Everyone is either praising Electric Vehicles or exploiting their weaknesses. Whatever you may think of them, they are here to stay. Many of the challenges that the EV industry faces: infrastructure, cost and scaling, are all specific to their own industry. However, what impact do Electric Vehicles (EVs) have elsewhere?
An increase in EV investment means an increase in electricity demand
With the uptake of EVs, we are expecting to see an increase in electricity demand. A normal household may charge their car 2-3 times a week on average (based on the lower range models, that are more affordable at this moment in time). If you take the 60kWh Tesla battery however, this would reduce the charge amount to 1-2 times a week. What additional load would this have on the grid? Would demand be that much higher? Who covers this infrastructure demand?
What happens to the grid if EV owners charge their vehicles at the same time?
If you assume the average battery is 50kWh. There were 200,000 electric vehicles at the end of 2018 on the road, that equals 10 gigawatts of charge capacity. The National Grid has a capacity of around 90GW and typically peaks at 60GW. This leaves us with plenty of room for spikes should every single EV owner in the UK decide to charge their car at the same time.
This is the concern. If EV ownerships grow at the predicted rate, the National Grid will run out of capacity. What’s more is, the demand curve will alter. This will happen naturally as EV owners return from work at the same time as non-EV owners. They’ll both be charging their cars and using electronic household items etc. at the same time.
Managing the energy spikes efficiently
This spike would need to be alleviated. One possible answer is through smarter connected homes and suppliers being savvy with their tariffs. An example would be, to offer cheaper electricity rates at times of lower demand. For example: 1am to 5am. It is also possible to reduce the amount of power used for charging cars through smarter chargers. This would take longer to charge but would ease the pressure on our aging grid.
Changing the demand on suppliers and customer engagement
Continuing the utilities supplier theme, EVs will change the demand on suppliers and engagement with customers. Smarter tariffs, better offers, but ultimately smaller margins are what’s on offer. The interesting point for us is, how suppliers will interact when EVs are involved. What we think the industry will see. If there will be a battle, as EV owners want to tie their car ownership back to their utility supplier. However, with all the different charging station providers, how will this work?
The fear is that an EV owner will be tied into certain brands of energy supplier
Depending on infrastructure and locations, tying EV owners to brands could be problematic. If you were to have an EV owner living in the South West and the only charging stations available are from a certain brand, then it’s easy. The customer will have a supplier at home and a supplier for their car. What if this is flipped and there are three charging station providers on a long commute? The customer will have to sign up to all three to make sure they are covered when they travel. This could mean large bills of wasted money on subscription fees, or memberships, to be able to use certain stations. This also doesn’t tie back to their supplier at home.
A possible simple solution for charging station providers or car manufacturers
The solution could be for charging station providers, or car manufacturers, to become energy suppliers themselves.
How Volkswagen solved it
We have seen this happen with Elli, a subsidiary setup by Volkswagen. They are now looking to own the entire customer lifecycle, when it comes to EV ownership. It looks to be a logical solution, that holds fast with digital transformation, with a future-proofed concept.
Imagine Tesla Energy at home. Tied into the solar panels and battery storage, giving the customer access to Tesla charging stations and Tesla owning the entire customer lifecycle.
It’s simplifying ownership.
It takes away the need to think about multiple bill ownership as an end-user. The customer knows they will receive one monthly bill that covers all their energy-related costs. It simplifies the process for the customer and gives peace of mind.
Electric Vehicles, a sustainable gateway?
The relationship between EVs, manufacturers, energy suppliers and the grid are becoming more intrinsically linked. How possible is the EV/energy supplier model? In short, very possible.
This concept is fresh and digitally forward. It’s getting ahead of competitors in a safe, but out-of-the-box model. Often issues arise due to inaction. However, EVs are a great opportunity to help engage a generation towards creating a sustainable future.
Creating a sustainable end-to-end customer life cycle through digital innovation
Being able to create an end-to-end customer lifecycle around a person’s home would bring in a whole range of analytics EV and energy suppliers have never accomplished. It removes the pain of ownership from the end-user. Potentially even lowering costs for both the company and the customer.
ENSEK have been working with the energy supplier market for nearly a decade, helping new entrants into the market. Our team of experts build end-to-end energy supplier companies, to orchestrate concepts such as the EV/energy supplier round model.
