Electric vehicles: unleashing media models for EV charging
Electric vehicles: unleashing media models for EV charging
by Akid Zolkifli, associate consultant at Capgemini
Analysts have long forecasted that car owners would abandon traditional fossil-fuelled powered vehicles and go electric. Currently Electric Vehicles (EV) still only represent 1% of the global market but as large car manufacturers add to their EV portfolios and more countries ban the sale of fuel powered vehicles, it’s predicted that EV numbers worldwide will increase to 140 million by 2030.
This acceleration of EV adoption not only affords new opportunities for traditional utility companies to capitalise on the rising projections of electricity demand, but also allows newer organisations the chance to embed themselves along the value chain - be it through infrastructure installation, energy distribution or new service offerings.
The challenge lies with not how to get more drivers invested, but where owners can charge their vehicles. According to our latest Cars Online Trend Study, a lack of consumer understanding of how and where to charge e-cars is one of the biggest obstacle to purchase, with four-fifths (80%) of consumers surveyed stated the availability of charging stations as their biggest concern.
There is a need to evolve current infrastructure to ensure efficient, smooth transformation and distribution, as currently 80% of charging is carried out at home with longer travel requiring substantial planning. In fact, a total of $360 billion is required over the 8 years to meet investment requirements, yet customers EV charging behaviour is still unknown and so progress has been slow.
As such, it must look beyond itself and learn from other industries, drawing parallels and feeding of their experience.
Entertainment vs. EV Charging
With a history of serving modularised products, the entertainment and media market could be one such source of insight and experience. While not obvious at first, there are arguably strong similarities between the two industries in terms of how service providers differentiate through subscription services or bundles. This gives their customers flexibility and choice at the point of sale. With the right platforms and technologies, it could be equally achievable for EVs. If we park aside the physical infrastructure needs, the ability to deliver choice to customers removes significant uncertainty from the market, leaving room for companies to explore various avenues for differentiation.
Netflix, the market leader in entertainment, operates a monthly subscription, which allows customers an all you can binge-watch product. With a well worked out pricing strategy, an EV charging company could target the binge watcher equivalents, most likely the high-mileage drivers. This is comparable to EVgo or ChargeMaster who offer access to their EV charging points at a fixed monthly prices. Companies will bundle services to their charging options. This could be variety of tariffs, other energy services, or other vehicle services. What we should not assume, however, is that by subscribing to an EV service, the end consumer might indeed be purchasing other products directly too.
An alternative to the subscription service is the flexibility to purchase extra bundles, such as the case for NowTV and Sky Q. The capacity for on-demand services means consumers remain loyal to the basic streaming and be assured that they do not have to over commit. This model is typical for home charging EV customers. Although EVs can charge from domestic power sockets and pay via electricity bill or ‘subscription’, companies such as PodPoint and NewMotion are offering installation of EV charge points within the home or business with options of extras such as smart management optimisation of charging stations.
Finally, the traditional pay-as-you-go model such as Blinkbox and Amazon Video, allows consumers the freedom of choice and only pay for what they’ve watched. This approach is being used by Shell who have invested in 10 EV charging stations in their own petrol station as well as BP partnering with FreeWire Technologies for mobile charging service. The benefit of the pay-as-you-go model is that car drivers are used to this model and so does not require a change in consumer behaviour.
From the above, you can see that some EV charging companies are already taking initiatives and replicating the entertainment business models through subscription, extra bundles and pay-as-you go models. This has enabled them to carve their own market and increase customer loyalty through flexible options.
There are also EV charging companies which are taking on other innovative models to carve their market niches. NewMotion is using a prepay top-up cards, Ecotricity, a company popularised for its green energy initiatives, is providing discounted tariffs for home electricity bills, which in turn provides their customers discounts at their EV charging stations; and Ovo Energy is also applying discounted tariff, free memberships to charging networks and using cars to balance the national grid during times of high demand meaning owners benefit from cheaper charging.
The EV revolution
The key to EV charging success is in learning from other industries and focusing on customer centricity. Infrastructure organisation must become more flexible to the modularisation of products which in turn will appeal to different customer segments. It’s clear that all the work will reside on the technologies and platforms at the point of customer interface.
Carbon dioxide removal revenues worth £2bn a year by 2030
Carbon dioxide removal revenues could reach £2bn a year by 2030 in the UK with costs per megatonne totalling up to £400 million, according to the National Infrastructure Commission.
