. CNN.com (More Americans say they'll buy an electric car.)
 
A Japanese Consortium to Develop Solid-State Battery Technology
A consortium of Japanese automakers has teamed up to develop solid-state battery technology.  Solid-state battery technology holds the promise of a safer battery with greater energy density and of lasting for a greater number of charging cycles.  Solid state batteries also offer significant manufacturing cost savings, allowing automakers to do away with fire containment structures and battery cooling systems.  Worried about advances from the US in this technology, Toyota, Honda and Nissan have joined with battery makers Panasonic and GS Yausa and the Japanese government to fund a $14 million initiative to develop solid state batteries with a 340 mile range by 2025. Green Car Reports (Japanese automakers team up to solidify next-gen batteries.)  As of yet, no one has proven that solid-state battery production can be scaled to commercial levels, but the inventor of the lithium-ion battery, John Goodenough, at the University of Texas battery has produced a battery he claims has three times the density of lithium-ion, charges in minutes and continues to operate consistently at temperatures below freezing (an issue with lithium-ion).  Computer World (Inventor of new lithium-ion battery responds to skepticism.) 

Citi Sustainability Report-2 billion Cars by 2050
A comprehensive report by Citibank on Sustainable Cities is well worth reading to understand the challenges faced by continued population growth and urbanization.  One prediction in the report is that by 2050 private car ownership is expected to double to 2 billion cars.  To understand why the Chinese are leading the world in electrifying their automotive industry, congestion and air pollution are estimated to cost an astounding 7-15% of GDP.  Citi.com(SUSTAINABLE CITIES Beacons of light against the shadows of unplanned urbanization.)
 
Bus Electrification Impacting Oil Demand
One area that we have been following closely is the conversion of bus fleets to electricity.  China, again, leads in this area, adding 9,500 electric buses every 5 weeks, or the equivalent of the entire London bus fleet.  Because buses consume 30 times the fuel of cars, the pace of the electrification of the bus fleet is starting to have an observable impact on petroleum demand.   Bloomberg New Energy Finance estimates that this year all EV’s will reduce oil demand by 279,000 barrels a day.  Of that 233,000 is from electric buses alone. Bloomberg New Energy Finance (Electric Buses in Cities: Driving Towards Cleaner Air and Lower CO2.)  Cities like Los Angeles, Paris, London and Mexico City are starting to take notice with commitments to convert their diesel bus fleets to electricity by the mid 2020’s.
 
These last two stories, illustrate the necessity of providing a solution to urban electrification.  Space restrictions, lack of private residential garaging, expensive public garaging, and the draw on the grid from more concentrated living and fleets (like buses), will require innovative infrastructure solutions to these charging needs. 
 
Electric Trucks 1912
Finally, there has been a lot of press around electrifying the freight industry with the Tesla Semi.  But one American company beat them to the punch by over 100 years. The Commercial Truck Company of Philadelphia built these 5-ton electric trucks in 1912.  Used by Curtis publishing to delivery periodicals silently at night, the vehicle on the left was in service for over 50 years.  Both of these C-T Model A’s were recently up for sale in Hemmings Motor News.
 

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Oasis Charger Corporation: EV Market Update 050418

Release Date: 05/11/18

VW announced on May 3rd that it had awarded battery purchase contracts worth $48 million, double its announcement several weeks ago.  VW’s Chief Executive, Herbert Diess, also announced that it plans on selling 3 million all-electric cars per year by 2025.  Tesla has had the EV market largely to itself so far, but the traditional car makers are pushing aggressively into the market, harnessing their experience in mass-production, engineering and financial fire-power; VW makes more cars in 4 days than Tesla makes in a year.  VW alone plans to launch 25 new all-electric models in the next 24 months, highlighting the manufacturing woes and scale issues that Tesla has faced, especially with the Model 3. Fortune ( VW Just Ordered $48 Billion in Electric Car Batteries. That's About What Tesla Is Worth Right Now.)  As Fortune points out, VW’s battery order is roughly the same size as Tesla’s entire market capitalization.  Elon Musk has stated that he started Tesla to spark a conversion to all-electric cars within a decade.  That wish is starting to catch up with him.
 
