EVC Charging Infrastructure - Optimizing Deployment | Episode 41

  Carpool Chats Podcast |  February 01, 2022

The Biden administration has announced a goal to deploy half a million EV chargers by 2030 - but how many do we actually need? Where do we need them? What is the appropriate timing for installing them? And what types of chargers do we need considering the differing use cases and other factors affecting how, when and where vehicles charge? The Fuels Institute has commissioned a report by IHS Markit to answer these exact questions and this podcast provides a high-level overview of the report's findings.

Guest:

Mark Boyadjis, Global Technology Lead, Automotive Advisory Services, IHS Markit

Transcript

Speaker 1:
Welcome to Carpool Chats, a podcast brought to you by the Fuels Institute.

John Eichberger:
Hey, everybody. Welcome back to Carpool Chats. I'm John Eichberger with the Fuels Institute. And today we're joined by Mark Boyadjis with IHS Markit. Fuels Institute, the Electric Vehicle Council reached out to IHS Markit last year and contracted for them to do a research project for us. We said, look, the president has said, we need half a million EV chargers by 2030. And what we asked Mark and his team to help us figure out is, okay, how many do we actually need? When do we need them? Where do we need them? And for different use case scenarios, what kind do we need? I think we need to be very strategic about our deployment and our allocation resources. So Mark, thank you very much for joining us during Carpool Chats.

Mark Boyadjis:
Yeah. Thanks, John. Happy to be here. Excited.

John Eichberger:
So why don't you give us a... I think probably everybody in the audience knows who IHS Markit is, but in case there's a few out there have not heard of you guys. Can you kind of give us a quick run down on the firm you represent?

Mark Boyadjis:
Sure. IHS Markit is a global business information and market research firm. We serve industries from energy to defense, to chemical, to agriculture, to automotive and transportation, and ECR. And it's all kind of spanning around business information and helping our customers understand what's going on in the marketplace from any sorts of trends that we might be talking about. And so I specialize in the automotive sector, been here for 15 years covering vehicle technologies all that time.

John Eichberger:
So the question we posed to you guys, very simple question, right? I mean, how many chargers do we need over the next 10 to 20 years? When do we need them? Where do we need them? [inaudible 00:01:45], tell me a little bit about how you guys kind of tackled this, because it's not a small question. It's a huge question. I mean, a lot of people like to simplify it, but we have to be much more thoughtful about this. So you guys took a very detailed approach to this.

Mark Boyadjis:
Yeah. I laughed when you said it's a very simple question. It is a very simple question, but to ask it the right way, you need to really dive into it. So we've been forecasting electric vehicles for a number of years now. And the thing that's really fascinating is whenever we're doing this kind of deep level forecasting, there's not a lot of history to draw from right. Electric vehicles by and large are still newfound for most mainstream consumers. And the thing that we need to think about is how the infrastructure needs to ebb and flow alongside that growth. And the infrastructure piece is so, so important. It's the chicken before the egg or the egg before the chicken. I tend to say that the chicken came first, the car, if you think back to when Tesla started creating its enterprise, and then they built out the infrastructure, right?

Mark Boyadjis:
They built out those supercharger networks throughout. So when we took a look at how to answer this question of where will the charger growth be needed in the US, we had to think about how the industry is going to grow over the next couple of years, where it's going to grow and how it's going to grow. One thing that we recognized early on is to think about it from the federal line only is to sell it incredibly short. It's not nearly granular enough because the federal representatives, the federal government is not actually putting charging stations in the ground. All they can do is invest, pull levers, incentivize, and empower lower levels of geography and communities to get involved, be it the states, the municipalities, the utilities, or even local retail owners and that sort of thing, excuse me, real estate owners and that sort of thing. So we took a very bottom up approach matching with our top down numbers to kind of validate where the infrastructure needs were going to be.

John Eichberger:
With that being said, the federal government has $7.5* billion dollars they're looking to invest. And as you said, they're at the high level, they're looking at it from a national perspective, but we have to be a little more specific about where that money's going, because you're in Minneapolis, I'm in Virginia. Our demand for charging is going to be very different than from California, Florida, Washington, Oregon. So how do we start figuring out how we can allocate the resources most effectively to build the infrastructure where it's most needed?

