Why the Tesla and electric car boom could be good news for the grid

Earlier this year, breathtaking numbers of pre-orders for the Tesla Model 3 not only shocked the auto industry, but also suggested that a transition of the U.S. and world auto fleet toward electric vehicles could happen faster than expected.

There are still only a little more than 400,000 electric vehicles on the road in the U.S., or just 0.16 percent of all cars. But predicted growth rates could have them at more than a third of new car sales globally by 2040, according to Bloomberg New Energy Finance.

As the cars and their batteries get cheaper, they'll become more and more accessible to buyers — even as a profusion of charging stations to service growing numbers of vehicles will help address the so-called "range anxiety." These trends, combined with climate-change concerns, all presage a bright future for the electric car.

All of which means that at some point, this trend could start to have key implications for the entire electricity system, says a new report released Wednesday from the energy think tank The Rocky Mountain Institute.

An electric vehicle with a 30-kilowatt-hour battery, the report notes, "stores as much electricity as the average U.S. residence consumes in a day." It adds that if all U.S. light duty cars suddenly became EVs, "they would require about 1,000 [terawatt hours] of additional electricity per year, or an increase of about one-quarter of our current electricity demand."

Clearly, a lot of EVs means a lot of electricity use. In particular, if large numbers of EVs are charging at roughly the same hour of day — and that time of day is likely to be when people get home from work, which is when electricity use spikes already — the repercussions could be massive. Electricity is most expensive during these peak hours, and power companies have to fire up so-called "peaker plants," usually driven by natural gas, to slake demand.

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"If it increased the peak, we would have to invest more money for more generation capacity for the peak, which is the most expensive kind of generation capacity," says the Rocky Mountain Institute's Chris Nelder, one of the authors of the report.

This is either a huge coming problem — or a huge opportunity. The Rocky Mountain Institute report sees it as the latter.

The idea is that if we can find ways to shift when this growing fleet of electric vehicles charge up — either toward daylight hours, when they're more likely to be powered by solar, or to overnight hours, when electricity is cheap — then it opens up a number of options and efficiencies. The result, the report says, could actually be more renewables on the grid, fewer greenhouse gas emissions and cheaper electricity prices.

"Instead of investing in this peak capacity, we want to shift that charging so that it happens in the middle of the night when you've got baseload capacity sitting there running," says Nelder. The result, he says, could "actually optimize the use of all the other assets on the grid. And in so doing, it could actually reduce the per kilowatt-hour cost of electricity."

Chris Mooney writes for the Washington Post.

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Faraday Future seeks approval to build electric cars in California

Source: Why the Tesla and electric car boom could be good news for the grid

Board OKs Tax Credit for 3rd California Electric Car Company

A state board on Thursday approved $10 million in tax credits for NextEV USA, the latest electric vehicle company to establish its U.S. headquarters in California.

The company with Chinese financing based in San Jose, California, is the third in the hyper-competitive electric car market to receive a multimillion-dollar tax credit from California Competes, a board that hands out credits to promote job creation.

NextEV is promising to create more than 900 research and development jobs in California by 2020 in exchange for the tax credits, which were among nearly $47 million approved Thursday.

The company's first commercial vehicles are slated to go to market in China next year, NextEV attorney Paula Brown told the board, but the "brains and the heart of that car is Silicon Valley."

NextEV has not decided where to conduct its manufacturing, but is considering California, Brown said. The jobs being added will be primarily in research, engineering and design, and could include a San Francisco design center, she said.

"2019 will be a global vehicle, which means it has to be much higher safety standards than the vehicle that we're planning for China," Brown said.

Gov. Jerry Brown's administration previously awarded $15 million for Tesla for 4,400 jobs. Tesla opted last year to build its new battery plant in neighboring Nevada.

The administration also approved $12.7 million for Glendale-based Faraday Future, which has promised to create nearly 2,000 jobs at facilities in Gardena, Rancho Dominguez, San Jose and Redwood City by 2020. The Chinese-owned company also has broken ground on a Nevada manufacturing facility.

Other credits approved Thursday include:

— $6 million to OWB Packers Inc. to create 605 jobs in Brawley, in the Imperial Valley near the Mexican border.

— $3 million to Pabst Brewing Company to create 328 jobs in northern or central California.

— $3 million to GreenPower Motor Company Inc., an electric bus manufacturing company, to create 190 jobs in Porterville.

— $1.6 million to Qico Inc., a cremation equipment manufacturer, to create 80 jobs in San Diego.

The board also rescinded three tax credits after the companies said they would not meet their job creation targets, including $1.5 million approved for IBM, which had promised to invest nearly $90 million in office space, furniture and fixtures and hire 84 full-time employees in San Francisco by 2017 at a minimum annual salary of $135,000.

