But as a sign of just how much electricity EVs will consume – ie, how much business they represent for power providers - one British utility is providing financial assistance to electric car consumers.
British Gas (they provide gas and electric) has teamed with Hitachi Capital Leasing Solutions to install “free” charging stations at the homes of customers who lease EVs such as the Nissan Leaf (pictured) through company schemes financed by Hitachi. The cost of the charge point gets folded into the lease deal, but the consumer does not directly see it.
The freebie mimics the way many of us acquire mobile phones today. The phone comes “free” if we commit to 18 or 24 months of service from a carrier like Vodafone or Verizon, who subsidize the cost of the device upfront and then invisibly build it into the monthly rates they charge.
Which triggers this modest proposal: why should British Gas stop at the charging point? Why not go full monty (sticking with the British theme) and provide the entire car in exchange for a long-term customer commitment to purchase electricity from the utility?
Granted, a car is more expensive than a cellphone, and monthly electricity payments that absorb the cost of a vehicle might shock a consumer beyond recognition. Goodness knows that even without adding in the cost of a car, EV users are going to see a whopping increase in their electricity bills.
But car costs will decline, especially as carmakers produce more and more of the tiny get-around-town EVs like Audi’s urban concept car. And utility companies can simply pass along a lower wholesale cost that they would presumably pay a car maker, which would be much lower than the retail price a consumer might otherwise pay.
But more to the point, the zeitgeist of “convergence” will foster a “cars as a service” financial model. Automobiles, communication devices and information technology are merging, as cars increasingly carry sensors and electronics that not only map out routes with nearly ubiquitous GPS devices, but that also monitor engine performance, find nearby garages and service stations, send maintenance alerts, locate hotels and restaurants, and even drive the vehicle.
If utilities don’t offer “cars as a service” some other entity will – maybe an Internet company or a telecommunications firm that provides information and content that makes the vehicle an all singing, dancing, smart device on wheels.
I’ll call the car of the future a transmunication device (for transportation and communication, which flows a little more smoothly than “transporcation” -- feel free to send in your better word).
The day is coming when a mobile phone or internet company will acquire or merge with an automaker and/or a utility. I keep watching for some combination, and for Google to make a move like this.
As the industries come together, carmakers will acquire the knowledge – and the stomach – to offer innovative service models.
I won’t predict when it will happen. But it will. Financial innovation will work hand-in-glove with technological innovations to reduce our CO2-spewing ways.
One final thought, circling back to the point that EVs mean growth for the electricity business. Let’s not forget that EVs’ real carbon reduction potential will come when the electricity that feeds them comes from non-carbon sources.
British Gas generated 88% of its electricity from fossil fuels – mostly natural gas – in the year through March 31, 2010, the last annual period for which they have provided a fuel mix breakdown. Maybe they can bring a wind, solar or other alternative producer into their innovative customer financing schemes of the future.