Riding the Tesla Model 3 Wave: Are We Ready?

Guest Blog Post: Leah Y. Parks is a journalist in the electricity industry and associate editor of ElectricityPolicy.com and Electricity Daily, and, she's an advisor to Oregonians for Renewable Energy Progress. She is also co-author of the book "All-Electric America: A Climate Solution and the Hopeful Future"*

Tesla Model 3 pre-orders surprised, amazed, and beat expectations. The end of oil powered cars is being called. With more certainty that an electric transportation future is coming faster than forecasted, we dare not only dream, but must prepare. The prospect of a larger than expected electric vehicle (EV) influx is exciting news, but are our communities ready?

A robust charging infrastructure will be required to manage the needs of the many new Model 3 and other EVs coming online. Although Tesla Motors [NASDAQ: TSLA] plans to double its Supercharging network and increase the destination charging program four-fold, there is concern that this will not be enough for Model 3 owners. A recent CleanTechnica article describes how we are at “a critical junction” where we are moving from the phase of “the Early Adopters” to “the Early Majority” and, “left unmanaged, the volume of vehicles would quickly overwhelm the current and planned super fast charging network and render it effectively unusable.”

We will need more than just Tesla to help develop a robust charging infrastructure for the 21st century transportation system. David R. Keith, an assistant professor at MIT Sloan School of Management, points out that, “America currently has nearly 100,000 public charging points, and will need a whole lot more if Tesla’s Model 3 is to really take off.” The majority of EV drivers are in the city and Keith believes that EVs, “challenge the conventions that underpin how we live our lives and build our cities.”

Businesses, cities and utilities would greatly benefit from evaluating if they are ready for large EV penetration. As communities scramble to figure out how many EVs will hit their roads in these next two-to-five years, we can most certainly expect opportunities, challenges, and conflict on the horizon. California is already showing some of the associated growing pains. As Model 3 pre-orders continue to climb, cities already appear to be responding.

New York City lawmakers, in anticipation of cheaper electric vehicles and particularly Tesla’s Model 3, held a hearing this April on a bill for installing new charging stations. They want to be prepared for the inexpensive EVs soon to hit the market that they believe, “will create a sudden need for charging stations in all five boroughs.”

It appears Bloomberg’s recent prophetic article was correct or perhaps even underestimates how fast the number of cars with plugs will grow and displace their fossil fuel predecessors. “Takeoff” by 2020 and the projection that 35% of all new vehicles by 2040 will have a plug, no longer seems like an EV enthusiast’s pipedream, but instead entirely plausible. Tony Seba, lecturer in entrepreneurship, disruption and clean energy at Stanford University, believes the transformation to all-electric transportation will happen by 2030. He explains that if we just look at the last turn of the century we can see how quickly disruption can happen. In just 13 years, from 1900 to 1913, New York City went from a street filled with horse-and-buggies to one filled with cars.

As of April 15, 2016, Tesla Model 3 preorders were reported to be approaching 400,000, an amount that is indeed significant. The chart below, presented in a recent Forbes article, shows in the U.S. how leading popular models of cars in 2015 sold less than the number of Model 3 preorders to date. We also must not forget that the Chevy Bolt is expected to come out at the end of 2016.

If we could step into an EV-ready community, let’s say in 2018, what would we want our communities to look like? In the mind’s eye of anyone dreaming about a better electric future there would be an infrastructure to both support and utilize the amazing resource that electric vehicles can be.

A woman named, Electra, for example, would find all she needed in the day to support her brand new 2018 Tesla Model 3. She would have an awesome home energy management and vehicle-to-grid (V2G) system that would allow for charging at low prices during the night, during which she could happily fill her battery for less than $1 per gallon equivalent. Her friend Buzz, living in an apartment nearby, would also have access to a charging system in the building’s garage so he wouldn’t be left out. Their utility would be happy too because, it could now have folks to sell its wind energy to instead of dumping it at night. That would keep energy suppliers and environmentalists feeling good.

Electra would find more than enough chargers in the massive Walmart parking lot where she works. There would be no need to fight with other EV owners over spots. The vehicle-to-business & V2G system would allow the utility and the building to use or provide energy to the car batteries. Now both the business (producing some of its own energy from the solar panels on its roof) and the utility are happy because there is a great new resource, employee and customer car batteries for managing both electricity load and generation. The V2G system is perfect, of course, and makes certain that the battery is fully charged when it is time to go home.