The state Franchise Tax Board reviews the businesses after the tax credits are approved, but it does not make those records public.

In response to a California Public Records Act request from The Associated Press about the IBM tax credit, the agency released a one-page document that said "Go-Biz determined that IBM will not meet its milestones and that it is in the best interest of California" for the credit to be returned. It said IBM did not object.

In a statement provided to the AP, the company noted that it never collected any of the tax credits.

Source: Board OKs Tax Credit for 3rd California Electric Car Company

Tracy, Sacramento on short list for future electric-car factory

Electric-car maker Atieva is considering sites in Sacramento and Tracy for its first $530 million manufacturing plant, according to state documents.

Founded in 2007 by former Tesla and Oracle executives, Atieva is currently headquartered in Palo Alto and has received significant support from investors in China.

The company, which is designing a sedan able to go 300 miles on a single charge, plans to begin selling its first cars in 2018.

A staff report released in January by the California Alternative Energy and Advanced Transportation Financing Authority recommended Atieva receive more than $44 million in tax breaks if it builds in California.

"Site selection for both the new headquarters and the manufacturing facility is currently underway with potential locations for the manufacturing facility identified in Tracy and Sacramento, as well as out-of-state locations," the report stated.

The report estimated the project would generate 250 construction jobs and 1,297 permanent jobs.

Company executives recently told Reuters news agency they plan to make a final decision by the end of the year.

Alejandro Ruiz, a program manager for the Authority, told KCRA 3 on Thursday the project is still active and a decision is expected sometime this summer.

The Greater Sacramento Area Economic Council is charged with attracting companies to the region.

Executive Director Barry Broome declined to comment, citing a non-disclosure agreement with Atieva.

A message left at Atieva headquarters was not immediately returned.

"I don't have any inside information (on) exactly where they're looking at," said state Sen. Richard Pan of Sacramento.

However, Pan said potential sites would likely include McClellan Air Park in North Highlands and Metro Air Park near Sacramento International Airport.

"We have a lower cost of living (compared) to the Bay Area, lower land costs. I mean, there's a lot of reasons why Sacramento should be the place that they want to manufacture cars," Pan said.

In 2014, California lost out to Nevada when Tesla, another electric-car maker, decided to build a new battery factory near Sparks.

The state of Nevada offered $1.3 billion in incentives, and many California officials felt that was too expensive too match.

Sacramento Mayor-elect Darrell Steinberg, who was the president pro tem of the state Senate at the time, agreed with the decision.

"If the company or another state bids that much higher and we can't or shouldn't pay that amount of money, then you win some and you lose some," he said.

Steinberg, who takes office in December, said the city should offer to streamline its permitting processes for companies like Atieva.

Source: Tracy, Sacramento on short list for future electric-car factory

VW plans major drive into electric cars

© Getty Images Around 11 million vehicles globally have been fitted with the so called "defeat devices"

Volkswagen plans to launch 30 all-electric models to reposition itself as a leader in "green" transport.

Matthias Mueller, chief executive of Europe's biggest carmaker, said huge investments would be needed as the firm moves beyond the "dieselgate" scandal.

He hopes that by 2025, all-electric cars would account for about 20-25% of the German carmaker's annual sales.

Latest figures show that sales of Volkswagen-branded cars continue to fall behind European rivals.

Outlining what he described as the "key building blocks in the new group strategy", Mr Mueller said VW aimed to "transform its core automotive business or, to put it another way, make a fundamental realignment in readiness for the new age of mobility".

VW will focus on "the most attractive and fastest-growing market segments", he said. "Special emphasis will be place on e-mobility. The group is planning a broad-based initiative in this area: it intends to launch more than 30 purely battery-powered electric vehicles over the next ten years," he said.

VW was plunged into crisis when it was revealed in the US last September that diesel engines had been fitted with software that could distort emissions tests. The company later revealed that some 11 million cars worldwide were affected.

'Integrity'

Mr Mueller said VW's transformation would involve investments in the double-digit billions of euros, funded by savings and cost-cuts, with all brands and businesses having to contribute.

He told reporters at VW headquarters, in Wolfsburg: "This will require us - following the serious setback as a result of the diesel issue - to learn from mistakes made, rectify shortcomings and establish a corporate culture that is open, value-driven and rooted in integrity."

The company's components business, spread across 26 plants, will be streamlined, and there will be a focus on cutting sales and administration costs.

On Thursday, car sales data from the European Automobile Manufacturers Association suggested that the VW group continues to suffer from the impact of the diesel scandal.

Sales of Volkswagen-branded cars rose 4.1% in May, compared to the same month last year. But that was sluggish when compared to 28.7% growth for Renault and 18.7% growth at PSA Group, owner of Peugeot and Citroen.