Mark Boyadjis:
Yeah. So that gets into the crux of the problem, right? You have a lopsided demand curve on the US market as a whole. It looks nice and neat and clean, and it's going to grow over time. But when you look at it on a regional basis or a state by state basis, it gets quite lopsided quite quickly. I don't need to tell most of the audience that California is going to be the highest demand at state across the board. They already are. They've got leadership in terms of the sales volume and also in terms of the infrastructure, but to put some numbers to this, we see that nationwide, we're expecting about 18 million EVs to be on the road by 2030, okay. In the US alone. And to support this volume of vehicle, we estimate we need to have about 1.8 to 1.9 million chargers in the ground. And in operation by that same time.

John Eichberger:
1.8, 1.9 million. That's a lot different than the 500,000 the federal government wants to put in.

Mark Boyadjis:
Right now the 500,000 is kind of that investment case, right? We believe that there needs to be a combination of level two and level three chargers that will really extend the infrastructure capabilities across the nation. We know that there's been a heavy influence thus far on level two charging in urban and suburban areas and a pretty significant focus on level three charging in highway intersections and highway interchange opportunities. So being able to understand how that's going to be mapped out nationwide is a really, really important thing to consider. I've already mentioned, California stands alone as the top priority. They already have high volume expectations and their growth is going to keep going. But what's really interesting is that just underneath California, we have kind of a level two priority of states like Texas, states like Florida, New York and New Jersey.

Mark Boyadjis:
These are states that are going to have a rapid amount of expansion of these types of vehicles in the coming five to six years. And their infrastructure is still kind of playing catch up. In parts of Texas, we've seen the infrastructure build out in the last two years to be about 80 to 90% of its entire stock is less than two years old. Whereas in California, you already have a lot of charging stations that are being pulled out of the ground to get replaced with new ones, because they've been in operation for quite some time. So it comes down to that interplay between where the demand is needed today versus where it's going to be needed in the future.

John Eichberger:
I mean, that's really important. I mean, one of the things I saw when I was reading the earlier drafts of the report was like 15 states today represent like 85, 87% of all electric vehicles in the United States. Your forecast to 2030 is the 15 biggest states, they're going to represent like 75% of the fleet. And as the government is starting to look at how we build out a program to support growth, we need to build stations where the vehicles are going to be operating. We need to have corridors. We need to enable long driving and stuff like that. So that's a priority, but you guys really took a look at population densities and population demand curves and all that stuff to kind of build out some idea of how many chargers we're going to need in different markets. Can you kind of walk just a little bit of those findings?

Mark Boyadjis:
Sure. So yeah, that comes down to our ratio of chargers per car. And when you look at the different states, some of the lopsidedness is kind of natural. It's due to population density, right? The north central United States will not soon or ever have the same amount of population as the east coast or the west coast, right? So that is kind of a natural tendency of the distribution itself. But when you get into the level of infrastructure compared to the level of demand, it's not always those expected states with high population that we're going to see that growth. So I already mentioned California, Florida, Texas. These are areas where we have a pretty significant ratio of plug-in vehicles to public chargers. And the aim is to try and get as close to that 10 to 15 vehicles to charger number.

Mark Boyadjis:
That number is kind of an internationally recognized line for defining whether or not an infrastructure is congested or not. Okay. If you have too many cars and too few chargers, your infrastructure's congested and there's a consumer issue, right? You can't find access to charging for public needs. If you have too few cars and too much infrastructure, then you have another issue where there's a question of, well, why did we spend all this money for infrastructure that's not getting used? So in different parts of the country, we have these different numbers. In California, we expect the ratio in total, this is combined level two and level three at 23 to 24 vehicles per public charger today. In New Jersey and Arizona, we're also well beyond that threshold of number of vehicles per charger.

