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Ready for the Charge

Sept. 1, 2012
Sales of electric vehicles may be falling short of projections so far, but the drive to build the infrastructure to charge them is gaining traction.

Sales of electric cars in the consumer market have significantly underperformed manufacturer projections thus far. This has the mainstream press in a froth, fretting about why no one loves the cars and pinning it most often on issues of cost and infrastructure.

Manufacturer marketing and product management people involved with meeting growing demand for electric vehicle supply equipment (EVSE), as well as distributors who sell them and others in the market, see a much different picture. In reality, this is a market still in the ramping-up phase. The market may seem slow in developing, but that all depends on how you set your expectations.

If you took the auto manufacturers' projections, or those of politicians, as reasonable and realistic, then there's certainly reason for disappointment. Sales of General Motors' Chevy Volt plug-in hybrid, Nissan's Leaf plug-in electric and smaller players such as Tesla, Fisker, Coda and very recent entrants such as Smart's For2 electric have fallen short across the board.

The build-out of an infrastructure to charge the vehicles has also been slow, with more outreach, education, marketing and tire-kicking going on than actual installation of EVSE systems. As we go to press, there are more than 4,150 publicly available charging stations in the U.S., according to the U.S. Department of Energy. Adding in the private charging stations in EV drivers' garages would boost that number significantly, but it's still well below what people in the market are expecting to see over the coming years.

By 2017, Pike Research forecasts that more than 1.5 million locations to charge vehicles will be available in the United States, with a total of nearly 7.7 million locations worldwide. (The Asia Pacific region will lead global EV charging equipment sales due to strong government incentives and directives in China, Japan, and Korea, Pike said.)

A recent study from Frost & Sullivan, titled Strategic Technology and Market Analysis of Electric Vehicle Charging Infrastructure in North America, is even bolder, estimating that there will be approximately 4.1 million charging points by 2017.

By either measure, that represents significant potential business for electrical manufacturers and distributors who have charged into the EVSE market, though industry sources tell us they expect something less than the growth rate Frost projects. “The charging infrastructure is expected to grow at a compound annual growth rate (CAGR) of 128.12 percent, due to the currency of the ‘green’ concept and oil prices' volatility,” the research firm said in a release announcing the study.

Electrical industry sources talk more comfortably of a 50% rate of compound annual growth in the EVSE market, which is still pretty robust. The market will ultimately rise or fall with consumer and fleet demand for electric vehicles, but that demand is expected to improve as a wider variety of EVs and plug-in hybrids come into the market. Mike Calise, director of electric vehicles for Schneider Electric, Palatine, Ill., expects charging systems installed in workplaces to be the strongest growth area over the next few years.

“It's still a chicken-and-egg situation,” Calise says. “If there are not enough chargers out there, if drivers don't see the availability of chargers, they won't decide to buy electric vehicles because of the psychology of range. If there's not a lot of cars on road, people may be reluctant to put in charging systems. It will be slightly out of whack either way, but we're still in about the second inning of a nine-inning game.”

Car makers are betting heavily that the future will include a good mix of electric-drive vehicles. Ford Motor Co., Dearborn, Mich., recently announced a $135 million investment in electric vehicle development that included changing the name of one of its research facilities from the Advanced Engineering Center to the Advanced Electrification Center. With 1,000 engineers working together under one roof, Ford thinks the focus on electrification will bring competitive advantage. Ford's Focus Electric began production last year, and the company expects to triple electrified vehicle production capacity by 2013.

The name of the game right now is laying the groundwork through education, creating some differentiation among competing products and preparing to meet demand as it grows.

The education part begins with clearing up misconceptions about the various levels of charging equipment and what they are good for. (See sidebar, “On the Levels”.) The mix of Level 1 versus Level 2 and DC quick charging systems will evolve over time. The Frost & Sullivan survey cited above projects 71% of the charging stations to be Level 1, followed by Level 2, which will account for 27% of the market by 2017.