Market share for the group, which includes Audi, Skoda, and Seat, for the five months to May, was 23.9%, the lowest for the period since 2011.

Source: VW plans major drive into electric cars

Why the Tesla and electric car boom could actually be very good news for the grid

Earlier this year, breathtaking numbers of pre-orders for the Tesla Model 3 not only shocked the auto industry but suggested that a transition of the U.S. and world auto fleet toward electric vehicles could happen faster than expected.

There are still only a little more than 400,000 electric vehicles on the road in the United States, or just 0.16 percent of all cars. But predicted growth rates could have them at more than one-third of new car sales globally by 2040, according to Bloomberg New Energy Finance. And the growth won't just be in personal vehicles — services such as Uber and Lyft, and makers of self-driving cars such as Google and Tesla, could also drive fast growth of the electric vehicle, or EV, fleet.

As the cars and their batteries get cheaper, meanwhile, they'll become more and more accessible to buyers — even as a profusion of charging stations to service growing numbers of vehicles will help address the major psychological factor holding people back: "range anxiety." These trends, combined with climate change concerns, all presage a bright future for the electric car.

All of which means that at some point — and maybe not that far from now, at least in certain neighborhoods or areas — this trend could start to have key implications for the entire electricity system, says a new report released Wednesday from the energy think tank the Rocky Mountain Institute.

An electric vehicle with a 30-kilowatt-hour battery, the report notes, "stores as much electricity as the average U.S. residence consumes in a day." It adds that if all U.S. light duty cars suddenly became EVs, "they would require about 1,000 [terawatt hours] of additional electricity per year, or an increase of about one-quarter of our current electricity demand."

Clearly, a lot of EVs means a lot of electricity use. In particular, if large numbers of EVs are charging at roughly the same hour of day — and that time of day is likely to be when people get home from work, which is when electricity use spikes already — the repercussions could be massive. Electricity is most expensive during these peak hours, and power companies have to fire up  "peaker plants," usually driven by natural gas, to slake demand.

"If it increased the peak we would have to invest more money for more generation capacity for the peak, which is the most expensive kind of generation capacity," says the Rocky Mountain Institute's Chris Nelder, one of the authors of the report.

This is either a huge coming problem — or a huge opportunity. The Rocky Mountain Institute report sees it as the latter.

The idea is that if we can find ways to shift when this growing fleet of electric vehicles charge up — either toward daylight hours, when they're more likely to be powered by solar, or to overnight hours, when electricity is cheap — then it opens up a number of options and efficiencies. The result, the report says, could actually be more renewables on the grid, fewer greenhouse gas emissions and cheaper electricity prices.

"Instead of investing in this peak capacity, we want to shift that charging so that it happens in the middle of the night when you've got baseload capacity sitting there running," Nelder says. The result, he says, could "actually optimize the use of all the other assets on the grid. And in so doing, it could actually reduce the per kilowatt-hour cost of electricity."

That's one option — which could be accomplished, the report says, by creating financial incentives, in the form of time-varying electricity rates, to push more people to charge overnight, which they'll be able to do with sophisticated charging controls or apps that give the option of having cars draw power while the owners are asleep.

But another idea is to shift more charging toward the middle of the day — the prime time to take advantage of growing amounts of solar power, especially in key places like California. In this scenario, the growing number of EVs are "basically going to act like a big sponge to soak up all that power," Nelder says. This would make every mile driven by these EVs greener, and it would also probably flatten the peak of daily energy demand.

The critical factor, though, would be the vast infrastructure of charging stations that will need to accompany EV growth.

"For that load to have a positive, as opposed to negative, effect on the grid, those chargers need to be where vehicles can plug into them at the right time," the report says.

As the right time is likely to be in the middle of the day, the chargers need to be located at workplaces, malls and other public areas.

It also isn't clear who will be deploying all these chargers — private charging companies, or large utilities. The latter would presumably have a greater incentive to site them in a way that fits with an overall vision of how the grid will operate.

Nonetheless, strategically timing the charging of EVs opens some interesting possibilities for the grid. For instance, the Rocky Mountain Institute study notes that if "aggregator" companies could simultaneously control the timing of charging for large numbers of EVs (with each owner receiving a small payment for allowing this), they could then effectively switch charging off and on as a form of "demand response" that lessens pressure on the grid at key times, and so further optimizes its performance.

The report does not, however, look very deeply into one other theorized way that fleets of electric vehicles could interact with the grid — by serving as distributed batteries, and temporarily discharging power when needed for various grid services.

"I think in every case, if you plugged in your EV right now, and used it to supply energy back to the grid, it would void the warranty on the vehicle," Nelder says. He thinks this possibility is just too far off right now, though he acknowledges that that, too, could change.