Mark Boyadjis:
So there's a need to have that growth in those marketplaces. Some states that are a little closer to that happy medium is Massachusetts is only at about 11. Colorado is at 12. New York, while at today, it's at 11.6 to 12, we're expecting that to grow pretty significantly. And it's all kind of comes together as to looking at the different population trends and the demographics of the market. One thing I do want to add into this, that was a really important aspect of our methodology was to look at vehicle mobility trends, right? When traditionally IHS market is doing a lot of its automotive reporting, we talk about registration, that's where people have registered the vehicles, essentially where they live.

Mark Boyadjis:
But we realized for infrastructure needs, it's not where you live, it's where you're going to drive it. And for that exact example, we saw the interplay between New York and New Jersey as quite interesting. New Yorkers were driving a significant degree and they still need to have this kind of access to charging, but there was a lot more in New Jersey people going over the Hudson, trying to get into Manhattan for work and those kind of things.

Mark Boyadjis:
It presented an opportunity where there's going to be a need for charging more on the new jerseys side, right? Because that's where people are going to be driving from. And so in each metro area, whether it's Miami, whether it's LA and San Francisco or New York metro, you need to be considering some of the nuances of where people are coming from, where their cars are going to be, how long they're going to be driving, what kind of driving conditions they're going to be in and so on and so forth.

John Eichberger:
Yeah. And that's what it comes down to is there's no simple, we need X number. The other element that I think kind of gets lost sometimes in the national global discussion is what type of charters do we need? You mentioned a lot of level two. We're going to need some DC fast chargers. What speed, what power of DC fast chargers. You've got some vehicles coming on that can absorb a 350 kilowatt. Right now there's one. Right now there's one. The anticipation is that number's going to grow, but a 350 kilowatt charging station is much more expensive than 100 kilowatt charging station and a much more expensive level two. So how do we start right sizing the deployment to get the best bang for our buck to make sure we're servicing the customers with what they need, but not wasting money or building assets that are going to sit there unutilized and just sucking in a capital.

Mark Boyadjis:
Yeah. It's another fundamental, like foundational question that we need to have answered and you can't answer it from the top down. You have to be thinking about this from the ground up and regionalizing and contextualizing the answer because what happens and what's needed in New York is different than what's going to be happening and needed in Houston. And considering those constraints, we need to think about how we're going to leverage a level two technology or a variety of level three, levels of speed and technology. So what I think is... And I'm going to be candid here. I think opinions are starting to shift on DC fast charge.

John Eichberger:
Okay.

Mark Boyadjis:
L two is by and large the most effective way to provide public charging, excuse me, the most cost effective way to provide public charging. It might not always be the most effective way. And so, as we look at the demand, we've got these cars that are going to have 300 ish mile range. There's more than one now that can receive 350 kilowatts or better. I mean, every day, right? But Consumer Electronics Show this week has shown there's been expansion on that, but the point I'm making is, is it needed to have a bunch of 350 kilowatt chargers out there? No.

John Eichberger:
It's a lot of money.

Mark Boyadjis:
No, that's a lot of money and it's a lot of real estate. Buying the chargers alone is going to cost a lot of money, but installing them is going to be even more because you need to put in transformers, you need to adapt the electricity grid. You need to have certain thresholds with how far away the transformers are to the charging stations and all this.

Mark Boyadjis:
So I think ideally what we're going to see the market evolve from is the six to 12 kilowatt level two chargers that are, I would say commoditized today. They're pretty widely distributed and easy to find and usually pretty low cost, if not free to a lower speed DC fast charge. To be candid, I believe that that 50 kilowatt range is maybe like the Goldilocks zone, because when you go into 150 kilowatt and 350 kilowatt, first of all, you might not have cars that can even receive that much. And secondly, it's really cost prohibitive to put some of that stuff in, whereas the level two charging depending upon who you ask, that could also be useless.

