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Stanford Researcher Says 'Tectonic Shift' Is Underway in EV Market: An Interview with Arun Majumdar

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It is no exaggeration to say that Arun Majumdar, a senior fellow at Stanford University's Precourt Institute for Energy, is one of America's deep thinkers when it comes to the future of the grid, renewable energy and electric vehicle adoption in the United States.
Stanford Researcher Says

As head of ARPA-E (Advanced Research Projects Agency - Energy) during the Obama administration he oversaw an agency designed to take on the grand challenges of energy -- everything from modernizing the grid to expanding the use of renewable energy to getting people to think more smartly about energy efficiency -- and chart a course forward.

Prior to this high profile gig, Majumdar was director of the Environmental Energy Technologies Division at the Lawrence Berkeley National Laboratory, where he was also deputy director of the lab, and professor of mechanical engineering at the University of California, Berkeley.

In 2012, he joined Google to drive Google.org's energy initiatives and advise the company on their broader energy strategy.

At Stanford, much of his work is in the fields of thermoelectric materials, heat and mass transfer, thermal management, and waste heat recovery.

Over the course of his stellar career, he has published several hundred papers, patents, and conference proceedings.

A member of the National Academy of Engineering, Majumdar served as one of the United States' Science Envoys in 2014.

REM:  We've been hearing a lot lately about electric vehicles and the major manufacturers’ plans for them in the future, thanks to the proliferation of auto shows during the winter months. To begin with, I wanted to get your high level view of where things are in regard to electric vehicles in the United States -- and beyond for that matter -- and where they're headed.

Majumdar: This is a time of a tectonic shift in the automobile industry. It is a tectonic shift because of three fundamental changes that are happening. One is electrification and that is due to, basically, a lessening or elimination of what was the hurdle before, which was the cost of the battery. That has to do with a lot of technology that is going in there, which is reducing the cost.

In the next, I would say, five to seven years, we are going to see the battery cost come down to the point that they will have range and cost parity with gasoline-based cars. So, after that, give it another 10 to 15 years and you'll see major adoption, worldwide, on the electrification side.

That's one shift that's happening, and as I said, that's due to the technology improvements to the battery and all the things that go around it.

The second one is the services that people have developed; the network system infrastructure that we have. The idea that everyone is connected allows you to do the Ubers and the Lyfts and all the other services that people have come up with.

That's changing the dynamics of the entire automotive industry because if you don't buy automobiles, then people will have to buy services. So the auto industry will have to be diligent in trying to figure out how to deal with that aspect of it.

And the third change that is happening is the whole sector of autonomous vehicles -- some level of autonomy, not full autonomy. And, at some point in the future, we will see fully autonomous driving.

REM:  Taking what you just said as our premise, who needs to deal with these shifts in the near term? Are we talking the auto industry itself? Research institutions? People like Alphabet and others in Silicon Valley? The public? At this point, whose problem is it?

Majumdar: Well, I don't know that it's a problem; it's an opportunity, right? I think we are now seeing that the automakers are adapting. Tesla has really transformed the landscape because other automakers have now said that they have to make electric vehicles. General Motors and the rest are all transitioning toward that. Some manufacturers are even saying that they will be all-electric in the future. That is a big change. It is also an opportunity, because, if they can transition quickly and bring the cost down, they will be competitive.

So I think we are seeing that movement right now. In terms of the services, the Ubers and the Lyfts and so on, they would love to see some level of autonomous driving -- preferably fully autonomous -- because then their costs go down. You don't need a driver then. So your costs go down, your margins go up, and the services could be cheaper for the consumer. Now, there are, of course, winners and losers with any change. But I think the stage we're at right now is one in which the opportunities are being recognized and people are going after them.

REM:  How does the consumer figure in all this? It wasn't all that long ago that people said, “Well, electric vehicles are nice in theory, but people are not going to buy them in great quantities until they're satisfied the charging infrastructure is in place ..." A great many people used to look at an electric vehicle and say, "I'd love to have one ... but what if I get stranded somewhere without a charging station nearby?"

Majumdar: My sense is that the adoption of EVs is going to happen quickly over the next five, seven, 10 or 15 years ... Remember, there are approximately one billion light-duty vehicles in the world today, and only six million are electric. So there's a long way to go. The charging infrastructure will have to be installed. And I think this is a fantastic opportunity for the electric utilities because, at least in the United States, the demand is flat, and this is a new source of demand growth for them.

But they will have to figure out how to put in the right infrastructure -- in fact, some of the work we've been doing at Stanford is to enable that networking knowledge to be used and leveraged to create the right infrastructure and provide services. So the backend, software/hardware, the platform has not been created yet. We are in the process of creating that right now.