For now, the primary goal is waking up the electricity sector to a coming EV boom.

"We don't want utilities and regulators sleeping on this," Nelder says, "because if they don't see it coming, and they don't put appropriate tariffs and regulations into place, if they don't make sure that they're helping get charging stations put in place at the right places where people can access them at the right time of day … they'll lose control of the situation."

Source: Why the Tesla and electric car boom could actually be very good news for the grid

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Electric car startups fuelled by Chinese fund aim to catch Tesla

A few miles from Tesla Motors Inc's Palo Alto headquarters, a Silicon Valley startup plans to challenge the electric car maker with a rival family of vehicles designed and built in the United States with major backing from Chinese investors. Atieva plans to put a premium electric sedan on the road in 2018, followed by a pair of luxury crossovers in 2020-2021, company executives told Reuters in an exclusive interview. The company is racing not just against Tesla, but also against three China-based startups that are using Silicon Valley technologists.

Two of those startups are funded by the same Chinese internet billionaire backing Atieva. All three have opened technical facilities in Silicon Valley in the past year. Only one of those companies, Faraday Future, has said it also plans to build its electric vehicles in the United States.

Unlike those companies, Atieva was started in California. Former executives from Tesla and Oracle launched it in late 2007, and hired several former Tesla hands including Atieva Chief Technology Officer Peter Rawlinson.

"SECRET SAUCE"

With its first car still at least two years away from production, Atieva is using a Mercedes-Benz Vito commercial van to test the drivetrain: a pair of high-output electric motors, a lithium-ion battery pack, inverters and controllers.

Rawlinson, who while at Tesla led engineering of the Model S sedan, said Atieva's software is the "secret sauce" tying all that hardware together to deliver a combined 900 horsepower to the 5,000-pound four-wheel-drive van he has named "Edna."

The drivetrain propels the van from zero to 60 mph in just 3.1 seconds, a fraction slower than the fastest Tesla Model S. Atieva's 0-60 acceleration target for its 2018 sedan is 2.7 seconds, faster than a 12-cylinder Ferrari supercar.

The Atieva sedan, being developed under the code name Project Cosmos, looks like a futuristic descendent of the Audi A7. Its headlamps are ultra-thin, with thousands of insect-inspired micro lenses. Its dashboard has a three-piece reconfigurable digital display that can be controlled by voice or touch.

Atieva has raised several hundred million dollars from investors including Mitsui & Co Ltd , the Japanese trading giant, and Venrock, a Silicon Valley venture capital firm connected with the Rockefeller family that once funded Intel and Apple.

CROWDED FIELD

Atieva's launch schedule would add its new sedan to a bumper crop of electric luxury vehicles vying for customers in a rarified market Tesla now has largely to itself.

This week, Daimler AG's Mercedes luxury car brand said it would unveil in October a long-range electric car it intends to put on sale before 2020. German rivals Volkswagen AG and BMW AG have said they are also working on premium electric cars.

Tesla did not reply to a request for comment about these would-be rivals, but the company is not sitting still and waiting for them to pounce. Chief Executive Officer Elon Musk raised USD1.46 billion with a share sale last month, and outlined plans to launch a high-volume Model 3 sedan in 2017.

Tesla's lead in the electric luxury vehicle segment has bolstered the price of its shares, which remain more than double their level of three years ago despite a 9 percent decline for the year to date.

MANUFACTURING PLANS

As Atieva looks for where it will build its US factory, manufacturing director Brian Barron says the company has narrowed its search to two sites and expects to choose later this year. Barron, who spent 20 years overseeing various BMW plants, said the factory will be designed to build 20,000 electric cars a year initially, ramping up in stages to 130,000 a year.

Two of Atieva's biggest shareholders are Chinese: State-owned Beijing Auto [BEJINS.UL] and a subsidiary of publicly traded LeEco, an internet company that has also declared it intends to offer an electric car. LeEco is controlled by Chinese tech entrepreneur Jia Yueting.

Jia also controls Faraday Future, an electric vehicle startup whose US headquarters is based near Los Angeles and which also shares space in LeEco's San Jose technical centre in Silicon Valley.

A fourth Chinese-backed startup, NextEV, has a new San Jose facility near LeEco. NextEV is backed by Valley venture capital firm Sequoia Capital, which funded Google in its infancy. NextEV was launched in 2014 by William Li, the founder of Chinese website Bitauto, and financed in part by Tencent, the Chinese internet services provider.

Atieva design vice president Derek Jenkins said the company will set itself apart from its Chinese rivals using its "California DNA" and its "California mindset." He did not provide specifics, but Jenkins led the team that designed the latest Mazda MX-5 Miata roadster.

Source: Electric car startups fuelled by Chinese fund aim to catch Tesla