Toyota enters the EV ecosystem through a side door
“Alien Sighting – Toyota at the Dance” Explained that Toyota among others is poised to enter other marketplaces driven by changes in the vehicle marketplace, and the opportunities to perform an Alien Invasion aided by changes in technology and a movement towards direct to consumer offering by the auto industry in general.
Here EkaLore looks at a specific segment: energy management and Vehicle to Grid (V2G) offerings by Toyota.
Tesla Energy has led market space exploration, regulation, and practicality of using EV batteries as economic and capacity buffers for electricity grids and markets. Tesla Energy has a variety of offerings in multiple USA states and with utility brands globally. The core functionality of storing electricity in a storage battery and selling it back to the grid on demand is Battery-to-Grid (B2G). Additional elements include local storage batteries (e.g. Tesla’s version Powerwall), Internet connectivity, and economic transaction handling. B2G shifts electricity from one time period to a high demand period and pays the owner a premium for the electricity.
GM has recently announced GM Energy (running in the GM Cloud) to provide multiple offerings directly to consumers.
Hyundai Home has also announced plans in this market space.
Toyota is entering the same market space with a full offering.
Toyota’s service (“O-Uchi Kyoden”) is launching in Japan enabling participating Toyota customers to use storage batteries, solar panels (optional), and Internet connections to participate in a new style electric grid. Toyota's offering looks to provide a complete energy management package. It even goes beyond Tesla’s limitation of not going from EV-battery to grid (Vehicle to Grid V2G – primarily a regulatory limitation).
All the storage/battery competitors will grow the software sophistication and features to grow the margins and economic impact as the number of hybrids and EVs grows. The grid energy network effects and creation of “virtual electrical capacity” creates a “virtual utility” attracting new regulation and cash flows. Local market spaces (by geography and grid) have a wide variety of regulations, electrical standards, and energy economics.
The competitors are all making use of some economic assumptions:
1) “Virtual Utilities” make use of the capital asset purchases of consumers/businesses thus lowering concentrated asset costs of utilities
2) Use of electricity storage to time-shift, source-shift (dispersed solar/wind/other), or distribute capacity (emergencies) creates different arbitrage opportunities
3) Baseload costs will continue to climb as ratios between renewable, fossil-fuel, nuclear, and peaking plants shift
4) Peak load costs will continue to climb as demand changes from local weather, grid performance, storage availability, and demand controls (such as interruptible tariffs, demand pricing)
5) The regulatory/legal climate will not be settled for some time changing the economic and business cases for market space participants – with the risks primarily on asset holders not the virtual utility
Read more of EkaLore’s analysis of Alien Invaders, overwhelming competitors who seem to come out of nowhere and steal the profit out of a marketplace.
Comments