What's interesting is that these are two sectors of the economy, the utility and automotive sectors, have never had to talk to each other in the past. Now they have to because of the charging issues related to electric vehicles, and I think you are going to see charging at all levels.

Certainly, there will be home charging, where you can do slow charging and you'll do fine. And there will be fast charging services that will be provided, where you can fill up your car in 10 or 15 minutes and run for a week. That's almost getting to the gasoline model that we have today. So I think you'll see a variety of things taking place as the sector grows and with that you will see a variety of different kinds of pricing and business models emerge. It's a very exciting time in that sense.

REM:  Let's dig down a little deeper into grid connectivity. When I talk to folks about wind, solar and the like, they often talk about ready access to the existing grid and concerns about load in the area around their projects. Won't a proliferation of EV charging station put a tremendous burden on the existing infrastructure? And do we need to find a way to incentivize grid improvements to address this before it becomes a problem?

Majumdar: Oh, the grid will certainly have to be upgraded, broadly speaking. Imagine if you have a fast-charging station where there are 10 charging ports ... each with 100 kilowatts. You'll need to supply a megawatt of power to that particular station. So you may need to upgrade the transformer at some point, you will need some power electronics, backend hardware ... you will have to consider the overall aging of the system, how the charging is taking place -- especially when you have charging at high rates. So yes, there will be some grid and infrastructure improvements that need to take place and those costs will most likely go into the pricing of the electricity.

And that's another thing, today the retail pricing of electricity is done in terms of cents per kilowatt hour. It's based on how much energy you use. When it comes to fast-charging, you may have to pay by kilowatt, not kilowatt hour. If you want fast-charging as opposed to slow-charging, you'll pay more for the same amount of energy. So I think we'll see a variety of pricing and business models come up and whether that will be regulated or be an open business model will depend on the local electricity commission. That in itself will lead to differences in how it all works. Because of the local decision-making involved, the situation in say, Texas and California, could be different.

REM: That's really interesting ... and it makes me think that in the long run, the way we think about EV charging is going to be a lot different from how we think about filling up at the pump today with gasoline.

Majumdar:  We still don't know how the charging infrastructure is going to play out. There are companies like Chargepoint, which is an electricity delivery company and operates a network of electric vehicle charging stations. There are fast-charging companies that are coming up. EVgo is one of them, and it's creating partnerships with various automakers, etc.

And these are just the delivery companies. Behind that is the grid backbone and the infrastructure that provides the electricity to these companies. In other words, the utilities. So I think the whole ecosystem is trying to figure out how to develop, design, plan, and operate this charging infrastructure. And this is still early days for that.

REM: I suppose there are people who would look at this and say, "Why is it taking so long to come to fruition? After all, look at all the developments we've seen in tech in the past 10 or 20 years.”

Majumdar: In my opinion, we make a mistake looking at the tech revolution and everything that's happened with phones and so on as a short-term thing. Do you know when cellular communication was first invented? It was in the 1960s and 1970s, at Bell Labs in New Jersey. And it took a long time to develop and bring the costs down. It took a long time to get to the point that we could put the Lego sets of cellular communications and satellite communications and integrated circuits together and create consumer products like smart phones and so on. Yes, there is a temptation to look at what's happening today and think something like the smart phone revolution moved very quickly, but it took a long time to develop the various components of the technology before the revolution could happen.

REM: Right.

Majumdar: So I think what we're seeing in all of these "revolutions" is that advances take time because it's not just one thing ... it's a matter of multiple things coming together and intersecting at a given time. Now, it's a natural thing for people to see the revolution occur and think it's fantastic, but they forget all the time and effort it took to get there.

REM:  Let's talk a little bit about the work it takes to get there. You're at Stanford. You worked for Google. You're on the cutting edge, so to speak. So whose job is it to serve as the incubator of the EV revolution and all these things we've discussed. Is it the universities? The tech giants? The big auto manufacturers?

Majumdar: I look at it as a partnership. We collaborate very closely with industry, whether it be with Google or Exxon Mobile or any other company. And in terms of the collaboration, the company's goal is to make products and provide services and sell them and make money. And if the time horizon is five to 10 years, they are willing to do that. But most companies are not willing to take on a challenge that is a 20-year-long challenge. Some of these things take 20 years. I mean, look at the battery revolution. Work on lithium batteries has been going on for a long time. So when you talk about challenges and issues with a longer time-scale, it's universities that generally take those on and enable the industry in many ways.

