University of Prince Edward Island

Electric Vehicle Pre-Infrastructure Planning A Discussion of Social, Economic, and Technological Readiness of Prince Edward Island

Georgina Vardy 10/22/2012

A localized study, focused on Prince Edward Island, Canada, compiled to assist with determining social, economic and technological readiness for electric vehicles and the related infrastructure. The study used both a Christensen based disruptive technology framework approach and traditional marketing techniques to determine social and economic readiness. Residents showed an interest and aptitude for the social changes required however the financial affordability of the electric vehicles for residents was limited without nationally available, but locally deficient, incentives. A technology scan determined that electric vehicle battery chemical content and design are determining factors in effectively satisfying social needs and acceptance. The next stage includes localized marketing development for this unique location, vehicles sales and infrastructure. PERMISSION TO USE SIGNATURE PROJECT REPORT

Title of Signature Project: Electric Vehicle Pre-Infrastructure Planning: A Discussion of Social, Economic, and Technological Readiness of Prince Edward Island

Name of Author: Georgina Vardy

Department: School of Business

Degree: Master of Business Administration Year: 2012

Name of Supervisor(s): Tim Carroll

In presenting this signature project report in partial fulfilment of the requirements for a Master of Business Administration degree from the University of Prince Edward Island, the author has agreed that the Robertson Library, University of Prince Edward Island, may make this signature project freely available for inspection and gives permission to add an electronic version of the signature project to the Digital Repository at the University of Prince Edward Island. Moreover the author further agrees that permission for extensive copying of this signature project report for scholarly purposes may be granted Dean of the School of Business. It is understood that any copying or publication or use of this signature permission. It is also understood that due recognition shall be given to the author and to the University P E I

Address: UPEI School of Business

550 University Avenue

Charlottetown, PE C1A 4P3

Summary of Findings...... 5 Summary of Conclusions ...... 5 Research Question ...... 6 Electric Vehicles ...... 8 Vehicle Categories ...... 8 Electric Vehicle History ...... 8 The Environmental Perspective ...... 11 Electric Vehicle Technologies ...... 12 Technology Diffusion ...... 12 Battery Technologies ...... 13 Research Design and Methodology ...... 15 Technology Analysis Methodology ...... 15 Disruptive Technologies Framework ...... 15 Consumer Analysis Methodology ...... 16 Environmental Propensity Framework ...... 17 Consumer Purchase Decision Process ...... 18 Automotive Industry ...... 21 The Public Questionnaire ...... 22 Marketing ...... 24 Forces that affect Market Growth ...... 24 EV Market Discussion ...... 25 Market Growth ...... 26 Global Market Overview ...... 27 P E G ‘ “ E V ...... 27 Canadian Market Overview ...... 31 Political Environment and Government...... 31 Non Government Associations ...... 33 Provincially: ...... 34 Characterizing Prince Edward Island ...... 35 PEI Environmental Propensity & Social Norms ...... 36 Environmentally ...... 36 Politically ...... 36 Socially ...... 37 Economically ...... 38 Prince Edward Island Personal Vehicle Sector ...... 41 Cost Effectiveness of Electric Vehicles on Prince Edward Island ...... 41 Mass Adoption Scenario ...... 42 Power Generation Considerations ...... 42 Power Distribution Considerations ...... 42 Power Regulation Solutions ...... 43 Rollout strategy ...... 44 Recommendations ...... 45 Possible Next Steps ...... 46 Future Research ...... 48 Works Cited ...... 50 Appendices ...... 53 Table of Electric Vehicles ...... 54 Clean Air Agenda Program Hierarchy ...... 57 Canadian Electric & Hybrid Vehicles Incentives ...... 59 EPF Description of Segments and Recommendations ...... 63 Market Analysis ...... 66 Porter 5 Forces ...... 68 Electric versus Gasoline Fuel Cost Comparison ...... 71 Survey...... 72 Survey Results ...... 76 Public Information Brochure ...... 83

Summary of Findings Electric Vehicles are the economical choice. The energy consumption costs are approximately one third of the typical gasoline fuel costs.

The average income for Islanders is well above the threshold for being able to afford an electric vehicle, yet when distributed amongst the respective income brackets this indicates that only 18% of the population translating to 17,885 Electric Vehicles has the financial means to consider the additional initial expense of an Electric Vehicle using traditional affordability techniques.

Electric Vehicles have a range well within the typified needs of Island residents. The average commute for Prince Edward Island residents is 6.2km. The electric cars on the market today have driving ranges starting at 65km and jumping quickly to 120km and then topping off at 480km. The virtues of Electric Vehicles are not well known and the public has communicated a lack of vital information.

110 kilotonnes CO2 GHG emissions could be reduced annually if the eligible population of PEI purchased Electric Vehicles (EVs). This translates to a 6.7% reduction from current emissions related GHG on PEI.

An approximated 150 GigaWatts would supply the 70,375 registered light duty vehicles on PEI if they were all Electric Vehicles. Smartgrid and V2Grid technologies are a couple of the infrastructure updates that would make the biggest difference to electricity supply and environmental power generation concerns. These technologies provide the ability for electricity distributors, such as Maritime Electric, to balance demand with supply and enable renewable energy sources to maximize contribution. Electric Vehicle owners would benefit and have the peace of mind that their investment is creating cleaner power generation as well as minimizing their costs.

Electric Vehicle adoption is likely to be most successful if the charging infrastructure is expanded beyond the 10 public charging stations installed across PEI in 2012 to include parking and mall charging, fast-charging and battery-switching stations and a significant portion of new residential and commercial construction.