Manufacturers say curiosity about DC quick charging is strong, but actual demand will take some time to grow as the faster charge comes with an order-of-magnitude higher price tag. (In very rough terms you can expect to pay up to $5,000 for a Level 2 charging system, installed, whereas a DC quick charging system will set you back about $50,000.) There are also standards issues still to be resolved regarding the DC systems' connectors. Some current EVs don't have a connection to accept a charge from a DC system, others, such as the Nissan Leaf, have a separate receptacle. Standards organizations are looking at a new plug design that incorporates DC contacts into the SAE J1772 standard plug now used for Level 2 charging.

In the near term, quick charging will probably be economic only in public charging stations in high-traffic areas. Even operators of large fleets are leaning toward Level 2 overnight charging, says Kiran Laxman, product manager for Legrand/Pass & Seymour, Syracuse, N.Y., whose company has chosen to focus its EVSE activity in the North American market on the Level 1 and Level 2 products that fit with Pass & Seymour's established position in commercial and residential equipment that's downstream from the load center. Legrand does have DC quick chargers in the European market.

“Fleets are still a perfect market for Level 2 chargers,” Laxman says. Fleet owners who have inquired about DC quick charging systems have typically settled on Level 2 and been satisfied, he adds. “Fleet vehicles have not adopted electric models on a massive scale, but if they do embrace electrification, it will be a combination of DC for top-off charging during day and Level 2 overnight,” he says.

For distributors who've jumped into the EVSE market, education and outreach are the main activities, especially for those in markets that are only now seeing the availability of significant numbers of EVs. In St. Louis, for example, French Gerleman decided two years ago to begin stocking EV supply equipment, says Adam Ruebsam, vice president of commercial and industrial sales, but only recently have the orders really started coming in.

Ruebsam has been active in St. Louis Clean Cities, served on the St. Louis Science Center's advisory committee for EVie, their electric truck with interactive energy exhibits, and is a frequent speaker on clean energy topics including electric vehicle charging stations. That kind of outreach can help establish French Gerleman as an authority on the subject, so when building owners and managers start looking to install charging systems the company will be top-of-mind.

“We did a lot of education early on, about the various levels and charging times and ampacities, what are the infrastructure requirements, how do I secure it and generate revenue from it,” Ruebsam says. “Today, we're starting to see them show up on specs. Employers call and say, ‘I have an employee who bought an electric vehicle, and he wants me to install a charger.’ Now they're coming to us and wanting to learn.”

French Gerleman initially took on a new supplier, Clipper Creek, Auburn, Calif., but like most distributors it's now seeing a growing number of its established suppliers develop products for the EVSE market as well, which gives the distributor an opportunity to help the customer get exactly what he or she is looking for.

“There's a lot of manufacturers out there, a lot of technologies. Our role is to understand and point them in the right direction,” Ruebsam says. “Clipper Creek was not a vendor of ours, but we started with them and they were one of the first. Siemens is a partner of ours, they have charging stations, GE, Milbank, and Hubbell is distributing Pep stations. They're all designed to the standard, they're all going to charge your vehicle, but there are subtle differences. They're all Level 2, 30A, but some have credit card swipe, some have RFID readers, some have cellular networks, some have Ethernet connections, some can be integrated into the building's security infrastructure.”

For the manufacturers of the EVSE systems, it's that differentiation amid a flood of competitors that is front of mind right now. GE, Fairfield, Conn., took an early spot toward the front of the marketing peloton and has continued to come up with some innovative ways to raise its visibility. Last year, after the high-profile introduction of its WattStation pedestal and wall-mount chargers, the company installed a solar carport in Plainville, Conn., that offers parking space for 40 vehicles, six Level 2 charging stations and enough power to fully charge 13 electric vehicles per day. A couple of months ago, GE and vertical axis wind turbine company Urban Green Energy announced the installation of the first Sanya Skypump, a 4kW charging station capable of recharging an electric car on wind energy, at the world headquarters of environmental services firm Cespa, in Barcelona, Spain.

