Can OnStar Help Chevy Sell the Volt and Utilities Manage the Load?

By Matthew Madden

Can the combination of electric vehicles and software services return General Motors to relevance? Two decades after the introduction of the EV1, not to mention the subsequent controversy created by its cancelation – well documented by the film that became an underground sensation Who Killed the Electric Car? - the Chevrolet Volt is General Motors’ latest entrant into the electric vehicle market. While the Volt may get the bulk of the press, the software services that support the automobile may be the business that allows General Motors to compete in the next generation of automotive innovation.

OnStar, a subsidiary of General Motors, has garnered success by providing communications and mobility services, security, remote diagnostics and navigation by subscription to drivers of General Motors’ vehicles. The trend towards software-enabled functionality has been guiding automotive development in recent years but the imminent adoption of electric vehicles necessitates the advancement of this functionality. OnStar, and by extension General Motors, may be well positioned to capitalize on this emerging market.
Much of the media attention is focused on the plethora of entrants into the electric vehicle market from traditional automobile manufacturers as well as upstart competitors. Yet, an equal amount of effort and capital has been dedicated to developing the infrastructure to support the assumed widespread adoption of electric vehicles. Consumers need to know the location of the nearest charging station when traveling, the availability of that charging station, the current status of their battery charge and when that charge is complete. A number of solutions have emerged to provide such information including the ChargePoint Network developed by Coulomb Technologies in conjunction with the Department of Energy, the Plug Smart Network developed by a partnership between GE and Juice Technologies and a recently announced agreement between Google and the Department of Energy to integrate electric vehicle charging station and infrastructure information into Google Maps.

The most significant barrier to adoption in many consumers’ minds is “range anxiety.” Before agreeing to convert to electric vehicles, mainstream consumers will demand assurances – in the form of more information - to alleviate this concern. Our economy thrives on information and the emerging solutions are being optimized to alleviate range anxiety. What’s the status of my battery? Where’s the next available charging station? Can I reserve that station while I eat my lunch, go to the movies or play a round of golf? Given OnStar’s history of successfully providing their drivers with the necessary information to alleviate other worries, the company’s integration of electric vehicle-centric information is a logical extension to their existing business model. The joint development between Chevrolet and OnStar to provide an information portal for the Chevy Volt holds promise in these early days.

Yet, consumer information is only half of the equation. The utilities providing the electricity for electric vehicles will also require information to manage, balance and shed load on the electricity grid relative to overall demand. Given the measured rate of adoption expected, utilities are not concerned with the influx of electric vehicles collapsing the grid at a macro level but are concerned at more granular levels such as the level of a local transformer. Electric vehicle adoption is expected to mirror the adoption of the Toyota Prius in the sense that electric vehicle clusters are expected to appear just as “Prius clusters” emerged after that vehicle’s introduction. The difference is the strain electric vehicles would place on the local transformer – often undersized or aged transformers – if multiple electric vehicles were expected to draw power at the same time every day from the same transformer. Understanding the new demand from electric vehicle will allow utilities to take proactive steps, such as upgrading an old or undersized transformer, to ensure the utility is still able to deliver the clean, reliable power we’ve come to expect.

Utilities are currently working with electric vehicle charging station infrastructure companies to provide incentives for electric vehicle owners to charge their cars at grid-friendly, off-peak hours. This solution may work at this early stage in the adoption cycle but, as more individuals convert to electric vehicles, a more elegant solution will be required.

A variety of competitors are working with utilities to understand the market requirements and develop more advanced solutions that provide utilities with both the information and ability to manage and shed electric vehicle load. Traditional equipment suppliers to the utilities, such as ABB, Siemens and GE, innovative software companies, such as GridPoint and Tendril Networks, and electric vehicle charging station and infrastructure companies, such as Coulomb Technologies and Ecotality are all competing – and, in many cases, partnering with each other – to provide the utility market with the solutions required to manage the widespread adoption of electric vehicles.

In this crowded market, the Chevy Volt/OnStar offering may be ideally positioned to combine their consumer-facing interface with a robust utility-facing portal to provide a complete telematics solution.  At the recent DistruTech conference, OnStar demonstrated the technology being developed in partnership with Comverge – a demand response leader in the commercial, industrial and residential markets. Their solution provides electricity monitoring and management via demand response, time-of-use rates (similar to the traffic shaping and policing widely used by internet service providers) and data gathering to provide utilities with the information and management required to support the adoption of electric vehicles while maintaining the reliable service we’ve come to expect from our electricity providers. At last week’s Green:Net conference in San Francisco, Nick Pudar – OnStar’s VP of Planning and Business Development – mentioned the company is currently conducting trials with a number of undisclosed utilities.

There are certainly plenty of competitors in the early stage electric vehicle and infrastructure market, but the functionality provided by the OnStar subsidiary – to both consumers and utilities – may present General Motors with a compelling differentiator and a return to global competitiveness. A most unlikely outcome for those of us who’ve seen Who Killed the Electric Car?

Matthew Madden has 15 years of sales and business development experience including nearly a decade selling communications networks to the largest utilities in the country. He can be reached at matthew.madden@presidiomba.org