Summary of Conclusions The underserved market will remain the unserved market using the price category and sales tactics currently being used in the sustainable cycle of the automotive industry. To serve the portion of the market that is still searching for reasonable transportation solutions the industry will need a radically different approach and disruptive technology could be the answer. The path to success for the electric vehicle may be along the alternative route which includes public transit, motorcycles, scooters, trains, rental vehicles, school buses, snowmobiles and other recreational vehicles.

More information needs to be pushed into the public eye. The average Islander is not aware of Electric Vehicle aspects. 99.7% of Island respondents communicated in the survey, with an average response between strongly disagree and disagree, indicating that they did not have enough information about Electric Vehicles to make a decision of whether they could make an educated decision whether to purchase or not to purchase. The communication to the public and the disclosure of government studies and Electric Vehicle testing has been lacklustre generating assumptions that the technology is no longer in the Canadian future. Opinion Leaders have the most influence during the evaluation stage of the innovation-decision process as well as for late adopters (Rogers 1964, p. 219). Government programs working on EV projects need to make informing the public a priority.

Tax or rebate incentives for Electric Vehicle purchases would make a dramatic impact on consumer awareness and adoption. An incentive of $8,000, a subsidy of $1,000 for residential charging stations and a $4,000 income tax credit for reduced fuel consumption, comparable with Quebec would be encouraged.

It is the actions of the present that will indicate the ability to maximize the results of clean energy initiatives and pollution reduction targets of the future. Enabling Electric Vehicles sales to begin now will encourage energy conservation, emissions control, and a readiness for the future.

International agencies do not see Canada as a significant participant in the clean transportation future. It is time for action to change the future: change the environmental outlook for Canada, change the opinion of international experts and change Canadian positioning in technology advancements for vehicle technologies.

Supporting infrastructure that goes beyond energy supply and the various charging apparatus should be initiated immediately. Maintenance and repair programs for colleges require development and parts and supplies providers need to be retrained and retooled.

The social constructs of PEI can be both a hindrance and a help in the adoption of Electric Vehicles. The social pressure to conform is high and can be utilized to boost Electric Vehicle utilization. The institution of mandatory participation of new construction Electric Vehicle plug-in locations and the introduction of vehicle emissions testing may have positive effects on this populous.

Research Question Internationally the environment is a continuous focus in both the media and marketing. Then why is environmentally friendly transportation not readily available and related businesses booming globally? Christensen suggests that Electric Vehicles (EVs) are part of a subcategory of technologies labelled disruptive (defined in the Research Design & Methodologies section), which follows a different take-to- market strategy for success. I suggest that there may be additional concerns that need to be addressed including social, economic, as well as technological, to make environmentally friendly transportation obtainable on PEI.

I had hoped to introduce an infrastructure plan that would alleviate range anxiety and eliminate inconvenience excuses for not purchasing an EV. Sadly my utopian outlook was short-sighted. The research thus far points out that if we build the infrastructure the consumers will not necessarily come. Are we ready as a society, is it financially reasonable, and is the technology mature enough for the EV revolution? To answer some of these questions I propose a presentation of prior research results and a characterization of Prince Edward Island for social, economic, and technological readiness for EVs.

On a small island, where the sustainable management of our resources is crucial, where rural areas enhance the characteristic beauty of the provincial landscape, where the sea is an intrinsic part of life, the integrated coordination of agricultural and fisheries production, resources management, and the respect towards the environment are a tremendous responsibility. PEI residents are influential stakeholders in guaranteeing a better quality of life for today's and future generations.

C specifics. A characterization of Prince Edward Island will include the physical area, typified driving ranges (prior research results and summarized existing data), public preconceived EV pros and cons (public questionnaire), likelihood and requirements of adoption of the technology if available (public questionnaire), economic trends, and political notions. And finally, summarizing the perspective of the local public utility and how they may or may not be preparing for an automotive revolution.

To capture a true image of Prince Edward Island there is an obligation to discuss social norms and the prevalence of an environmental propensity to allow for marketing projections. The Island has a unique culture and social hierarchy that assists in its rural characterization.

Characterizing Prince Edward Island is intended for future comparisons of ruralised areas, as urban EV studies exist.

There are significant differences in rural versus urban societies. The majority of Electric Vehicle research as well as the market that has been traditionally focused on remains urban. Yet there is a vast amount of the Canadian market that is classed as rural in every province. It is this underserved market that has to pay an exorbitant amount of their monthly income on fuel and private transportation. This portion of the market does not have the luxuries of public transport, the option of self propelled transport (bicycles or walking), nor the conveniences associated with urban living.

Often rural people look to urbanites for their example of what is economical, trendy, or convenient. The needs of the rural are overlooked, and even if they were not it is very likely that the historical pattern of following the urban population would prevail. The rural population needs affordable, technologically up-to-date, environmentally savvy access to education, goods and services.

The key benefit to be achieved is the presentation of readiness for an EV Infrastructure Plan. As a secondary benefit, this should either confirm or allay concerns related to the delayed introduction of Electric Vehicles.

