When Michael Kurzeja, senior manager of corporate strategy, innovation and sustainability at Exelon, asked how many electric vehicle owners there were in the audience at Greentech Media’s Power & Renewables Summit last month, only a smattering of people put up their hands, as I wrote in Part 1 of this series.
I later wondered, what if he had asked how many people don’t own a car at all? How would the numbers compare?
An informal survey of 10 people at a lunch table revealed there were, in fact, more people who didn’t own a car of any kind — electric or not — than people who did. Asking for a show of hands over sandwiches is in no way scientific. Still, it’s not a great sign if you’re in the EV business, given that attendees at an electricity conference should be prime EV customers.
This taps into the issue raised in last week’s column: How can stakeholders make EVs more compelling to consumers? How can the process be made more consumer-friendly — from the first test drive to charging the vehicle every day?
Experts say meeting potential EV drivers where they’re at and making the entire process as seamless as possible is key for growth in the sector overall. Industry leaders and new market entrants are grappling with this in different ways, and coming up with some pretty interesting solutions, as we’ll explore further in Part 2 of this series.
EV car-sharing as a real estate play
A startup named Envoy believes it has part of the solution for removing some of the consumer-facing barriers to greater EV adoption.
The Los Angeles-based company runs an EV car-sharing service that’s sold primarily to residential real estate firms. Envoy allows drivers to rent the cars on a per-minute, per-hour or daily basis for personal or professional use — all managed through a mobile app. In addition to the cars, Envoy provides charging stations, insurance, maintenance and ongoing customer support.
With Envoy’s service, users can drive an EV every day, without ever having to own one. It's a model that eliminates the risk of committing to a new technology.
“Envoy gives you a car that you feel proud about and you're familiar with, so it serves the sense of ownership you always had at your doorstep,” said co-founder Ori Sagie, in a recent interview at the LA CoMotion conference.
The company currently operates across California, and was recently selected by the Volkswagen subsidiary Electrify America to deploy more than 20 Volkswagen e-Golfs at multi-family properties across Sacramento, along with Level 2 charging stations. Envoy plans to deploy 142 vehicles at 71 locations in and around the California capital by 2019.
Sagie hails from the real estate industry. That’s where he discovered that building amenities like pools and massage rooms ultimately create very little value — the developer spends millions to build them and tenants barely use them. At the same time, mobility is a pain point for developers because they’re expected to offer ample parking, often in dense cities, when tenants need cars less today than ever before.
Envoy’s solution helps mitigate these issues because it reduces parking requirements, while also helping with tenant retention and boosting the lease value. Customers, meanwhile, get access to cheap, seamless, electric mobility from within their own building, and without the hassles of ownership. The startup is now applying this on-demand EV model to scooters and bikes.
Now you may be thinking that this sounds like what Zipcar offered. And that’s partly true. Car-sharing isn’t new. Envoy’s growing success stems from making the service just a little bit better than previous iterations. Locating the cars within buildings, rather than pursuing the “floating” model, where there are cars located out on the street, is a key differentiator. Having apartment key fobs double as car keys, offering Teslas and other compelling vehicles, and providing on-site EV charging, are other important features of Envoy’s business.
“We didn't invent anything,” said Sagie. “We just made it much, much better.”
He gave the example of Regis, a large office rental company, which recently had its lunch eaten by WeWork, which is now exponentially bigger than Regis ever was. “WeWork was able to recognize a need in a very specific way that allowed them to create a better solution,” said Sagie. “They made it a community of co-working spaces and they created the right atmosphere. We look at it the same way in car-sharing.”
Envoy is also democratizing EVs by offering its service in disadvantaged communities, where residents might not otherwise be able to afford a plug-in car. This is helping to solve other issues indirectly, Sagie said. In Sacramento, for instance, access to shared EVs is enabling families to leave the so-called food desert to buy healthier meals.
“Somebody told us, ‘I'm not going to take my car because there are different calculations, because [of the] gas cost,’” said Sagie. But when there’s a car on-site, residents can justify leaving home to find better food, take their kids to school, participate in the gig economy, or do whatever else they need to do.
Borrow — then buy?
The L.A.-based startup Borrow has a similar take to Envoy on making EVs more accessible.
Borrow is making EVs more consumer-friendly by offering leases as short as three months, along with roadside assistance and customer service, so that there’s less risk and more flexibility in going electric. The car also comes with a $15 per month charging credit that been shown to cover all of a user’s public charging needs.
This model is working, said founder and CEO Rodrigo De Guzman. Borrow’s fleet is fully subscribed and currently has a waiting list. Plus, customers are coming back.
“We’re converting people to EV drivers,” De Guzman said on the sidelines of the L.A. Auto Show this week.
Borrow’s business has unintentionally become an EV test drive service, because it’s made driving an EV so accessible and convenient. The startup is now exploring options for monetizing the test-drive-as-a-service model and is currently in discussions with large corporations to offer short-term lease EVs to their employees.
Consumer-friendly EV charging
Setting the vehicles aside, EV charging presents its own set of questions from a consumer-facing perspective.
Most EV buyers have made the move to electric because it didn’t require much, if any, sacrifice. That usually means they own a home or already have access to a dedicated place to charge, according to Robert Barrosa, director of utility strategy at Electrify America.
“People buying EVs made it fit for their lifestyle. But if you’re trying to expand the market from there, we have to get to a world where a consumer can go to a dealership and not have to worry about how they’re going to fuel their EV,” he said, at the recent L.A. CoMotion event. “To get to that world, you need this ubiquitous type of charging, and the way we see that is you need high-powered DC fast charging so you can mimic fueling today.”
The EV charging industry has to think through real-world case scenarios, Barrosa explained. For instance, someone may have access to workplace charging today, but still decide not to go electric because of the charging uncertainty around changing jobs.
For Barrosa, the central question is: “How do you mimic today’s fueling model to get drivers of today in [an electric] car sooner than later?”
Cathy Zoi, CEO of EVgo, has a similar point of view. For her, the industry’s top priority is to get more charging stations out in the world, as fast as possible.
“We have to get ahead of the puck,” said Zoi, referencing a famous Wayne Gretzky quote, at L.A. CoMotion. And to do that, she said, EV charging needs public-private partnerships, like the recent agreement EVgo signed with the State of Virginia.
Richard Bruce, director of energy, technology and innovation at the U.K. department of transport, echoed that building out more EV infrastructure is important. That’s true even if it isn’t used, he said.
There are two types of infrastructure: the kind that customers need on a daily basis, and the visible kind that customers can see (generally rapid charge points on strategic roads) and feel confident buying an EV as a result. “They probably won’t use it, but they want to know it’s there,” Bruce said.
One of his biggest consumer-related concerns isn’t even a real problem yet.
“The issue for me is people without off-street parking,” Bruce said, which represents around 60 percent of people in the U.K. “They’re going to be beholden possibly to third parties that will charge them more for their energy,” while wealthier people can charge at home in their garages at lower cost.
It creates an equity issue, said Bruce, which is “a really tricky issue to solve going forward.”
Victoria Beasley, principal at Prelude Ventures, said her concern is that the user interface on most EV charging stations “is not particularly friendly.”
EV drivers often struggle to find out which charging stations are available, how they can pay for it, and for how long they can be at a station, among other things. “One place we do think there will be innovation is on that usability side,” she said. ”So that’s where we’re spending a lot of time.”
Vehicle price and range are often cited as barriers to EV adoption, but the success (or failure) of the EV revolution rests on many more — often nuanced — elements. That means there’s ample opportunity for innovation and new business models as the EV ecosystem evolves.