Featured Post

This is the Kodak Moment for the Auto Industry

Plug-In Drivers Not Missin' the Piston Electric vehicles are here to stay. Their market acceptance is currently small but growing...

Friday, November 21, 2014

EVs The Oregon Way: Selling Cars Without State Incentives

Oregon's Chief EV Officer recently laid out the plan that her state has been using to make EVs successful there and (spoiler alert) it is not big cash incentives.

This presentation was given at Canada's largest EV conference, the EV2014VÉ Conference & Trade Show, in Vancouver, BC. Canada currently has aboot 10,000 plug-in cars registered today and a nice projected growth curve shown below:

Back to "EVs The Oregon Way". At the conference Oregon's very own Chief EV Officer, my friend, Ashley Horvat from the Oregon Department Of Transportation, gave an overview of strategies that she's using to promote EVs in the state. Below is my paraphrasing and elaboration of the presentation. I'd like to clarify that this is in no way a dictation of her presentation, it is, rather, ideas that she inspired or my interpretation of what she said. So if you find something insightful or clever below, it is something she said. If you find something erroneous or disagreeable, I get credit for that.

Ashley Horvat,
Oregon's Chief EV Officer
Point 1 - Infrastructure Increases the Utility (and Therefore the Value) of EVs

A recent study by the International Council on Clean Transportation (ICCT) found that there are five states with EV sales which are 2-4 times higher than the national average. The states are Washington, California, Hawaii, Georgia, Oregon, and Colorado. The high EV sales can generally be correlated to state EV incentives. Washington waives a 6.5% sales tax (about $2000 on a $30,000 car), California has a $2500 incentive (plus HOV lane access), Hawai'i has a $4500 incentive, and Georgia has a whopping $5000 incentive for EVs.

It doesn't take a study to know that reducing the price of something by thousands of dollars will increase sales. The one outlier state on this top-5 list, however, is Oregon. Oregon does not have a tax rebate for buying an EV*. All that Oregon has today is a small 25% incentive for a residential charging station (and you can skip the DEQ test).

Based on 2013 electric vehicle registration data provided by IHS Automotive

* Oregon had a $750 EV incentive in 2011 and 2012, but this was discontinued in 2013.

How does Oregon make it on a list with states that offer $2000+ incentives? The state's green ethos helps, but the real reason is because of the EV charging infrastructure that's in-place in Oregon today. This infrastructure makes EVs *more valuable* here.

Oregon (at least western Oregon, where most of the state's population lives) is swimming in EV charging stations:

Oregon EV Charging Infrastructure, November 2014, via PlugShare
Having a vast EV charging infrastructure network, specifically a fast charge, means that EVs can go more places. They are not restricted to just what they can do with overnight charging. This makes them appeal to a larger segment of the car-buying population.

Incentives alone cannot increase the market size for EVs. Without an infrastructure to support them, EVs are only useful within a radius of 50% of their range. In such infrastructure barren areas battery electric EVs, even long range EVs, will only appeal to diehard few.

Tesla Motors understands this. That is why they are building a charging network across the US and in countries around the world to support their vehicles.

Let me be clear, I'm not saying EVs are worthless without infrastructure; just that they are more valuable with it. I drove an EV from 2007 until 2011 using home charging almost exclusively. It was great for commuting and errands and most of my annual miles were logged in my electric Chevy truck. Road trips, however, were out the the question. In 2011, when a Nissan Leaf replaced the electric truck, fast charge infrastructure allowed my to start taking trips like this one or this one.

EVs are not worthless without infrastructure. 
They are just more valuable with it.

Think about it this way, if you were interested in buying something, and you were on the fence about it, there are two primary ways to convince you make the purchase: one, reduce the cost; two, increase the value. State incentives are the first method, deploying EV infrastructure is the second method.

Discounts can only get you so far. For example, if I offer to sell you dog food but you don't have a dog, you are not likely to buy it, even if I offer it at half price. The product has to meet your needs. If you want people to spend their own money on a car, it has to be able to meet their transportation needs. Fast charge infrastructure enables EVs to meet many more transportation needs or scenarios.

Point 2 - Where You Put The Infrastructure Matters

Horvat told the story of the West Coast Electric Highway (WCEH) collaborative. Oregon, Washington, and California agreed to create the West Coast Electric Highway on Interstate 5 (I-5). I-5 is the major artery of the US west coast. On the ~1500 miles of I-5, you can drive from San Diego to Seattle while passing through all the major population centers of the West Coast. Making this a fast charge corridor enables much of the West Coast population to make EV roadtrips.