Ultimately, the objective is to assist with the EV movement, even if it means that additional changes are required or a delay is necessary for success. This report is intended to assist in the eventual uptake of EVs in the Atlantic Provinces. This adoption should result in cleaner air due to a reduction in emissions originating from traffic, noise pollution, petroleum dependence as well as the achievement of national targets on air pollution and renewable energy. This project is thus being conducted in order to identify: i. Local likelihood of EV adoption; ii. Publically expressed requirements for EV adoption; and iii. Stakeholder perspectives

The need for an environmental change is undeniable, as US Vice President Al Gore confirmed in his A I T at http://www.youtube.com/playlist?list=PL1A6E2D304D264F58. This spurred on international governments to invest billions of dollars for research, international debates and panels, and action plans.

It would be prudent to begin with a high level discussion of EV technology evolution and the auto industry. This dialogue is requisite to follow the technology trends and enable an understanding for the extrapolations made.

Electric Vehicles

Vehicle Categories

Combustion Engine This type of vehicle is the 20th century standard vehicle with the gasoline or diesel powered engine and either manual or automatic transmission.

Hybrid Electric Vehicle (HEV) There are variations on this type of vehicle, those that are considered partial hybrid using the combustion engine primarily with the electric motor used to subsidize for acceleration and boost, as well as those that are considered fully hybrid utilizing the electric motor primarily and utilizing the combustion engine to generate battery energy while in motion.

Plug-In Hybrid Electric Vehicle (PHEV) The plug-in prefix is used to annotate that the battery is solely charged by an outside source (rather than by the present combustion engine) and that when the battery charge is low, the combustion engine is then used as a backup. In theory, this model could have the combustion engine and yet never utilize it.

Electric Vehicle (EV, PEV) The Electric Vehicle or the Plug-In Electric Vehicle, are one in the same. The only propulsion unit present is an electric motor and it is electricity exclusive as a fuel source. It is this type of vehicle that this study centers.

Electric Vehicle History

Early History: Over 100 years ago there were more cars on the road that ran on electric battery power than cars that ran on gasoline. EVs were among the earliest automobiles. Between 1832 and 1839, Robert Anderson of Scotland invented the first crude electric carriage(Bellis, 2006). By 1835, in Holland, a small-scale electric car was designed by Professor Stratingh of Groningen and built by his assistant Christopher Becker(Bellis, 2006). In 1881, Frenchmen Gaston Plante and Camille Faure improved battery charge storage(Specified, 2009), paving the way for electric vehicles to be mass marketed. The first nations to support their widespread development were France and Great Britain.

In the early 1900s electric automobiles held many vehicle land speed and distance records. Camille Jenatzy on April 29, 1899 in his rocket-shaped Electric Vehicle reached a top speed of 105.85 km/h(energie Schweiz, 2005).

Electric Vehicles were produced by Anthony Electric, Baker Electric, Detroit Electric, and others during the first part of the 20th century. Due to technological limitations the top speed of these early production models was limited to approximately 30 km/h. Electric Vehicles were sold as town cars to the upper class and marketed as fitting vehicles for women drivers due to their ease of operation, lack of noise and cleanliness.

In 1912 Cadillac introduced the electric starter, which simplified the task of starting the internal combustion engine(Gerdes, 2011). In the early 1880s Karl Benz developed a radiator system(Hoge, 1999-2012), along with a number of other grouped patents, which alleviated the need to stop every few minutes at water holes and horse troughs to replenish the steamers. Both of these inventions contributed to the invasive takeover of the combustion engine. Ultimately, technological advances in internal combustion engine (ICE) powered cars advanced beyond that of their electric-powered competitors. The early electric automobile industry dwindled to niche industrial applications by the 1930s.

The point-contact transistor was invented in 1947 and Henney Coachworks joined forces with Exide Batteries manufacturer National Union Electric Company to produce the first modern electric car based on transistor technology. The 72 volt Henney Kilowatt model had a top speed of 96 km/h and could travel on a full charge almost 100 kilometers. By 1961 the production was stopped before making a mass marketed product due to the cost of producing the vehicle being higher than the cost of their gasoline counterparts. Even though the Henney Kilowatt never reached mass production numbers, the transistor-based electric technology developed for the Kilowatt paved the way for modern EVs(G.N. Georgano, 1982)

Recent History Over 10 years ago Electric Cars began a comeback.

The United States California Air Resources Board (CARB) developed a zero-emissions vehicle (ZEV) mandate, which required 2 percent of a manufacturer's vehicle sales within the state to be ZEV. A race began to develop electric vehicles and to fight the mandate, a mandate which prescribed vehicle development for automotive manufacturers12.

Starting in 1996 GM produced the EV1 - 1,117 units were produced composed of either lead acid or Nickel Metal Hydride (NiMH) batteries - which could reach speeds up to 130 km/h with a driving range of 190 km. In 1998, the first production of the Honda EV Plus began using Nickel Metal Hydride batteries having a range over 160 km on a charge. Toyota also using NiMH batteries, began sales of the RAV4-EV with a range over 190 km and the eCom with a range of 100km. Nissan responded with the Hyper-mini and the Altra using a prismatic Lithium battery which boasted a range of 190km and a standard charging system that that took 5 hours at 220 Volts12.

In 1999 the EV1 vehicles were impounded upon lease end without the option to renew. The vehicles were taken back by the manufacturer and eventually destroyed. Nissan and Honda followed suit and destroyed the Hyper-minis, Altras EV P T M C destroyed the eCom and discontinued production of the RAV4 Electric Vehicle in the spring of 2003, after only eight months of production and little advertising12.

The reasons for this destruction of GM, Nissan and Honda vehicles, which were loved by their owners, are still not publicly known. All EV1s, which were the focus of a media circus, were sent straight off to Mesa, AZ, where the tires and batteries were removed, they were subjected to an 18" crush, and then trucked back to a smelter near Fontana. The 1999 EV1s were destroyed, with the exception of a few retained in Michigan proving grounds12.

