EV's And The Parking Industry – Part 1
Clyde Wilson & Dale Denda
June 2023
Clyde Wilson, of The Parking Network, picks up a conversation with Dale Denda about Electric Vehicles and parking. Dale spoke at PIE 2023 on the subject in a well attended session, including a lot of questions and audience discussion. The finer points of Parking Market Research Company’s research and the EV topic are opened up here in an interview.
Clyde Wilson: Is the media narrative on EV adoption getting it right?
Dale Denda: Only in a very narrow way, which is that electric vehicles are a reality in the marketplace at 1.3 percent of light duty vehicles for plug-ins. Based on that fact, however, all manner of unsupported EV sales projections are being offered. It seems the dominant catchphrase is, “it’s just around the corner,” meaning we just need to punt this issue another 36 months to 5 years and everything is going to take off. There’s no solid evidence that explosive growth in EVs resulting in appreciable numbers is imaginable over the next decade, at least. In the interim, however, the Parking Industry is told ‘we have to get ready’ for something that’s only poorly understood. I think it’s also ironic this narrative is fed by cut and paste ideological positions on the issue – both for and against EV Adoption – when more relevant out-of-industry sources are overlooked.
MIT modeling which shows a real possibility of collapse of EV sales if there is an imbalance with available public EV charging.
Clyde: So, the perspective is about the larger Transportation Economy. But are any other industries, out-of-parking industry sources, actually looking at the EVs in parking issue?
Dale: Of course. First, the Transportation economy’s ‘transition to electric’ is defined by huge electrical grid capacity and auto manufacturing and supply chain implications — so it’s about the larger perspective and it points to decades for this to play out. And that includes in the parking industry. In fact, literally every sector could potentially be undertaking some EV analysis. The ones that have spoken — major consultancies like McKinsey & Company have clearly stated that retail and destination, and workplace venues, will account for only 15 percent or so of all EV charging under certain assumptions. Considering the parking industry is part of that picture, we can begin to understand what a minor or at least tertiary role, parking will play. Specifically, this is measured by both capital expenditure outlays for EV chargers, and amount of power consumed by those chargers in the entire transportation economy. Both numbers hover around 15 percent, according to McKinsey.
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Clyde: What is that based on?
Dale: The analytics behind these complex model-based projections are basically unknown, except that isn’t an issue. Rather, there is important cross-confirmation seen in the output from multiple sources — and with consistent evidence a clear picture emerges. For instance, consumer survey research — by University of Chicago-NORC — reveals what people are saying. Respondents (in a stratified sample survey question base of 8000+) put workplace charging at a low priority (10 percent), while almost half (47 percent) state home charging is important. The ‘other half,’ it seems, are seeking ‘Level 3’ charging (45percent) and free charging (50 percent). In other words, large parts of the potential future EV owners group are apparently not even considering EV charging in managed parking locations. That resembles the McKinsey 15 percent projection, doesn’t it?
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Clyde: You say ‘under certain assumptions,’ what does that mean?
Dale: This is where it gets a little difficult as we’re talking about assumptions of numbers of EVs sold in this case related to numbers of chargers available. The former is based on exaggerated goal-driven narrative which can’t be found in any real sales model — only in goals. The McKinsey 15 percent projection (for parking EV charging) assumes a 2030 EV sales rate of 50 percent. We have demonstrated in order to achieve 50 percent in sales — and that’s actually increased to 65 percent very recently by the Administration — EV new vehicle sales would, basically, starting yesterday, need to proceed over the next 8 years at a 30 percent plus annual compounded rate of increase. Nothing supports that.
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Clyde: So, the 50 percent by 2030 is not important because it’s not going to happen?
Dale: It could eventually happen, and in one model that doesn’t occur until year 30 after EVs began to be sold (!). However, actually, it’s another part of the same statistic that’s more interesting; so, it’s not the threshold of new vehicle sales in a given year, say 17 million, that defines real ‘EV adoption’ progress, but rather another denominator. It’s the number of light duty vehicles in the population, which now — excluding fleets — is about 249 million going to about 255 million in 2030. By that measure, if they were able to achieve their 2030 goals, they would only attain a 14 percent EV population penetration. In fact, no one believes it even will be achieved, and only a fraction of that threshold, likely less than half, will be the norm by 2030 and for years following. So, let’s say it’s 7 percent for EVs on the road, which appears to be realistic based on yet other estimates from the Edison Electric Institute and very important modeling carried out by MIT (Massachusetts Institute of Technology). The real question becomes, what are we really talking about as far as parking industry impact, with only single digit or low double-digit proportions
of electric vehicles on the street? And even at higher EV numbers, McKinsey puts only fifteen percent or less using charging in parking. Those are pretty small numbers. Plainly stated, these figures are far too small to justify any large scale expenditure or diversion of resources for EV readiness at any stage, which is presently multiplying into the hundreds of millions of dollars in capital costs for parking facilities, and will only grow as calls for ‘EV capital planning’ continue.
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Clyde: Are you saying that EVs are not coming into the transportation economy ‘at scale,’ or EVs are just not so significant for the parking industry?
Dale: Both, potentially. And it’s not a personal opinion, rather it’s the result of the MIT modeling which shows a real possibility of collapse of EV sales if there is an imbalance with available public EV charging. That is, the whole EV issue goes away due to too few sales because of too few chargers, or moves to a different stage of very minimal deployment. As I said, the same modeling implies, in either the success or collapse scenarios, only single- to low-double-digit EV population numbers for the next couple of decades, which in and of itself limits the impact in managed parking.
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Clyde: Won’t EV owners then seek out charging availability in parking venues if there is not enough ‘public charging’?
Dale: It is a difficult question, because of chicken-and-egg feedback, you know, which actually will come first, a lot of EVs or a lot of chargers? The MIT modeling pretty clearly suggests the answer is No — nothing will replace Street-accessible, lower cost and speedy charging, all of which will NOT be found tucked away in a parking garage. And again, this isn’t notional thinking. Separate survey research from University of Chicago shows precisely these factors to be impediments to sales of Electric vehicles. These findings also fit into the MIT modeling explaining a tailspin collapse of EV sales if there isn’t sufficient ‘public’ charging. It’s not about the parking facility, it’s about the bigger environment around, outside of the facility.