GigaOM » electric vehicles

Podcast: Power to the people — and all their connected devices

Stacey Higginbotham — Thu, 02 May 2013 11:30:56 +0000

The internet of things isn’t just about the connected home, smart cities or even gathering data on the high seas. The economics are moving to a point where utilities are seriously eying the trend of home energy management as something that might affect their bottom line, especially if the adoption of electric vehicles takes off.

Russell Shaver of Austin Energy.

In this week’s podcast I speak with Russell Shaver, a consulting engineer with Austin Energy, about it’s interest in the internet of things, and the changing economics driving the utility to care more about demand response. For example this week in Austin, the price of power on the spot market rose from the average $30 or $40 per watt to a whopping $900 per watt in Texas thanks to the temperature and the loss of some generation capacity. As a consumer I’m insulated against those price fluctuations, but Austin Energy has to pay. And those prices are only going to rise.

That makes connectivity and intelligence in the home around energy consumption worth spending money on. Hence Austin Energy’s new incentive plan that gives residents $85 if they purchase one of three connected thermostats. Listen for the details of that program as what Shaver sees as the future for connected devices and the role utilities will play.

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Show notes:
Host: Stacey Higginbotham
Guest: Russell Shaver of Austin Energy

A bit about how Austin Energy uses demand response today.
The OpenADR protocol and the need for open standards and data sharing even for energy data.
Why electric vehicles change the game for utilities and what Austin Energy wants to see from connected cars
The power of the opt-out. Especially when it’s 110 degrees and you’re hosting a party.

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Survey: Tell us your thoughts on the fate of Fisker

Jenn Marston — Thu, 25 Apr 2013 06:55:44 +0000

Electric vehicle startup Fisker Automotive appears to be inching closer and closer to bankruptcy, and owes the Department of Energy another $171 million in government loans. You can read our take on the entire saga in this piece A look under the hood: why electric car startup Fisker crashed and burned. Given the debacle, we invite GigaOM readers to weigh in with their thoughts on Fisker, electric vehicles, and how the bankruptcy could affect government spending on cleantech.

Note: Survey results will be posted on GigaOM Pro (subscription required). For survey participants who are not subscription holders, email pro-info@gigaom.com for a copy of the results.

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Getting to gross margin: Tesla’s year ahead

Adam Lesser — Thu, 28 Feb 2013 00:20:22 +0000

When GigaOM asked its readers last June to read the tea leaves on Tesla’s future, 61 percent said that Tesla would be break-even by this coming June and would be able to start making money by selling more mainstream cars. Tesla reported its Q4 numbers last week and our readers appear prescient. Founder Elon Musk told investors that the company would turn its first profit in the first quarter of 2013 after having been cash flow positive this past December.

Tesla is still a few years away from being able to sell EVs to the mass market but the company continues to plug away toward the goal. Wall Street did not like Tesla’s Q4 results, causing the share price to shed about 7 percent. The quarterly loss was worse than analysts had expected despite revenue coming in at $306 million, $7 million north of the $299 million consensus estimate.

Getting to gross margin

The earnings and revenue numbers highlight a core theme for 2013 and Tesla, which will revolve around getting to the 25 percent gross margin that Musk has promised, a milestone he reiterated on the investor conference call last Wednesday. For the fourth quarter, the gross margin was just 8 percent, owing to the high expense of ramping production and reaching economies of scale for a factory that’s geared to produce just 5,000 cars a quarter.

The small volume production of the Model S makes improving margins challenging. During Q4, Tesla flew in tires from a supplier in the Czech Republic in order to meet production goals. Air freight costs about ten times shipping freight for an automotive part, and Musk noted that the costs made him want “to punch myself in the face for that one.”

Musk told the anecdote about the Czech tires to highlight that he believes a lot of excesses like overtime and supplier costs can be dealt with over time to expand margins. When Tesla reaches certain volume levels on its orders for batteries, for example, Panasonic cuts back its pricing.