It has been theorized in the documentaries 'Who Killed the Electric Car?' ‘ E C, written and directed by Chris Paine, that the Electric Vehicle programs were eliminated because they posed a threat to the billion dollar oil industry (if interested visit http://www.whokilledtheelectriccar.com/).

After much pressure from automotive manufacturers and likely other sources CARB eliminated most of the ZEV requirement, substituting a greater number of partial zero-emissions vehicles (PZEVs) and a Super Ultra Low Emissions Vehicle (SULEV) category to meet the requirement. This program adjustment was designed to obtain equivalent emissions reductions by substituting less expensive and more general purpose vehicles3. California, United States car sales drove the automotive industry into progressive action which indicates that not only does consumer behaviour influence industry development direction but also government regulations.

Low Speed Vehicles - LSVs or Neighbourhood Electric Vehicles NEVs were regular electric vehicles that were only capable of traveling at a maximum speed of 40km/h. The LSVs were created to provide a

1 http://www.evcanada.org/evhistory.aspx

2 Paine, Chris. Who Killed the Electric Car? and Revenge of the Electric Car. Documentaries introduced at Sundance Film Festival Jan 23, 2006, and Tribeca Film Festival April 22, 2011. 3 ISU Corp - Cadisys 2004 - 2008 - All Rights Reserved EV Canada Web Site V 2.6 04/12/2008

U N “ P E-Fuel Mix, is applicable across the Maritimes as fuel sources and power generation for PEI can be considered comparable or perhaps a smidgen cleaner. The power generation mix for Nova Scotia has a little more coal than the New Brunswick and PEI mix. The environmental impact of nuclear power is not considered in this assessment. Important findings from this report are: 1) that power generation is a major source of the environmental footprint of electric vehicles and that driving electric vehicles as a green source of transportation is a farce unless the electricity generation is also clean, 2) that the emissions impact is categorically dependent on the daily commuting or driving range and 3) that hybrids and fuel efficient combustion engine vehicles are similar polluters given different driving habits (Hughes, 2011).

The Dalhousie University study funded by Nova Scotia Power4 found that it was the local electricity generation methods that made the largest impact on the pollution contribution of Electric Vehicles, as can be logically concluded, and for the conventional combustion vehicles the share of pollution from well to gas tank and gas tank to wheels is more distributed. It is the electricity generation method that plays the greatest role in determining the greater contributor of pollution 5. The findings themselves are not surprising, however it gives hope for giving the power for pollution reduction to the hands which seem to cry in international forums that they have little control over the individual consumer... our government. If power generation was to become cleaner and steer away from coal and fossil fuels then improving pollution control seems attainable. The environmental impact from extracting the battery ingredients, manufacturing, and subsequently disposing of them may be the greatest environmental impact of the Electric Vehicle revolution. The Hughes and Sundaram (2011) publication ignores the environmental impact of battery development and disposal. This element is crucial in determining a holistic perspective on the environmental impact of EVs. Battery development and disposal is due to the dependency on the type of battery that will become mass marketed, which to date is not definitive and may contribute to this omission in the Dalhousie report.

The time delay between technology discovery, development and market introduction for EVs is proving to be too long to keep the public engaged and convinced that EVs are still the next evolution of transportation. Despite the type of benefits that can result from a mass conversion the research shows that technology adoption does not occur instantaneously upon exposure.

Electric Vehicle Technologies

Technology Diffusion The Canadian literature on new technology diffusion is somewhat sparse, largely due to an historical lack of longitudinal data that are required for analysis of technology mapping dynamics. The subject of T The Laws of Imitation and Ryan and Gross 1943 expansion on the identification of diffusion as a process in "The Diffusion of Hybrid Seed Corn in Two Iowa Communities.", and most recently directly related

4 Hughes, L & Sundaram, S. Do EVs Make Carbon-Sense in Nova Scotia?: A Well-to-Wheels Analysis Using Nova “ P E-Fuel Mix. 5 Calculations from the Nova Scotia Power study, as well as equalizing the comparison using 7. 3km/kWh and 10km/L. research of Rogers (1995) Diffusion of Innovations, yet there are few predictive models. Christensen introduced the concept of divergent categories for technologies, namely sustainable and disruptive. Sustainable technologies being those categories of technologies that have been studied and there is an ease of predicting the market and lifespan for the product or service; those technologies which once industry and thrive. Disruptive technologies however are those that which seem to have characteristics which are attractive, but inappropriate for the established market; they are the technologies which sweep an industry suddenly without many predictive characteristics for experts to foresee. Christensen proposed the mid-century notion of the S- curve by Rogers (1962, Figure 1) could be used to predict the arrival of the next superseding disruptive technology.

Figure 1: The S-curve diffusion of innovations according to Rogers (1962). With successive groups of consumers adopting the new technology (shown in blue), its market share (yellow) will eventually reach the saturation level.

Most technologies do follow this curve of market share penetration, it is the timeframe in which the saturation point for that particular technology will be reached that is the point of prediction. Christensen proposed that if related successive technologies were mapped along a timeline that a predictive pattern could U as the rate of diffusion of the technology could be predicted.

The Wall Street Journal published a timeline of technologies using the S-curve model following C ication. Consequently, the only known existing work is based on United States data files. There is a need for Canadian specific data and analysis as outlined in the Future Research section of this report. Battery technology and battery management systems are the sources of trajectory, this is confirmed by technology analyst Christensen (p206).

