Parker Lyons Argosy Fellow

Last week, GM announced that it would break its monthly sales record for the Chevy Volt, with August sales expected to be “well over” 2,500 vehicles. Sales of plug-in electric vehicles (PHEVs) are doing better in their second year than the Toyota Prius hybrid after it hit the market in 2000. But PHEVs still occupy a niche market when compared to overall vehicle sales, and plugging in represents a cultural shift in the way American consumers use their vehicles compared to the gasoline-powered cars we have driven for over a century.

How does the technology work? How far can I drive on a single charge? Will fuel savings make up for the additional up-front cost of the car? Where will I charge?

These are just a few of the questions consumers ask about electric vehicles, and they reflect the key barriers to adoption that commonly trouble advanced technologies such as technical challenges (batteries), complex systems (transportation infrastructure), and head-on competition with existing technologies (internal combustion engines).

Alone, automakers can only do so much to alleviate customer uncertainty—and can do even less to overcome the cultural and systemic challenges that EVs face. However, through collaboration with governments, utilities, financiers, tech-companies, charging station providers, and even other automakers, the entire industry can better position themselves to “win” in a growing market.

One way that collaboration can help move EVs closer to a tipping point is through open innovation. This approach is described by Henry Chesbrough as the use of purposeful exchanges of knowledge to accelerate internal innovation, and expand the markets for external use of innovation.

With participants from 30 cities across North America, RMI’s Project Get Ready acts as a platform for open innovation and information exchange. By enabling the flow of information across this network of cities, Project Get Ready helps identify best practices for overcoming challenges to vehicle electrification.

In my role with Project Get Ready I see open innovation playing out today as a variety of innovators work to enhance the value of EVs, with new business models emerging everyday. At the same time, I see enormous opportunity for increased collaboration. Some industry players have adopted open innovation principles and are already reaping the benefits. In 2010, utility NRG launched eVgo, the nation’s first privately funded electric vehicle charging program that provides customers with a home charging system and access to a network of public stations for one flat monthly fee.

To ensure technical feasibility, NRG partnered with Aerovironment and GE to tap into their expertise in charging equipment and infrastructure. To make sure that their network was accessible to consumers, NRG also partnered with key retailers in the launch city of Houston including grocery chain H-E-B, Best Buy, and Walgreens.

Through this open innovation partnership, NRG acquired the capability to deliver a seamless and straightforward consumer EV charging experience. Especially commendable is the foresight to partner with businesses like HEB that previously had no role in the EV marketplace. By doing so, NRG created incremental value opportunity that each partner is able to capture a share of.

Another example of open innovation is San Francisco Municipal Transportation Authority’s SFpark to , a collaboration of over 30 partners in government, academia, and the private sector. SFpark aims to improve parking and reduce traffic through real-time market based pricing, allowing drivers to check pricing and availability of nearly 20,000 spaces in San Francisco. Additionally, SFpark provides an open feed of their real-time parking data for use by developers of third party apps.

Applying the SFpark idea to EVs, we see the potential to overcome range anxiety and increase utilization of charging infrastructure by providing consumers with the location, availability, and cost of EV charging stations. Add a version of OpenTable’s reservation system into the charging stations and now we have ability to guarantee a charge if we decide to drive to the Cineplex in the suburbs.

Now imagine if applications like SFpark were integrated with your EV’s in-dash display and stereo. Ford is pursuing such a strategy with its Ford Sync AppLink Mobile Developer Network, which arms app developers with information necessary to design smartphone apps with seamless integration into the voice-activated Ford Sync system. With such connectivity, drivers will be able to use verbal commands to post a tweet with OpenBeak, or receive a coupon for nearby retailers with Roximity.

If we integrate these examples of open innovation from NRG, SFpark, and Ford, into our electric vehicles, our cars would become as much a source of information (and value) as a means of mobility. Based on stored driving habits or the errands we input to our navigation system, our cars could tell us that we will need to top off before making it all the way home. Our vehicle would show us a map of charging locations, filtered for those included in our eVgo service, if applicable. Additionally, we could see deals associated with retail charging stations, such as half price coffee at the Starbucks .5 mile away (which also has free Wi-Fi). We could then reserve our preferred spot and pay for it using our phones.

These examples demonstrate the potential of open innovation applied to the EV consumer driving experience. However, this is just the tip of the iceberg, as their lessons can be applied across the entire EV value chain to promote free flows of information between stakeholders, and enhance our understanding of the challenges we face.

Eventually, such open innovation could allow consumers, automakers, utilities, and governments to access all the information necessary to make informed decisions about electric vehicles. We have already seen how big data drives intelligent transportation, now we need public and private entities to create open platforms so all stakeholders have access to the data necessary to bring our transportation system into the 21st century.

For more on this story go to:

http://blog.rmi.org/blog_Open_Innovation_Electric_Vehicle_Marketplace

Footnote:

From The Cayman Institute

The Cayman Islands are in the perfect position to take full advantage of electric, hybrid and alternativly powered vehicles. Thanks to the forward thinking of the Cayman Isands Government (CIG), the members of the Royal Cayman Islands Police Service (who drafted the new traffic law) and the long standing efforts of John Felder of Cayman Automotive Leasing, the residents of these islands can now purchase and drive an electric vehicle. The CIG has mandated a extremely attractive rate of duty on alternativly powered vehicles (and I might add to Renewable Energy equipment which is duty free) making the purchase of these cars comparable with those with internal combustion (gas / diesel) engines. As gas and diesel prices escalate the benefits of owning one of these vehicles will become greater. You will find merchants installing charging stations in their parking lots, which they may cover with solar panels to power the charging stations as well as to power their businesses.

For the Cayman Islands it is imperative that the country get off fossil fuel. The Brent Crude prices today are $116.60 per barrel and the these will only continue to rise in future. A recent report predicts that by 2030 Saudi Arabia will no longer have oil to export as their entire prduction will be used internally. The other hallf of this equation is that their production has flatlined and world demand is rising. Traditionally these islands have imported their oil from South America, however, in a oil constrained world the major comsuming stateds will take the lion’s share leaving small island states to take what remains at whatever price the market will bear.