Mark Boyadjis:
I mean, if you have a lucid error charging on a 6.6 kilowatt level two charger, that's still going to take you over a day. So how do we find that happy medium? Well, there's 50 through 100 kilowatt DC fast chargers in that Goldilocks zone that are relatively inexpensive, don't require as much infrastructure to install and could provide that nice, happy medium between on demand charging for quick access and quick refills, or relatively quick refills, as well as the three to four hour dwell times that people are going to be experiencing when they just charge where they park. Right?

John Eichberger:
You know, it's so interesting because I talk to a lot of people about this, and I've got some out there saying level two is the bread and butter. We need a bunch of level two. I've got others saying, man, anything under 150 kilowatt is just a waste of money. Those 50 kilo.... They're dinosaurs. They're useless, but the difference is you're taking the approach the same way I am because I agree with you. You have to look at the site, the use case scenario, the consumer travel patterns, what do they need? Not everybody needs to get 70 miles in 15 minutes. Some people just need to pick up 10 to 15 miles in 10, 15 minutes or even more. There are so many different use cases, maybe if you're on a highway, long commute, long cross country, you need that higher power to get people back on the road.

John Eichberger:
But if you're in a small community where people drive 20, 30 miles a day, maybe you don't need that. Maybe the 50 kilowatt makes sense. And the 50 kilowatt's going to cost you less to get into it. It's going to cost you less to operate it. It's going to give you an ROI on that investment a lot faster than that 350 kilowatt would. So I mean, I love this approach. The bottom up approach is how we're going to optimize the use of money, it's how we're going to build an infrastructure that actually benefits the site host and the consumer in the most efficient way. And we need to have a lot more discussions like this because I get laughed out of conversations a lot when I start talking about 50 kilowatt chargers. And it's like, well, in certain cases, maybe that's all you need and why waste the money if you don't need to.

Mark Boyadjis:
Yeah. Yeah. So I tend to agree with that. There's there's one other caveat to think about is the business model. And it comes down to what is the use case of putting a charger here, right? And to your point, if we're talking about highway long haul interchange type of scenarios, yeah. They're going to need to recharge as fast as possible. They're going to be able to charge money for those electrons. And then ultimately that's going to benefit the consumers so that they can continue on with their drive. But in day in, day out business as usual electric vehicle ownership, we need to think about how the United States is a predominantly single family ownership type of housing model. And these 75 to 80% of people are still preferring to charge at home or at the workplace, if they have access to workplace charging.

Mark Boyadjis:
And, and this isn't going to change, right? Now, if you think about the European Union, or if you think about Tokyo or you think about other regions of the world, it's vastly different constraints to think about and vastly different housing mix and travel patterns, all these other things. But we're talking about the US today and in the US here we have a highly dedicated single family home ownership perspective. So I think that that's why there's a lot of pushback against lots of level two because a lot of people have level two in their garage.

Mark Boyadjis:
But not everyone will have access to a garage. You look at where the automakers want to go next, it's not Tesla owners with three car garages. It's people in multifamily housing, it's people in urban settings that have apartments that don't have garages, or if they have a garage, doesn't have access to a charging station overnight or any sort of even 120 outlet. And so how do you equip the infrastructure to feed the tidal wave of cars that we're going to see coming from the automakers beyond just the single family homeowners? So I think that's a...

John Eichberger:
If the market's going to grow and your forecast of 18 million vehicles by 2030 is pretty small, in my opinion, compared to what we're hearing from the news and hype, I think it's realistic. I just think it's going to shock people, like what do you mean? That's less than 10%. Yeah. But there's a big market. It's got the turnover. It's going to take time. But if we're going to get to a market where EVs are a significant portion of the fleet, which most people think we're going to, it's going to be populated, not just single family homeowners, there's going to be other people in multiunit dwellings who don't have assets charging, as you mentioned.

John Eichberger:
And so sighting our public charging stations where cars are stationary for prolonged periods of time is important because if you're in an apartment, but you need to charge, if there's a charging station across the street, maybe you're going to park there first. You guys actually took a look at where cars and people stay for a while to start identifying, how do you optimize charging locations? You guys, I think you were looking at cell phone usage, right?