In previous newsletters, we have commented on the EPA’s proposal to roll back fuel efficiency standards established under the Obama administration.  Given the flimsy rationale for these changes and the conflict with California’s own standards, it was likely that these proposals would be tied up in court for years.  Indeed, last week, California along with 16 other states and the District of Columbia filed suit against the EPA over its proposed rollback.  Green Car Reports (California and 16 states sue EPA over emissions rules.)
 
In addition, the Trump administration recently lost a key court decision in a related case.  Under the Corporate Average Fuel Economy (CAFE) standards, automakers pay penalties for every car sold that does not meet those standards. Some luxury car makers have chosen to pay the fines rather than incur the cost to re-engineer their fleet to meet those efficiency standards. NHTSA, which administers the program, was set to raise the fines from $55 to $140 per car/per mpg under a Congressional requirement to reflect inflation (the fines were originally established in the mid-70’s).  Last July, however, the Trump administration announced it would cancel the increase, leading to a challenge from New York, California and Vermont. The New York federal court blocked the Trump administration from delaying the imposition of the higher fines.  Bloomberg.com (Court Blocks Trump Effort to Delay Boost in ‘Gas Guzzler’ Fines.)  Automakers are starting to fall behind the CAFE standards especially as they phase out diesel engines, which they have relied on to meet the CAFE standards, increasing the pressure to bring out more fuel-efficient engines and electric vehicles (EV’s).
 
The recent news story that Walmart, Target, Alltown, Casey’s General Stores and Sheetz gas station and travel centers are planning on installing EV chargers at 600 sites is a further indication of the main-streaming of EV cars. Funding is coming from the $2bn settlement fund from the VW diesel settlement—Electrify America.  The number of chargers being developed under the program is relatively small in relation to the 600,000 additional non-residential chargers that the DOT estimates are necessary to support EV sales with over half targeted in California—to put this in context, Walmart and Target alone have over 7,000 stores.  Green Car Reports (“Really fast electric-car charging stations coming to a Walmart near you”.)  It is, however, an important signal that EV cars are emerging from a niche/early-adopter product into the mass market.  It is also an indication that convenience stores, which are generally heavily tied to gas stations, are starting to consider the challenge posed to the gas station model by EV’s, where “fuel” delivery occurs in the home, office, hotel or shopping and entertainment centers.
 
With the caveat that economists are notoriously inaccurate, an oil hedge fund manager recently tweeted that EV’s could result in oil prices hitting $300 a barrel.  He believes that the growth of the EV market is limiting investment in oil projects with long lead times.  Clean Technica (“Electric Car Jitters May Drive Oil To $300 A Barrel”.)  If true, this could set off a virtual cycle for EV’s (a vicious cycle for oil), where higher oil prices would further accelerate the demand for EV’s.
 
Illustrating the rising tension between utilities and oil companies over the future of automotive power, the American Legislative Exchange Council (ALEC) considered an initiative backed by the Koch brothers to eliminate state incentives for EV’s and chargers.  ALEC is an influential, free-market organization that brings together conservative lawmakers and the private-sector to draft model legislation.  E&E News (“Utilities win as ALEC spars over electric vehicles”.) While the trade group for utilities ultimately defeated the proposal, it is likely that this battle will continue as utilities start to generate revenue once earned by the oil majors.

 

Oasis Charger Corporation: EV Market Update 042018

This week’s Electric Vehicle (EV) stories seem to concentrate on governmental and municipal responses to the unique demands of EV’s.  It is a reminder that EV is a disruptive technology.  The internal combustion engine (ICE) has been the dominant technology for more than eight decades and cities, real estate, businesses and energy delivery infrastructure have developed around that model.  Moving away from a gas station energy delivery model (or petrol station for those outside the US) to a model where energy is delivered to your home, office or hotel or while you shop, or watch a film has significant implications for a number of economically important businesses.
 
