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The EV Opportunity for OEMs and Utilities

A Power Play for Electric Vehicles

Craig Gosling
Craig Gosling

Utilities are fighting globally just to keep their market positions amid a glut of new entrants, intense competition and potential regulatory changes. Global demand for fossil fuels is peaking, thanks to changing consumer needs and government policies around fuel efficiency. Utilities are tasked with recognizing and making use of new sources of demand. These dynamics are driving a dramatic transformation. Utilities must be creative and bold to find the right partners, business models and customers to survive in the future.

Electric vehicles (EVs) offer a potential lifeline. The growth in EVs really matters: they are a game changer for the utilities sector, demanding serious investment in new infrastructure. If utilities take action and muscle into the driver’s seat, they can determine the way future power networks are designed and controlled. Not only can utilities provide charging stations, they can tap into new value streams by developing new products and offering digital tools and services. Such services will be differentiators that help build loyalty.

Matthias Von Alten

Transportation & Mobility Global Strategy Lead

Craig Gosling

Director, Utilities

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Charge points present opportunity to build customer relationships early

Prospective EV buyers will need help figuring out the best deal beyond just unit price; they also need to figure out cost of ownership depending on their local energy infrastructure. When drivers consider the switch to an EV, they face an entirely new set of questions around charge point installation, access to public charging, fast charging, unpredictable prices at charging stations and often a lack of transparency. This presents an opportunity for energy utilities to begin building the customer relationship to help answer these questions. For example, California utility Pacific Gas and Electric and UK EV mapping service Zap Map provide online calculators to compare driving costs.

EV charging costs can vary a substantial amount, depending on location and type of charging station used. Utilities can help customers manage these charging costs and build trust. After the initial estimated $1,200 installation of a home charging unit, the typical cost of “filling up” an EV across markets and regions varies significantly and is often prone to volatility.

To ensure a smooth distribution of power to offset varying levels of demand, many utilities are installing multiple charging stations that offer equal service across the network. The load balancing helps manage peak period demand and helps utilities avoid cost-intensive, one-off increases in connection capacity and prevent peak loads that result in higher demand charges. Utilities that collect customer charging data can identify points of higher consumption on the grid and make off-peak charging offers. These efforts can also help avoid long lines of cars waiting to charge.

According to Publicis Sapient’s The Digital Life Index research, more than half of people globally say they are likely to use publicly provided charging stations and charging stations at retail fuel stations outside their home, particularly for longer drives. European countries are likely to provide around three million public charging points by 2030 in order to support the rising demand for EVs and the European Union’s long-term climate objectives, according to a report by green campaign group Transport & Environment.

Working with local municipalities, utilities can determine the most effective ways to move forward with developing public power infrastructure. Coordination at governance level is vital to manage the full ecosystem—from EVs, charging infrastructure, grid services, energy storage and connected services. In some cases, city codes and laws must be maneuvered, and other times there may be distribution or grid upgrades necessary to enable charging. Utilities are also increasingly stepping in to work with customers to better discern their changing electricity needs. The customer experience today can seem overwhelming, and utilities that take the lead by providing easily accessible and accurate information can extend a loyal customer base.

These charging points no doubt represent a major data collection opportunity, providing insight into EV drivers’ habits that allow energy utilities to consistently improve user experience. Earlier this year, Shanghai’s municipal government said it was ready to roll out 100,000 charging ports that will double as data-collecting interactive devices. The stations will have enhanced data-collecting capabilities and can offer battery information, user habits, vehicle location and other data. Utilities that get into the game early and collect customer data can build an understanding of where people are charging in order to build out charging infrastructure and use the data for new applications like vehicle-to-grid (V2G) integration.

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Unite to enhance customer experience

Electric vehicles present an opportunity to go beyond providing a reliable service to become a trusted source for drivers when it comes to access, price transparency and peace of mind—which in turn will provide utilities with useful customer data. Ultimately, this space will see industry consolidation and the forging of new partnerships to create customer value by leveraging access to customers, more insights and visibility, and talent and capabilities.

For example, the UK’s Western Power Distribution has joined with Wallbox and Nissan on a new V2G trial. The project dubbed “Electric Nation” recruits consumers by offering free installation of Wallbox’s smart chargers to Nissan EV owners. Electric Nation aims to address grid capacity issues, provide insight into driver’s charging habits and optimize charging sessions. Integrated services like these offer consumers more simplified solutions. Another example is Tesla moving into home solar. Sustainable homes are gaining in popularity and the company is full steam ahead with rolling out its V3 solar roof tiles.

Further, there’s ripe opportunity for new value streams. UK energy retailer Octopus Group has created a separate entity, Octopus Electric Vehicles. The business leases EVs directly to customers, enabling the group to gain market insight and build new capabilities beyond energy retail. Subsidiary Octopus Energy, a retail electricity and gas supplier specializing in sustainable energy, is an example of a retailer that is pursuing an EV future. In conjunction with the group’s electric vehicles division, which leases cars directly to customers, the business has been trialing a roaming tariff, which allows EV drivers to use various charging stations regardless of their service provider, and V2G offering.

Utilities can be at the center of the electric vehicle journey. Now is the time to start building that infrastructure.

The EV Opportunity for OEMs and Utilities

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Craig Gosling
Craig Gosling
Senior Client Partner

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