There are presently minimal Federal policies which support the development of an infrastructure for electric vehicles. This puts our cities, states, businesses and the utilities that serve our communities on the hook to make Electra and Buzz’s 2018 world happen. Cities in particular are expected to be an important player in the planning and deployment of a charging infrastructure that will help support and promote EVs for all. This of course will put pressure on our cities as planning will need to be ramped up, particularly in areas expecting a larger EV influx.

In many cities around the world we are now in a phase where policy makers are rolling up their sleeves and working through the nuts-and-bolts details that will make this future happen. Cities and states need to streamline permitting processes for charging stations, deal will smart grid communication protocols, coordinate efforts with local utilities, include business in planning, and continue to provide monetary and non-monetary incentives to mobilize demand for EVs in city fleets.

Equity for all and what is expected of our businesses, building owners, and governments will also need to be addressed. Public Policy will be developed to determine whether companies like Intel, Ikea or Walmart, whose employees’ cars sit in their parking lots all day, will have to provide charging for their employees. Utilities would be smart to be involved in encouraging planning for charging at the workplace as they will surely face generation and sub-station problems when a whole neighborhood races home after a day’s toil to plug in all at once, right at 5:30 PM.

Demands for mandatory availability for charging in apartment building garages and in lower-income communities will also be one of many important policies to evaluate. Certainly, the top question on everyone’s mind will be who is responsible to pay for this and how.

There are resources for cities to help in planning. A study from the Clinton Climate Initiative provides extensive policy options, lessons from peer cities on developing an infrastructure, and other important recommendations.

An eLab Accelerator team in Seattle, Washington, including the municipal utility, city government representatives, and industry experts, is one example of how a utility has begun planning an EV charging program. They are focusing on infrastructure deployment, engaging the business community, the impact on the distribution system, smart energy system integration and the potential for managing variability, time of charging options, customer engagement and more. A look at what countries around the world are doing as well is a must. Norway for example plans for 100 percent of new passenger cars, buses, and light commercial vehicle sales to be zero emission vehicles by 2025.

The electric utilities will most certainly need to prepare and partner with businesses and governments. A recent article on the Pecan Street experiment in Austin, Texas demonstrates how, although a charging network is completely doable, analyses is necessary to evaluate how the grid and substations will handle the increased load. Incentives, time-of-use (TOU) programs, V2G, and smart meters will become more important as the utility strives to shift load and use car batteries for balancing during the day. This, however, brings up other issues. If car owners give utilities the right to have access to the auto’s batteries, will the car manufacturers give warranties on the batteries? The good news is that justification for investing an EV infrastructure should be easier now and a no-brainer, particularly in the most “EV Friendly” regions.

Businesses will also want to begin thinking about EV expansion implications. Investment in charging may be incentivized or even required soon. Analysis of prospects to partner with utilities for V2G and Vehicle-to-Building options will most certainly be explored in more detail. There is also new opportunity for companies developing software and the internet of things (IoT) and burgeoning charging companies as well.

Preparation, however, does not mean that there won’t be conflict. California, at the forefront of the EV expansion, is demonstrating many of the the “growing pains” we should anticipate. Planners in Portland, Oregon are questioning whether EV charging stations are a cost or benefit for utility customers. A recent article describes how another point of conflict is whether utilities will need to or should be allowed to own the charging stations.

Although the electric utilities in California are investing in the infrastructure and the public utility commission has authorized putting money towards electric vehicle infrastructure, the burgeoning EV charging businesses are concerned whether California’s utilities will monopolize the charging infrastructure. The vehicle to grid (V2G) applications complicate things even more.

The list of possible issues could continue and all of this will need to get worked out sooner than later. Problems are solvable. These are exciting and transformative times with much opportunity and a bit of uncertainty. Perhaps the most exciting fact is that it is time to not just dream about the electric life lead by the likes of Electra and Buzz. Rather, it is time to plan and time to act.


*All-Electric America: A Climate Solution and the Hopeful Future, co-authored by S. David Freeman and Leah Y. Parks, discusses the energy transformation and impact of electric vehicles in more detail in their newly released book.