An important initiative on the regulatory front, the New York Power Authority (NYPA) and several other state agencies, including NY DOT and NY Thruway Authority, have asked NY regulators to eliminate demand charges for DC fast EV chargers.  Similar to proposals in California and Oregon, these agencies have also asked regulators to require utilities to develop plans to encourage the take up of EV’s.   Demand charges are based on the highest usage by a commercial enterprise within a given month. Demand charges particularly affect companies that use a lot of power but over short periods.  The NYPA has requested that fast chargers be exempted from demand charges and to consider longer-term rate modification to "align with their low load factors and sporadic usage." (read: Utility Dive "New York agencies propose shifting EV fast chargers to non-demand charges".)
 
One challenge is delivering energy in dense urban environments.  The disappearance of gas stations in cities like Manhattan indicates that delivering energy is not just a challenge for EV drivers. Cities with primarily on-street-parking face a logistical issue in providing charging facilities for EV cars.  It may also pose societal fairness issues, especially in countries that are looking to ban the sale of ICE’s.  However, a number of cities are looking at innovative solutions.  In London, Ubitricity is installing chargers on lampposts and providing customers with a proprietary cable to plug in (watch: Ubitricity | Fully Charged).  Similar to models rolled out in Holland, Belgium and Germany, Seattle and New Orleans are piloting programs that allow residents to install chargers on public property outside of their home.  Holland is also experimenting with the opposite model—installing public chargers on private property.  (read: GreenBiz "The smart city's blueprint for EV infrastructure"). With air pollution a particular problem in urban environments, EV’s are an integral part of the solution but also require innovative urban planning responses. 
 
Staying on the topic of urban pollution, India cities face a stunning level of air pollution.  A significant contributor to that pollution is the ubiquitous rickshaw.  Often poorly maintained and lacking catalytic converters, the two-stroke engines used by these taxis produce about 13 times the amount of particulates as other ICE’s.  However, a Bangalore based ridesharing company, Ola, has ambitious plans to address the problem.  Ola is rolling out 10,000 electric rickshaws and is targeting 1 million by 2021. (read: CNN "India's Ola wants to put a million electric vehicles on the road"). Interestingly, Ola’s plans are backed by a number of international investors, including Japan’s Softbank.
 
Finally, Tesla continues to come under pressure from traditional automakers.  Jaguar has responded to the success of the Model X with the I-Pace.  And the fact that the Model S has become the best-selling luxury sedan has not gone unnoticed by Audi and Mercedes, who previously dominated this market segment.  Mercedes has announced the EQ S (read: AutoCar "Mercedes-Benz to launch ultra-luxurious EQ S electric saloon in 2020").  While at the same level as the S class sedan, it not simply an electric conversion of an existing ICE.  Mercedes is designing the car as a separate model to take advantage of the flat battery.  The EQ S is part of the 10-model new EQ electric brand, which is planned to include a mid-sized SUV (the EQ-C) and a smaller, more affordable, sedan to compete with the Tesla Model 3.

Paul Vosper
pvosper@oasischarger.com
+1 (929) 777-0093

 The Mercedes EQ-C:

The Mercedes EQ-C:

Oasis Charger Corporation: EV Market Update 041318

Nothing new in a recent article in Forbes ("Global Electric Vehicle Market Looks To Fire On All Cylinders In 2018"), but a nice summary of the state of the EV market.  It also repeats the estimate that electric cars will reach price parity with the internal combustion engine (ICE) by 2020 (vs. other estimates that center around 2023-2025). 
 