Battery Technologies There are many battery technologies that have made their way into the automobile. Traditional lead- acid batteries are no longer even considered a part of the modern automotive battery field. Nickel Metal Hydride (NiMH) is bulky and heavy which creates many limitations that affect the automotive application. Lithium Ion (Li-ION) is pricey and a global limited supply of raw materials has been publicised by the media as a concern, yet it maintains the lead in automotive manufacturing and battery technology development.

Lithium Ion Batteries LI-ION batteries have approximately three times the energy density of traditional lead-acid batteries and 50 percent more than NiMH batteries. This translates into a lighter car with a longer range.

To add concern despite reassuring raw lithium and magnesium deposits, Charles Wu, a Ford Research Managing Director argues that the primary deposits reside in non-democratic, non-westernized countries in South America and China which indicate that a reoccurrence of the Middle Eastern strife over big oil is inevitable. Bolivia is estimated by E&H magazine Bolivian governments refuse salt flat mining to extract. Jon Lauckner General Motors Vice President of - EH There are those that are both assured and confident, such as Serge Yoccoz Renault Project Director for EVs, material will be enough for the next decade... and in the future, EH p52), as well as those that are fearful for the longevity of the resource such as Thomas Brachmann, “ H ‘D E W EH Lithium Ion batteries continue to be the design of choice despite other interesting battery technologies.

Other Batteries Technologies The sky is the limit when you begin to investigate the types of batteries that have been developed for testing. Ilika Technologies is a high volume battery testing facility that has seen quite a variety of battery types including Lithium ferro-phosphate prismatic (LiFePO4), ion super polymers, nano Lithium titonate, a variety of phosphates, manganese cocktails, and even exterior charging options such as sublevel electroconductive polymers (in the roads), and wireless power transfer options. High capacity capacitors have been found to be a good supplementary technology to extend the capabilities of the limited battery technologies (new MOSFET designs) including acceleration boosts or range backup extension.

Will a combination of various technologies spell the success for EVs? The best design would include many of the various afore mentioned technologies, yet the likelihood of a manufacturer choosing to make a quality product at a reasonable price is too outlandish to imagine as realistic.

Automotive manufacturers are not driving, nor really pushing significant funding toward, these technologies due to the contradictory pressures of the presently wildly profitable sustainable technology of the combustion engine. The low to mid price vehicle demand does not match the parts and profit established ratio. The high cost of batteries is resulting from a serious economies of scale conundrum. In addition there are limited experienced service and maintenance providers, especially here in Canada. Supplementary Electric Vehicle research is needed. Research Design and Methodology Defining the research methodology is just as important as the research itself. Two methodologies were used to guide the direction of the research conducted; this was done to integrate both a framework for the technology investigation and marketing techniques which incorporated the centrality of the environmental element of the Electric Vehicle.

Technology Analysis Methodology Categorizing the type of technology that Electric Vehicles fits into is key if it leads to a successful approach to designing a marketing plan. This success has yet to be realized. Christensen proposes that there are both sustainable and disruptive technologies. This definition is helpful in deciphering if traditional techniques and known architectures will be useful or if they need to be abandoned for a much more directionally free and financially limiting design. Christensen introduces and elaborates on Electric Vehicles as a specific example of disruptive technology. This definition helps to explain why traditional and existing automobile manufacturers have not passionately embraced the Electric Vehicle nor experienced the sales that are possible given this fabulous new technology.

Disruptive Technologies Framework The Disruptive Technologies Framework is a conceptual methodology developed by Christensen. According to the DTF, disruptive technologies will not be attractive to established markets but will be valued by an emerging market.

C the presen N technologies and products require different assets and skills than likely found in existing companies. Christensen also maintains that resources must be limited and separate for independent success of the technology. Small resources for small profits.

C for where technology is greater than demand and estimates future intersections through linear extrapolations. Mortality rates for disruptive technologies are high, but do require iterative learning to fully try out potential success. New technologies are anticipated to be unsuccessful on the first try, so fail cheaply. The ultimate use for the technology is unknown therefore failure is an intrinsic step.

Obtaining a leadership position in a technology is important to grasp and take advantage of first mover benefits. This is not necessarily true for sustainable technologies.

C scale of the new division for the technology development will be too small to maintain value to the “ I that is interested in such small markets and markets that do not exist cannot be analyzed.

Christensen believes that Electric Vehicles need to be on the financial lower end or for niche users. The rise of KIA is just such an example in the automobile market. The dominant manufacturers of the modern vehicle moved upscale and left a gap in the market for lower end economical vehicles. Christensen believes that Electric Vehicles need to fill that same kind of market, an underserved portion of the market.

According to Christensen no matter how defined we make the market, due to the nature of the technology (i.e. disruptive), it will not succeed through this path and that the emerging market that will bring about success exists.

However, C technology approach is not gospel. Helfat and Lieberman (2002) contradict Christensen by stating that resource deficiencies of the birthing company can be filled through alliances, joint ventures, acquisitions, and licensing of their technologies. Afvah (2000) states that it is the resources of customers, suppliers, alliance partners, and complementors (all players in the value chain) that must be obsolete in the face of the technology for it to be disruptive. Christensen also appears to have disregarded the influence of culture. Chesborough (1999 a&b) shows the importance of continental culture in the classic Christensen example of disk drive technology development. North American firms lost their leadership position in disk drives despite their access to resources outside of the direct firms. It is the Japanese firms who hold in high regard the exclusivity of relationships that have maintained their leadership position. Danneels (2003) and Slater & Narver (1998) challenge C C D “ N His strokes are too broad and the definition of niche begins to appear to apply to the masses. D Disruptive Technology Reconsidered argues that disruptive technologies do not have clear criteria, and therefore technologies cannot be classified as Christensen proposed.