Mark Boyadjis:
Correct. Yeah. We were using mobility data, aggregated mobility data that was anonymized of course. And what we were able to do is understand, I didn't even care whether or not this was an ICE vehicle or an electric car. I wanted to know where people were parking during the daytime because this is outside of your home, but you're going somewhere for one, four to five hours. Right. And you know, you look at any metro area, Detroit, Houston, Portland, Oregon, you can identify zones where there's parking hotspots. And so then naturally you start to think, well, in five years, those parking hotspots will have a higher percentage of electric cars in them because of the growth in electric [inaudible 00:21:01] or vehicles in operation. So let's put the public access charging stations in those urban dense areas where those people are going to be parking because I don't expect the Detroit Metro airport to move anytime soon, so we can put charging stations there.

Mark Boyadjis:
And that's a great opportunity. That's a little bit more of an extended stay type of parking situation, but you also see shopping centers, retail outlets, event centers. Frankly, I'm an avid golfer. I don't know why every single golf course, I'm always there for two and a half to four hours. Why don't they all have charging stations? You know, this is something that I think as the infrastructure develops, you'll start to see them more intelligently positioned around the parking demand because it's not where people are necessarily driving nor where they're registered. It's where they're parking for an extended period of time. That's where level two and even low speed DC fast charging is really going to be powerful.

John Eichberger:
Yeah. Your mention of golf course makes a lot more sense. I poke at some people quite often, they start talking about where we need to build chargers. And I keep hearing public libraries and I start laughing. I'm all who goes to public libraries anymore?

Mark Boyadjis:
And if you do...

John Eichberger:
Everybody's reading online.

Mark Boyadjis:
And if you do, you're dropping off books and picking up new ones. I mean, maybe I'm oversimplifying it, but you're not spending three to four hours there necessarily maybe if you're a student.

John Eichberger:
I don't. Well, when I was a kid playing dungeons and dragons we'd meet up at the library and play there, but you know, that's a different era and different times. So the study, we got the draft coming to us this week. We're going to get into peer review next week. We're talking right now towards the middle of January. The plan is we hope to get it out in the market. In Q1, we're going to expedite the preview as quick as possible, but it's fantastic.

John Eichberger:
And you know, I think you guys did an outstanding job and I really appreciate the work and the approach because you took the ground up approach, which I think is going to be so helpful to our government agencies at the state and federal level, as they start developing programs to site host and EV [inaudible 00:23:08] providers and EV manufacturers just to get their arms around what does a realistic bill about look like, that is going to serve the needs of the drivers, not the needs of politicians, not the needs of headlines, but serve the needs of drivers in the most efficient way possible. I think you guys did an outstanding job.

Mark Boyadjis:
Oh, well, I appreciate that, John. It was a really interesting kind of expedition in how we can use our data in a different way and what unique inputs, like I mentioned, the mobility data and the housing mix and these other aspects, answering the question of what is really an important input to think about when you're forecasting charging. So...

John Eichberger:
So Mark, thank you. If people want to learn more about IHS Markit, how can they learn more about the firm?

Mark Boyadjis:
Well, obviously go to the website, ihsmarkit.com over the next couple of weeks, days, months, that's going to be evolving into S & P global, but that's for another story at another time. But yeah, reach out to me on LinkedIn. You can find me there as well, but obviously ihsmarkit.com is a good landing page for all of our different research and insights.

John Eichberger:
And to you guys out there when you're typing it in be careful because auto correct always wants to change it to HIS. HIS Markit.

Mark Boyadjis:
Yes, that's true. That's true.

John Eichberger:
Make sure you [crosstalk 00:24:20].

Mark Boyadjis:
The Microsoft Office is a... well, that'll be going away soon enough as the brand transitions, but yeah.

John Eichberger:
All right, Mark. Thank you very much for the work on the project. Thank you for joining us for Carpool Chats and everybody out there stay tuned. We will be making a lot of noise when this project is ready for you guys to read and stay tuned. We're going to be teasing out a whole bunch of stuff over the next couple weeks and months. So thank you very much for tuning in. We'll see you in the next episode of Carpool Chats.