Predictions around price parity of EV’s to ICE’s have been focused largely on the upfront purchase price of EV’s versus ICE’s.  An interesting article in the FT, however, suggests that the automobile leasing market is creating a more competitive environment.   EV’s have a better second-hand value than ICE’s.  As ICE’s become less attractive, the value of the car at the end of the lease (the residual value) falls.  Accordingly, lease companies need to increase the monthly lease payments to compensate for the greater depreciation in value during the term of the lease.  In comparison, the Tesla S has one of the highest values in the second-hand car market, i.e. it has a higher predicted residual value.  The lease company can, therefore, reduce monthly lease payments, betting that the car will be worth more at the end of the lease.  As EV’s become increasingly popular, their second-hand value continues to rise and the value of ICE’s fall, creating a cascade effect. FT ("Costs, not the environment, will drive switch to electric cars".) Effectively, this is a futures market—car buyers are sending a message on where they think EV demand will be, relative to ICE’s, in three years’ time.
 
EPA Administrator, Scott Pruitt’s, announcement last week that the EPA intends to roll back emissions standards for automobiles continues to receive a lot of press analysis.  A particularly scathing article in the The New York Times pulled apart the EPA’s justification for rolling back the rules. The article goes on to say that the EPA’s analysis is so lacking in scientific groundwork that it is unlikely to survive court challenges. NYT ("in His Haste to Roll Back Rules, Scott Pruitt, E.P.A. Chief, Risks His Agenda".) Green Car Reports ("EPA does not set fuel-economy limits: get this right, journalists!".)  The bottom line is that this is going to be tied up in rule making and court proceedings for years.
 
An interesting report is out by McKinsey analyzing the current EV market.  They conclude that an EV range of 200 miles is the point at which people feel comfortable driving EV’s.  Now that the race for range is concluded, “the race for mass market electric vehicles has begun.” They conclude that, with average battery range exceeding customer expectations and with decreasing prices, EV’s may be close to a commercial tipping point.    Read the McKinsey Report  ("What a teardown of the latest electric vehicles reveals about the future of mass-market EVs".) Reading this report, it is clear that the growth of the market is being driven by the fact that consumers see electric cars as a significant technological improvement over ICE’s.
 
Finally, while much of the press is filled with the excitement of new EV model announcements and launches, it is important to watch the geekier world of battery technology.   Most of the news on battery tech has also been focused on the solid-state batteries and the inherent benefits they offer.  However, in the shorter term, it seems that there is more life yet to be wrung out of the lithium-ion battery.  Emerging from the shadows, Sila Technologies announced a partnership with BMW to develop lithium-ion batteries with a significant improvement to the negative electrocute.  Without going down a rabbit hole of the chemistry (or is it physics?) of how lithium-ion batteries work, the impact could be a 10-15% and as much as 40% improvement in the amount of energy that a battery can store.  MIT Technology Review ("This battery advance could make electric vehicles far cheaper".)  These are big numbers in the battery world where improvements are generally measured in a few percentage points at a time.

 

 Bringing back memories of my childhood, a classic mini converted to electric.

Bringing back memories of my childhood, a classic mini converted to electric.

Oasis Charger Corporation: EV Market Update 04/6/2018

While many car buyers may not yet recognize Electric Vehicles (EV) as an option, the next 24 months is likely to significantly change public awareness.  (Reuters: “Automakers, Northeast States Urge Americans to Buy Electric Vehicles,”).  At the recent Geneva and New York auto shows, automakers displayed a wide variety EV’s.  (Reuters: “Automakers put pedal to the metal on electric vehicles,”).  Moving out of the luxury segment, the Tesla 3, the redesigned Nissan Leaf and the Chevy Bolt are squarely targeting a wider market.  

Oasis Charger Corporation: EV Market Update

We are clearly moving from a market of early adopters/enthusiasts to the main-streaming of electric vehicles (CleanTechnica: “Eventually, Joe Schmo Will Have His Electric Car “Lightbulb Moment”).

Meanwhile, industry analysts are reducing their estimates of when EV’s reach purchase price parity with gasoline powered cars (ICE’s) without the need for various financial/tax incentives.  The consensus seems to be alighting on circa 2025, but with some more bullish estimates pushing toward 2023.