Collaboration between parties across each value chain will be instrumental in delivering a great customer experience, by aligning all the hardware, software and data within the eMobility ecosystem. But customer experience is merely a foundation, not the end goal. Once all players take this ecosystem-wide perspective, many opportunities will emerge to generate customer value around the charge point.
EVs play a vital role in increasing power system flex
The millions of EV batteries and charge points connected to the distribution network can provide utilities with a fantastic resource to help balance the power system – while also enabling EV owners to save or even earn money when their EVs are parked. There are many approaches to EV-based flexibility, ranging from simple rate plansand smart charging (also known as V1G), through to technologically complex V2G programs17. As the industry evolves, it will increasingly rely on organizations with a powerful digital core, able to share data across the value chain.
The simplest option is to use a rate plan that incentivizes overnight charging when demand is lowest. All this needs is a smart meter, a charge point that enables timed charging, and a utility rate plan.
V1G programs are more sophisticated. For example, when renewables generation is high and demand is low, energy markets can send signals to charge point operators (CPOs) to automatically initiate EV charging. Conversely, when demand increases and grids become congested, the energy market can request that EV charging be turned off (although, in practice, shutting off a charger is complicated and difficult to manage).
Missing flexibility can lead to 4 years of local grid expansion – vs just a <6 months for EV chargers 18
V2G programs take smart charging one step further, where the EV dispatches power from its battery into the grid. Questions remain regarding V2G’s long-term viability. It could cause an EV’s battery to degrade more rapidly, and calculating incentives is complex. V2G is only possible if EVs and charging infrastructure are connected and support bi-directional charging. To realize these opportunities, automakers, CPOs and charge point original equipment manufacturers (OEMs) need to install hardware and software that enables interoperability with power networks, and CPOs’ eMobility platforms must also support a flexibility mechanism. Most importantly, these programs should be designed around the customer’s needs to ensure their charging requirements align with those of the grid.
Incorporating EVs into flexibility markets relies on significant data sharing. An open eMobility data infrastructure will be vital if EVs are to participate in future flexibility markets. For example, the grid operator needs to know what resources are available, when they are available, where they are, and who owns them. However, this data is either not created, not collected, or not shared by different parties – OEMs, CPOs, eMobility service providers (eMSPs), etc.
Managing electric fleets
We expect commercial fleets to electrify much faster than privately-owned vehicles. But, driven by corporate ESG commitments, fleet electrification may be much more sensitive to any deterioration of the charging experience. Although fleet electrification helps companies reduce their carbon emissions, it is likely to be only attractive if there are no significant downsides. In practice this means that if fleets cannot charge, organizations cannot execute their business and delivery companies cannot deliver.
Emergency services cannot reach citizens. Bus companies cannot transport passengers. Unless companies are confident their vehicles can be charged when and where required, fleet electrification could either slow down or be canceled. This makes the uptime of charging infrastructure increasingly important.
eMobility collaboration can build the necessary confidence. EV fleets charge either at company locations or on the road. If the industry works together to provide accurate and real-time availability of charge points, new business models can be built to serve the commercial EV market.
The owners of large EV fleets own many – often high-capacity – charge points19. While these EVs are in use, these charge points are idle. There is an opportunity to make this charging infrastructure available to other fleets. Rather than compete with private EV owners for access to public charging infrastructure, fleet owners can build an extensive, shared network of charge points with other companies and use public infrastructure only as a last resort.
This model requires a central orchestrator, along the lines of a fleet-specific eMSP, and relies on significant data sharing20. Fleets could share the availability of their charging infrastructure and each EV’s battery levels. For example, eMSP can help each driver find an appropriate charge point, but also prioritize charge point availability for its owner’s fleets.
Finding a home for second-life batteries
The question of what happens to EV batteries once they reach the end of their useful lives will be answered by a new and important connection between the automotive value chain and the power grid. While used batteries may no longer be suitable for an EV, grid operators can find many uses for them. However, creating this new economy will require collaboration and convergence between these two, previously separate, industries.
EV batteries have a life expectancy of between 100,000 and 200,000 miles, or between 15 and 20 years for the average privately-owned vehicle. Once a battery’s capacity drops to below 70%, it can be repurposed for a second life.21
A second-life EV battery still holds 60 - 70% of its capacity
There are many potential applications for second-life batteries22. They can be installed in residential and commercial properties to store self-generated renewable power, or power from the grid when prices are cheapest. They can then be used to charge an EV or power appliances when prices increase. And utilities can use them to build grid-scale storage to balance networks, or power street lighting.
In light of these opportunities, a new industry is emerging that takes the old batteries from EVs and repurposes them for different second uses. This industry needs to interoperate with energy markets to maximize the customer value they collectively create. Many major automakers have trialed second-life business models that extend way beyond the traditional automotive value chain.