Chesborough (2001) astutely contributes that most empirical work focuses on internal validity through case studies but often does not contribute to the ability to generalize and make external validity possible. This is where the leap from theoretical notions to ex ante by Christensen is admirable and although not absolute, helpful in the real world. The disruptive technologies framework is helpful despite the contradicting possibility that the Electric Vehicle technology may have become sustainable in nature before even becoming mainstream as they are being marketed as mainstream. Furthering Christensen notions of the Electric Vehicle market not being the initial direction for success of this technology, when we apply the Resources Processes and Values Theory it informs us that the automotive industry as it exists even today, even with the electric vehicles that are manufactured, is not T that have been perfected for economic success, and the values of the manufacturers and their aftermarket service, maintenance, and turnover are not aligned with electric vehicles, they are fine tuned for internal combustion engines and sustaining the existing technology. Social and governmental pressures have kept the automotive giants in the Electric Vehicle business despite the economic imbalance. A framework that could define the technology was an obvious requirement, but there was another vital element to researching marketing of an Electric Vehicle, namely the environmental factor.

Consumer Analysis Methodology The consumer is central to the direction of this product we call Electric Vehicles. It is not only the decision process that the buyer navigates, but also the environmental propensity that weighs on the decision to purchase a green product like the Electric Vehicle. The green initiative and an environmental conscience can contribute to an eventual purchase.

Environmental Propensity Framework The Environmental Propensity Framework(Oliver & Rosen, Fall 2010) develops marketing strategies categorized by environmental values and environmental self efficacy. The study offers a classification of consumers by categorizing them by environmental values and environmental self efficacy. This classification assists with developing marketing strategies based on these environmental opinions of the individual consumer. The study also suggests gas prices, tax incentives, fuel economy and social factors as significant contributors to the marketing strategies, although the study results do not directly try to include these factors in the marketing outcomes. The EPF suggests the following five categories along with an approximation on the distribution of westernized nations:

True Greens (20 percent) Environmental activists; think and act green; do not think there are barriers to action Low Potency Greens (20 percent) Strong attitudes but little action unless it is easy because issue is too large to handle Moderate Greens (30 percent) Moderate behaviors and attitudes; take easy actions such as recycling Modest Greens (20 percent) Less concerned about environmental issues and problems, lower green behavior; less likely to believe that industry needs to improve the environment Non- Greens (10 percent) Cynical and apprehensive about environmentalism; think environmental movement is a front for political interest groups

The segmentation of the market allows for both policy and marketing initiatives geared directly for the propensity category. The following (Figure 2) is an excerpt of the marketing outcomes from the EPF study:

Segment Policy Initiatives Marketing Initiatives True Greens (high environmental values, high environmental self- efficacy) Because True Greens are likely Because True Greens view than Modest to be opinion leaders, design themselves as opinion leaders, Greens and Non-Greens policies to reward True Greens design marketing efforts to Less price sensitive for driving hybrid vehicles and encourage them to share their make their efforts visible to opinions about the environment than Low Potency Greens, Modest others. For example, allow hybrid and their ability to make a Greens, Less skeptical or Non-Greens toward new products vehicles to drive in the car-pool-only difference. Outlets for True lane. Greens to express their opinions problem solving can include blogs and other types Most willing to engage in complex Also, take advantage of opinion of viral communications. leadership and willingness to Moderate Greens, Modest Greens, or engage in complex problem Marketers can also take Non-Gree Higher inns opinion leadership than solving by including True Greens in policy development. willingness to engage in complex communications than Low Potency problemadvantage solving of True and Greens technological Greens, Less skeptical but more toward skeptical marketing toward savviness by including True Greens marketing communications than Non- in coproduction of products. Greens -monitoring than Modest Greens or Non-Greens Higher in self savviness than Modest Greens or Non- Greens Higher levels of technological toward Hybrid Cars Highest behavioral intentions Figure2: The full results is available in Appendix EPF Description of Segments and Recommendations

The results of this study are interesting and some important marketing tips can be gleaned from it but this study cannot be directly applied because hybrid owners and potential owners are at this time a different market than potential Electric Vehicle consumers. Hybrid owners are risk-adverse buyers who are not ready to dive straight into the technology. This risk aversion may be based on either a tendency to wait for the early majority to begin adoption of the technology or it may be that hybrids are the early replacement for EVs until socially we catch up to where we really are environmentally as we are in global denial of our environmental predicament and technologically.

According to this framework, the greater the recycling participation the easier to market green products such as hybrid or Electric Vehicles. This cannot be directly applied to Prince Edward Island residents, as the driving reasons behind the high recycling participation rates do not appear to be environmentally driven. Social pressures to conform are quite strong and participation in recycling is visible within the community; green products are still fighting for mass consumption in PEI. Even the small rise in the use of green products has not directly correlated with the rise in interest and demand for Electric Vehicles

The marketing strategies compiled and categorized by the environmental propensity framework are too simple, yet they provide a reasonable marketing strategy component using secondary data of Prince Edward Island recycling participation rates. This study is also difficult to apply when the consumers of PEI have not been sampled and segmented; this would be for future research.