Surprises: Foreign demand and leasing

And just as Tesla has some work to meet expectations in terms of gross margin, there are also potential surprises in the company in terms of demand. The European and Asian markets open up later this year as Tesla’s head of retail George Blankenship said he’s looking forward to stores in Hong Kong and Beijing.

Additionally, the Model S cannot currently be leased, which likely is a barrier for some customers who aren’t sitting on the cash to buy the luxury car. I’d expect that to change by the end of the year, though Musk was clear that he wants compelling interest rates before rolling out a program, something I suspect could be challenging. No one really knows what a Model S will be worth in 4 to 5 years when a lease would be up. It’s such a new product for an luxury EV market about which future vehicle values are mostly a mystery.

So it gets hard for any financial institution that would underwrite a leasing program to take on risk by offering lower interest rates. But we’ll see. I wouldn’t be shocked if Tesla is willing to offer a bit of a higher interest rate for leasing, knowing that in a recovering economy we’re going to start to see more widespread demand for luxury cars.

The Future

Finally, buried at the end of the conference call was a reference to the Model X, Tesla’s crossover SUV. Musk was reticent to give out numbers on early reservations for the all electric SUV, but he estimated that buying interest would be around 70 percent of that for the Model S. Delivering the Model X in 2014 is another incremental step for Tesla but it’s an important one and given how hard it was for the company to ramp production on the Model S, producing an SUV at good margins could be very difficult. Not to mention that significant R&D and selling expenses will be incurred to launch the Model X.

Tesla remains a production supply constrained company as it lacks the facilities to meet demand. The average wait time for a Model S is 5 months. And while Blankenship and Musk talked up potential future growth in Europe and Asia, it’s irrelevant in the short term because there are limits right now on how much Tesla can scale given that it can only output 20,000 cars a year. But all in all, these are good problems to have.

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The fourth quarter of 2012 in cleantech

Mon, 14 Jan 2013 08:12:23 +0000

The fourth quarter in cleantech saw attention paid to two prominent and publicly traded companies: EV maker Tesla and newly minted public listing SolarCity. It remains a transitional period for the sector as investment declines and investors look for value investments and give money to those companies able to scale with little additional capital.

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Cleantech and investment in 2013

Mon, 17 Dec 2012 17:05:16 +0000

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The next generation of battery technology

Thu, 25 Oct 2012 06:55:25 +0000

Over the next decade the advanced-battery industry will witness broad approaches to technology and project development. The market for grid-scale advanced batteries is forecasted to reflect nearly $30 billion in investment through 2020. Tapping into this potential depends on the technical and market-focused innovations of a small industry ecosystem, one that faces considerable challenges in R&D and funding.

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Cleantech third-quarter 2012

Mon, 15 Oct 2012 06:55:12 +0000

The third quarter in cleantech brought into focus the successes and challenges of more-mature companies like Tesla, Airbnb, and Zipcar. It also highlighted energy challenges in India and China. This quarter Tesla’s production schedule came under fire, and share economy leaders Airbnb raised cash while Zipcar struggled with its membership model. Meanwhile the Indian power outage in July prompted questions about how the developing economy will power itself. This quarterly wrap-up discusses these milestones and provides a near-term outlook for trends, technologies, and companies to watch in the next 18 to 24 months.

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Is Detroit buying Verizon’s LTE-connected-car vision?

Kevin Fitchard — Wed, 06 Jun 2012 21:55:08 +0000

AT&T may have its sights set on connecting the home, but its archrival Verizon Wireless has a more mobile target in mind: the connected car. It has long talked up its dream of connecting anything with wheels and a motor to its LTE network, but in recent weeks it has gotten even more aggressive in the automotive space.

VZW’s parent company, Verizon Communications, revealed on Friday it is buying up Hughes Telematics, which powers M2M applications in both consumer and commercial vehicles. On Wednesday Verizon announced the formation of the 4G Venture Forum for Connected Cars, whose mission is exactly what that name implies: finding ways to use LTE to power future automotive telematics applications.