Engineered greenhouse gas removals will become "a major new infrastructure sector" in the coming decades - although costs are uncertain given removal technologies are in their infancy - and revenues could match that of the UK’s water sector by 2050. The Commission’s analysis suggests engineered removals technologies need to have capacity to remove five to ten megatonnes of carbon dioxide no later than 2030, and between 40 and 100 megatonnes by 2050.
The Commission states technologies fit into two categories: extracting carbon dioxide directly out of the air; and bioenergy with carbon capture technology – processing biomass to recapture carbon dioxide absorbed as the fuel grew. In both cases, the captured CO2 is then stored permanently out of the atmosphere, typically under the seabed.
The report sets out how the engineered removal and storage of carbon dioxide offers the most realistic way to mitigate the final slice of emissions expected to remain by the 2040s from sources that don’t currently have a decarbonisation solution, like aviation and agriculture.
It stresses that the potential of these technologies is “not an excuse to delay necessary action elsewhere” and cannot replace efforts to reduce emissions from sectors like road transport or power, where removals would be a more expensive alternative.
The critical role these technologies will play in meeting climate targets means government must rapidly kick start the sector so that it becomes viable by the 2030s, according to the report, which was commissioned by government in November 2020.
Early movement by the UK to develop the expertise and capacity in greenhouse gas removal technologies could create a comparative advantage, with the prospect of other countries needing to procure the knowledge and skills the UK develops.
The Commission recommends that government should support the development of this new sector in the short term with policies that drive delivery of these technologies and create demand through obligations on polluting industries, which will over time enable a competitive market to develop. Robust independent regulation must also be put in place from the start to help build public and investor confidence.
While the burden of these costs could be shared by different parts of industries required to pay for removals or in part shared with government, the report acknowledges that, over the longer term, the aim should be to have polluting sectors pay for removals they need to reach carbon targets.
Polluting industries are likely to pass a proportion of the costs onto consumers. While those with bigger household expenditures will pay more than those on lower incomes, the report underlines that government will need to identify ways of protecting vulnerable consumers and to decide where in relevant industry supply chains the costs should fall.
Chair of the National Infrastructure Commission, Sir John Armitt, said taking steps to clean our air is something we’re going to have to get used to, just as we already manage our wastewater and household refuse.
"While engineered removals will not be everyone’s favourite device in the toolkit, they are there for the hardest jobs. And in the overall project of mitigating our impact on the planet for the sake of generations to come, we need every tool we can find," he said.
“But to get close to having the sector operating where and when we need it to, the government needs to get ahead of the game now. The adaptive approach to market building we recommend will create the best environment for emerging technologies to develop quickly and show their worth, avoiding the need for government to pick winners. We know from the dramatic fall in the cost of renewables that this approach works and we must apply the lessons learned to this novel, but necessary, technology.”
The Intergovernmental Panel on Climate Change and International Energy Agency estimate a global capacity for engineered removals of 2,000 to 16,000 megatonnes of carbon dioxide each year by 2050 will be needed in order to meet global reduction targets.
Yesterday Summit Carbon Solutions received "a strategic investment" from John Deere to advance a major CCUS project (click here). The project will accelerate decarbonisation efforts across the agriculture industry by enabling the production of low carbon ethanol, resulting in the production of more sustainable food, feed, and fuel. Summit Carbon Solutions has partnered with 31 biorefineries across the Midwest United States to capture and permanently sequester their CO2 emissions.
Cory Reed, President, Agriculture & Turf Division of John Deere, said: "Carbon neutral ethanol would have a positive impact on the environment and bolster the long-term sustainability of the agriculture industry. The work Summit Carbon Solutions is doing will be critical in delivering on these goals."
McKinsey highlights a number of CCUS methods which can drive CO2 to net zero:
- Today’s leader: Enhanced oil recovery Among CO2 uses by industry, enhanced oil recovery leads the field. It accounts for around 90 percent of all CO2 usage today
- Cementing in CO2 for the ages New processes could lock up CO2 permanently in concrete, “storing” CO2 in buildings, sidewalks, or anywhere else concrete is used
- Carbon neutral fuel for jets Technically, CO2 could be used to create virtually any type of fuel. Through a chemical reaction, CO2 captured from industry can be combined with hydrogen to create synthetic gasoline, jet fuel, and diesel
- Capturing CO2 from ambient air - anywhere Direct air capture (DAC) could push CO2 emissions into negative territory in a big way
- The biomass-energy cycle: CO2 neutral or even negative Bioenergy with carbon capture and storage relies on nature to remove CO2 from the atmosphere for use elsewhere