Consumer Purchase Decision Process A consumer passes through a series of stages as the purchase decision process proceeds.

1. problem recognition 2. information search 3. alternative evaluation 4. purchase decision 5. post-purchase behavior

80% of people choose a different vehicle than they had planned when entering the dealership according to Tim Carroll previous Minister of Agriculture and current professor at UPEI.

It is the perceived need that brings the consumer to the point of searching out alternatives, this is the problem recognition. Consumers will conduct an information search internally and externally to make the choice of best value. When purchasing a vehicle the risk of making a wrong choice is high and external information takes on a large influence. Primary external sources include friends, family, consumer reports, advertising, company websites and sales people. A vehicle purchase typically except for the salesperson and situational influences before the visit. It is therefore the salesperson and situational influences that often have the highest influences on the purchase as the last pieces of information received. Situational influences include the reason for the purchase, others present during the purchase, physical

During the alternative evaluation stage value of the alternatives is assessed. Criteria often include appearance and feel, meeting of predetermined characteristics, and brand association. The final decision is based on terms of sale, any relevant past experience with seller, return or repair warranties, store atmosphere, time pressure, and the perception of a sale price.

As consumer involvement is typically high for a vehicle purchase it implies that many brands will be examined, many sellers will be considered, many vehicle attributes will be evaluated, many external information sources will be used, and a considerable amount of time will be spent searching.

Pav o influence the purchase decision in that if the physiological needs of the consumers are met then the higher order needs are considered. Safety comes before status and personal fulfillment. This is often overlooked in North America and westernized nations because safety regulations protect us.

Sociocultural influences also contribute to the underlying behaviours of consumers. Opinion leaders often exert a personal type of this influence. Internet resources also contribute to the personal sociocultural influence. Family influence also is under the category of sociocultural influences.6

Innovation for the sake of technology advancement is not likely to succeed. Innovation in intended to solve the needs of an underserved market. Lee (2009) sets to point out in his proposal for wider adoption of Electric Vehicles in Hong Kong that pure technological advancement is not enough for innovation with a significant impact to the society. Good technology has to be commercialized and transformed into useful, useable, and desirable products or services, and formulated into a viable business models, or else it could never be widely adopted by the public7.

The expectations of the market are well beyond the performance of Electric Vehicles according to Wansart (2010). Given their high costs, small range and missing recharging infrastructure, electric vehicles do not seem to be competitive enough compared to conventional powertrains to gain

6 San Diego State University Rohan Academic Computing Marketing 370: Marketing Principles, lecture: Organizational Markets and Buyer Behaviour Chapter 5 Marketing 7th Edition, by Kerin, Berkowitz, Hartley, Rudelius, McGraw Hill. http://www-rohan.sdsu.edu/~renglish/370/notes/chapt05/

7 Lee, Tak-Chi. Promoting the wider use of electrical vehicles in Hong Kong: A strategic proposal. Power Electronics Systems and Applications, 2009. PESA 2009. 3rd International Conference. 20-22 May 2009 pp 1-8. Hong Kong significant market share8. Without market share Electric Vehicles will die a slow death of financial constriction.

Consumer Purchase Modeling Marketing a product is more than just throwing a product out into the marketplace and advertising. It involves understanding the consumer and then applying potential business models that fit the product as well as the marketplace. If we were to take a look at the Electric Vehicle marketplace we could see that a portion of almost any model is relevant. The Multisided Platform model would assist with describing how to connect the economically minded or environmental buyers with the Electric Vehicle manufacturers and best designing the car dealership setup for Electric Vehicle showcasing. The Long Tail model approaches Electric Vehicle sales with the mindset of selling to a niche market and using the smaller demand as a specialty item pricing situation to make it successful. The Freemium model would use either the Bait-&-Hook using a limited free trial or lengthy test drives to inform the public first hand on the benefits of Electric Vehicles or use the battery rental as a method of greatly reducing the prohibitive initial cost of the Electric Vehicle. The Unbundling of the Business Model approach presents a new sales model for Electric Vehicles where the manufacturing of the vehicles is a separate financial entity from both the scientific research creating breakthroughs in battery technologies and propulsion systems, as well as the dealerships or distribution systems. The Open Innovation model breaks free from all established vehicle manufacturing, sales and purchasing patterns and places the power of creativity and experimentation in the hands of freelancers and homegrown geniuses that design and test vehicles in their own garages using their own funds for the trial and error sequences to create new ideas and solutions.

Application of any of the traditional marketing business models is possible and each one has been tried on a small scale, but it is on a larger scale that success could be spelled out. A good business plan for Electric Vehicles has not been developed or publicised and requires localized research and input. It will have well defined expectations, a solid operations plan and room for a circular reassessment and action subroutine during execution.

A serious deficiency in Electric Vehicle design and marketing involves the low risk/continuity approach and the need for the large automakers to maintain their current practices and sales approaches with a drastically different product. During this approach the Electric Vehicle is trapped in an imitation branding with differing features and needs that appear inferior in this light and risk labelling this technology as high risk and undesirable shunning buyers while convincing them to leave the technology behind directly after the high risk research and design phase.

Electric Vehicle advertising has made the three classic marketing errors outright: making unsubstantiated claims of battery life without specifying the environmental limitations, citing irrelevant differentiators like the environmental benefits when buyers have clearly shown not to use this as a ICE Electric Vehicles.