BMW, Honda, Hyundai, Kia and Toyota have all joined the forum, but the big three automakers from Detroit are all absent. That’s surprising, given how closely Verizon has worked with U.S. automakers on concept vehicles and apps in the past and considering how aggressive Ford and General Motors have been in the connected-car space.

Their absence may just be a matter of timing — the venture just got off the ground on Wednesday — but it also might be attributable to the fact that U.S. automakers’ visions for the connected car aren’t entirely aligned with Verizon’s. They don’t necessarily want LTE in the car — at least not embedded in the dash.

While U.S. automakers embrace the idea of embedded radios for emergency services and vehicle-to-vehicle telematics, when it comes to infotainment they would rather you bring along your own connectivity. Two of the biggest connected-car platforms, Ford’s Sync and Cadillac’s CUE, depend on drivers using their own smartphones to link their apps to the network.

The logic is sound: Consumer vehicles have long replacement cycles. Meanwhile consumers trade in their smartphones for more-sophisticated models every 18 months. Any radio, processor or platform technology an automaker embeds in a car could become obsolete within a few years. As a new technology, LTE will have a long overall shelf life, but like any wireless technology its performance will improve gradually. New smartphones will be able to take advantage of those improvements in speed, capacity and efficiency, while the radios embedded in the chassis of your car will not.

Embedded connectivity will come — just not in a 4G guise

Many governments are requiring that all future cars have some form of embedded connectivity for safety reasons. And it looks like embedded M2M modules will come standard in all future electric vehicles to assist with power management. It seems like those trends would represent a big opportunity for carriers to entrench their 4G services into the dashboard. But don’t hold your breath, Airbiquity marketing VP Leo McCloskey told me in a recent interview.

Airbiquity provides technology for connected-car platforms, and McCloskey believes automakers will tackle embedded connectivity in the car with the barest of radios. GSM/EDGE networks will have more than enough juice as well as the necessary coverage to supply basic emergency call and location services and enable key applications such as remote door unlocking and tamper alerts. The big bandwidth infotainment apps, however, will continue to rely on the smartphone as a conduit, McCloskey said. “They’re going to keep in-car connectivity very low speed,” he said.

If the LTE-connected-car never comes to pass, Verizon won’t be able to rake in millions of new 4G subscriptions, but it still stands to benefit plenty. The data may be piped through the phone, but these apps will still need LTE levels of bandwidth to feed the rear-seat video monitors, 3D navigation systems, surround-sound stereos and other infotainment apps making their way into vehicles. It’s one connection, but a connection that consumes many more gigabytes.

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Ups and downs for cleantech in Q1

Mon, 16 Apr 2012 06:55:41 +0000

The year 2012 may be remembered in the cleantech space as one of both hope and disappointment. Electric vehicles from the plug-in Prius to the Mitsubishi i to the long-awaited Tesla Model S rolled out, but disappointing sales mean the market may not have caught up to innovation. Acquisitions and investments chugged along in the smart-grid market, with Landis+Gyr’s acquisition of Ecologic Analytics and the anticipation of a Silver Spring Networks IPO that has not yet materialized. Meanwhile the quest for the low-power server continued in the green data-center space with AMD’s purchase of SeaMicro for $334 million. We examine these events and others in this report, which also provides a near-term outlook of trends and companies that will be important to watch in 2012.

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Key technologies for the smart city

Wed, 28 Mar 2012 06:55:30 +0000

As more and more people move to urban areas there is an escalating need for the smart city, where technology, sustainability, citizen well-being and economic development integrate. Currently five key technology sectors are enabling the smart city: smart grids, smart transport, smart water and waste management, smart building systems, and the enabling ICT platforms for the smart city. This report examines each and provides recommendations to those key players — IT companies, telcos, utilities and real estate developers — that wish to benefit and harness those technologies.

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