In this battle for mindshare the user interface and payment options are huge. Last month, GE announced a partnership with online payment giant PayPal to allow users of WattStation chargers the option of paying via the PayPal service.

Schneider Electric has added skins to its residential charging system so customers can coordinate the look of the charger with the décor of their garage. “It's a little thing, but we wanted customers to be able to personalize the charger to meet their own needs for expression,” Calise says. “The unit is a sleek white well-integrated design, and you can make it more personalized with downloadable images. You can upload your favorite photo to our site and we'll produce it and ship the skin.”

Workplaces are the market where Schneider Electric is seeing the strongest growth, says Calise. “As you have more choices in cars, you will also see more chargers out there, particularly workplace chargers. If you don't live in a single-family home, you may be in a multi-unit dwelling without access to charging, but you spend your day at the office where you can charge your car. That's why we expect the workplace to see the fastest growth.”

Public charging stations are popping up in a variety of places (some of them rather baffling). Cutler of GE says the WattStation is being installed most in universities and big-box retail stores.

A recent study showed that installing an EV charging station in the parking lot can significantly increase the amount of time an EV driver will spend in a retail shop. That explains the proliferation of charging stations at Cracker Barrel restaurants, 7-Eleven stores, Walgreen's pharmacies and various hotel chains and shopping centers. Less obvious is why a driver would feel more inclined to spend a couple of hours at a fast food restaurant or a gas station, waiting for the charge meter to level-up.

A significant number of the charging station installations now in place or under construction are affiliated with one or more of the networks of charging stations being created to eliminate drivers' feelings of “range anxiety.” ChargePoint, eVgo, 350Green, Blink and others are establishing networks of smart chargers to help EV drivers get from place to place. Knowing about the networks and their benefits can be a helpful service for distributors to offer customers.

“A lot are interested (in networks), but a key piece of that is, do they want to make it revenue-generating? Or do they want people to walk up and it just works?” says Ruebsam. “Not a lot are looking for this to be a revenue-generating piece. There's additional hardware they have to buy, an annual fee for putting their station on a network, transaction fees.”

For customers who do want to generate revenue, the networks can drive a nice bump in traffic, but there are also free ways to raise visibility. “Networks do a good job getting people to find where you are,” Ruebsam says. “The Department of Energy is also tracking charging stations as well. If you register with the DOE and you want your charging station to be made public, that's an open database that people are pulling from for apps to find charging stations. You can still get that visibility by leveraging the DOE. But if it's just for your employees, it doesn't make sense to pay to be on a network that costs you an annual fee.”

The wave will hit here once conditions are ripe. “The cost of batteries and the cost of gasoline are the two big factors that affect overall economic value to the end customer,” says Laxman of Legrand. “Right now, EVs have a five-year to 25-year payback. It's all over the place. If gas prices go up, and if battery prices fall, the payback is much quicker. If we get to the three-year point, the mass market is definitely going to kick in. For a lot of people, that's the point where it makes sense.”

Distributors who are taking the lead will have the advantage. Calise of Schneider Electric is seeing the early adopters flourish already, and suggests that distributors who wait for the market to develop may have new competitors to contend with.

Electrical distributors have their usual advantages in relationships with local contractors and buying influences, since they're providing equipment for construction and renovations anyway, but there are lots of ways of getting these systems into the market. Calise says solar distributors see EVSE as a natural extension of what they're always doing, and “charging your car with the sun” is pretty a compelling message to anyone of the greener persuasion.

“The more innovative, progressive thinkers (among distributors) are betting a little bit, they're taking some risks,” Calise says. “But I think the risk-reward ratio is to their benefit. We're working with these wholesalers to develop the market. Others who take a wait-and-see approach, we think they'll be disrupted through solar distributors. The solar specialists know how to sell green, how to install in residential and commercial buildings, and they're very interested in this market.”