Oregon jumped into the WCEH project with both feet. Fast charge stations were installed every 30 to 40 miles along I-5 in Oregon. On July 4th 2012, Oregon Senator Jeff Merkley set off on an all-electric border to border drive across Oregon.

Horvat didn't stop there. Next she worked with Travel Oregon to find day trips to electrify. These scenic loops can be strung together to make longer drives. This effort put fast charging in the Columbia Gorge, the Oregon coastline, Mt. Hood, and Oregon Wine Country. This enabled EV tourism in the state without concerns about running out of charge.

Horvat pointed out that you need a deployment plan, “Don’t just give a charging station to the first place to raise their hand.”. In haste to deploy stations to spend grants or budgets by given deadlines, this happens all too often. A smattering of stations is not as useful as a well planned network.

Point 3 - Err on the Side of Action

There is no clear blueprint for mass deployment of EV infrastructure. Even when you do make detailed plans, there will be complications. It is important that you keep moving forward. One example in Oregon is the town of Elsie. This little town is between Portland and Seaside. It would be the perfect place for a fast charge station. However, they don't have the needed electrical service. Routes to other beach towns: Astoria, Tillamook, and Lincoln City were established from Portland. Once you are on the coastline, there are charging station all along the coast as far south as Port Orford.

This makes Seaside accessible from Portland, not ideal, but still possible. Elsie would still be a good spot for a charging station and maybe one will eventually be installed there. We have not given up. Until then, there’s no point in complaining about it. It’s much better to make the most of the resources you've got. Make a plan and err on the side of action.

Point 4 - Have a Dedicated Mission Control

Achieving something like this is very involved. Doing it right is a fulltime job. There are permits, electrical service considerations, signs, site hosts, partners, grants, contractors, vendors, parts ordering, government agencies, money management... You need someone with project management skills. You need someone with people skills that site hosts can talk to when they have questions. You need someone to drive consistency. You need single point of contact, a single voice of direction. In Oregon's case, that voice is Ashley Horvat, the EV Chief Officer at the Oregon Department of Transportation.

You also have to document things. Procedures need to be written down and lessons learned need to be applied the next time a charging station is planted. Horvat has published white-papers explaining the methods that Oregon has used and she gives presentations at conferences like this one in Canada.

Jerome Kersey and Ashley Horvat
on the Plug & Pinot Tour

Point 5 - Create a Brand & a Consistent Experience

Horvat and team created an appealing West Coast Electric Highway (WCEH) brand. They defined the experience for a WCEH charging locations. EV drivers should immediately recognize the signage, colors, and station design at every location. The procedures for charging is the same at every location. The charging stations themselves must stand out. There is always at least one CHAdeMO and one Level 2 station. Think Starbucks or McDonalds in terms of consistency. There are variations from location to location, but the standard menu items are always there.

Point 6 - Create Buzz

She wrapped a presentation with a video about an Oregon marketing initiative: the Plug and Pinot Tour starring former Trail Blazer star Jerome Kersey. Horvat persuaded this towering 6'7" athlete to take a Nissan Leaf on an electrified Oregon wine tasting tour. The routes were published and the wineries offered free charging. A small herd of EVs caravanned from one winery to the next, sipping pinot while they charged and reporters snapped pictures. The effort was supported and promoted by several wineries and the story showed up in several local news outlets announcing that EV tourism had come to Oregon.

Jerome Kersey plugging in on the Plug & Pinot Tour
with solar panels and grape fields in the background

In Summary

More than just cash incentives can be used to increase EV sales. In fact, direct incentives may not even be the best use of public funds if mass adoption is the goal. A robust, reliable EV charging network increases the number of car buyers that will consider buying an EV.

If you want EVs to be popular in your region/state, then that local government has to take EV-policy seriously from the Governor down to the local administrator. You need focused EV leadership that can establish direction and drive consistency.

Err on the Side of Action. A good plan today is better than a perfect plan tomorrow. Get something done and talk about it. Create a brand and buzz. EVs are an exciting new technology that offer a new way to power personal transportation. This is a once-in-a-lifetime transformation. Tell the story.

No comments:

Post a Comment