The other thing I would say is that when there are multiple sectors of the economy ... the electricity sector, for instance, the automobile sector ... and there's competition within the sectors ... universities, which are essentially nonprofit and non-moneymaking in the scheme of things ... often play the role of convener. We convene these sectors that have not spoken to each other and enable them to come together and forge partnerships. This is something that's very difficult to do without university involvement.

REM:  Let's talk about that for a moment. You, meaning the university, have brought people, competitors, together. There obviously have been agreements -- or at least meetings of the mind -- because we see the cause of electric vehicles advancing. But where are there still disagreements? What hurdles still have to be overcome?

Majumdar: I would say uncertainty. We don't exactly know how, for example, the EV charging infrastructure will play out. Are we going to get truly fast-charging? And how fast will it be? What combination of slow and fast charging will there be in the years ahead? Those are uncertainties. Now, I think it's fair to say we're going to have some kind of combination of the two, but we just don't know what that combination is ... and that will be determined partly by technology, partly by market and partly by regulators. As with anything new, there's always a fair bit of uncertainty and it's our role, as a university, to help industry navigate through all of this.

REM: Right. You know, here in South Carolina, where I'm located, the state and businesses have partnered with our major universities to create an endowed chairs program, the purpose of which is to foster economic development in specific industry sectors -- automotive, aerospace, bio-medical, etc. ... the hope being that the effort will ultimately help create jobs and strengthen the local economy. But this program is largely funded through state lottery proceeds and is dependent on the political will of our elected officials. So given what you've said about the lengthy timelines for things to come to fruition and how universities take on the longer term challenges, how do you maintain the political goodwill and support?

Majumdar: I think you have to look at the data. South Carolina has fantastic universities, but wherever the university is located, focusing on specific industry sectors or basic science, or engineering and technology, business and the humanities is necessary and important for a variety of reasons. You need a professional workforce and a workforce needs to get educated. You need people at the end of the day. You also need ideas. And that's where universities come in. Universities produce educated people and ideas. And the data shows that whenever you have good universities that are supported by the right policies, there's a good likelihood that you are going to create an eco-systems around the university that is mutually beneficial and leads to economic development. Stanford is a great example of that. So is Berkeley. And you see that around the country.

REM:  So where does your current work fall within the paradigm of the tectonic shift that you mentioned above?

Majumdar: What we -- and I should say, I am not the only one, we have a whole team out here -- but  what we are looking at is how do you plan and operate an infrastructure for EV charging that not only provides the services for EV drivers, but also provides services for the grid, so the grid can remain stable and low cost. So connectivity is something that we are working on ... to create a platform that enables lots of players to compete and work together.

REM: What preliminary conclusions have you reached in this research?

Majumdar:  We'll only just begun to think about it. We haven't done the bulk of the research yet. At this point I'd say,  that's the goal. That's the plan. But it is too early to tell whether we can actually do it or not.

REM: On a related note, regarding the way forward in the US, The New York Times recently published an article on the efforts individual states are making to fulfill the obligations the Trump administration walked away from when it abandoned the Paris Climate Accord. When we talk about EVs and charging stations and the like, how far can state action take us? Do we need the federal government as a proactive partner to bring your goals to fruition?

Majumdar: I think it needs both. Certainly California is trying to do that. As are New York, Massachusetts and a few others states. So I think the states can certainly play a role because there are some things that are under state jurisdiction, such as the electricity market ... the pricing of electricity for retail and so on. That said, you do need the federal government to play a role in meeting the nation's carbon emissions targets. So I think both have a role to play.

REM:  Of course, one thing that engages politicians, on both the state and federal level, is job creation. Sometimes, it seems, people overlook the job creation aspect of EV adoption and the rolling out of a charging station infrastructure.

Majumdar:  The reality is, this is a big, new infrastructure that has to be built and any new infrastructure that one wants to develop needs people to build it. Look at what happened in the 1930s, when all of our major dams and interstates started to be built, that was a major economic stimulus at a time when the nation sorely needed it.

REM: There's been a lot of talk since last November and of a "Green New Deal." As we speak, the details of that new deal are still very vague and very much in flux. What do you make of the conversation currently going on in Washington?

Majumdar: I'm all for people trying to do something positive in regard to the climate and environment. And the urgency of the issues involved is important to take into account when you talk about the infrastructure needs of the future -- and not just the needs in the next election cycle, but 15, 20 years on. Now, as we look at this, it is important to understand and acknowledge both that we have a market economy ... and that regulations are important to address the areas where the market has failed. So as the conversations about the Green New Deal continue, I think we really need to understand where the marketplace has worked and where it hasn't, and the same goes for our regulations. Then you have to create a policy that reflects the conclusions you've reached. That is a very, very important part of the process, and the only way the outcome of these conversations is going to be effective.

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