8 Wansart, J. Modeling market development of electric vehicles. Systems Conference, 2010 4th Annual IEEE. 5-8 April 2010 pp 371-376. SanDiego, CA. Automotive Industry The automotive industry is completely controlled by the suppliers, if a vehicle is not manufactured the public does not have access to it. Suppliers also enjoy a relatively closed market, with few competitors. Resource investment required to maintain position is limited once successful. Brand and reputation capture the risk adverse and tantalize the risky with options. The risk-adverse have the ability to obtain warranties and have the security that the manufacturer has long-term investment in the market. The risky can purchase vehicles that are much faster than necessary to the point of being dangerous, outlandish shapes, bright colours and robust to match their desired lifestyle. The automotive manufacturing giants of today have a wide geographical coverage and advertising in every venue with the most information online; making a purchase a thing of ease. The automobile industry participants have discovered the perfect balance of quality and maintenance to ensure profitability. There are both barriers to entry and exit of the existing combustion engine vehicle industry. The existing automaker dominance makes new entrants too small to penetrate the market. A resistance to change technologies by both consumers and manufacturers can be attributed to the hassle of learning new technologies, the added expense to adopt and the perception of expense to government and taxes for infrastructure. New entrant strategies include strategies such as one-of futuristic styling and non-traditional packaging to peak interest and present as aberrant. Buyers show power in the industry with resistance to change and price comparing to obtain more reasonable pricing. Limited volumes build uneasiness and give the perception of scarcity. There are alternatives to cars and trucks, but none dominate the industry like the car. Alternatives usually involve some kind of sacrifice: time, convenience or ease of access to certain locations. Vehicle alternatives have an unknown level of quality and maintenance access. A more detailed analysis of the Electric Vehicle automobile industry is available in Appendix: Porter 5 Forces.

The Electric Vehicle specifically appears to be controlled by supplier power, where the technology is not developed and vehicles are then therefore not available. Geographical coverage is beginning to emerge with hesitant government safety and infrastructure groups. The possibility for new entrants into the Electric Vehicle industry could be difficult, but possible. Tesla has emerged as an emerging EV supplier with worldwide access. Competition in the Electric Vehicle automotive industry is building; the growth potential appears high. Geography does affect the performance of the vehicle, where the batteries have a degraded life-per-charge in extreme weather. Canadian winters can be cold and government testing is underway to assess limitations or adjustments that can be made to resolve climate related limitations. Buyers show power through a resistance to change technologies and the aversion to change the distribution of cost. The added upfront cost of a home plug-in station, battery replacement, and the initial purchase premium are all concerning to the buyer. The alternatives when considering an Electric Vehicle are wider. The consumer is likely to consider already available alternatives such as public transportation, active living, fuel cell, biofuels, propane/natural gas, hybrid and the traditional combustion engine automobile. The quality and availability of infrastructure is unknown and insecure. Regulatory bodies also have power in the industry; the ability to allow vehicles on the roads, safety standards, infrastructure requirements and the ease of access to vehicles.

Sample statistics were used for the localized study. The distribution of respondents was not as evenly disbursed as the population. The majority of respondents were from the Charlottetown area (Figure 3); which was the location of the paper survey distribution.

PEI Respondent Geographical Distribution York Summerside Hunter River Belfast Vernon Bridge Cornwall Montague Mount Stewart Breadalbane

Stratford Out of Province or Kensington Error O'Leary Crapaud Morell Bonshaw Richmond Cardigan North Wiltshire St.Peters Bay Souris Kinkora Alberton Other North Rustico Bedeque Murray Murray River Harbour Tyne Valley Borden-Carleton Elmsdale Miscouche Pownal Tignish

Charlottetown

Figure 3: Survey Results 2012 Postal code distribution of respondents, N=712

A bias for environmentally conscious persons may have been obtained during this collection. The majority of the paper surveys were distributed at the Charlottetown Farmers Market over the course of four weeks (Wednesdays and Saturdays) no more than one hundred were passed out and collected on any given day.

The data capture process for the paper survey results was a heads up process with manual data review at the time of data entry. The online batch review of data was combined with some data adjustment. The heads up mode for the paper surveys corrected some possible errors i.e. when asked for postal code or community some respondents wrote are rather than city. The postal code question was not clear enough to eliminate this potential interpretation and response. For automated data processing postal codes to regions and cities assumes that all postal codes are recorded and published by Canada Post which is not the case. No item level validations for the type of data were programmed into the online survey capture to avoid respondent frustrations if they desired to enter in any numerical data into the free-flow text locations. The item level validations were done manually upon review of the data.

Data collected did not require statistical nor macro edits. The survey did not request data that would have to be checked for feasible limits. SPSS was used to analyze and summarize the text into relevant and comprehensive categories.

Inferential analysis was used to extrapolate for the PEI population opinions, attitudes and interests. The selection of questions was condensed and many topics had to obtain coverage through secondary data and external studies that could be applied given some limitations in applicability. The questions chosen were to assist with market analysis.

Marketing

Forces that affect Market Growth It is both the consumer and product that influence market growth. T need for the product, the amount of economic, social or performance risk, the need for approval from others to buy, the ability to easily observe the product in use, and the ability to easily try out the product before purchase. The choice of product depends on a meaningful advantage, if it is affordable, if it is easily installed, used and serviced, the performance risk, and the availability in the marketplace. These factors are not easily assumed for a new market product such as the Electric Vehicle. The public questionnaire included these factors to gauge public perception. PEI residents communicated (Figure 4) that Electric Vehicles are not a focus of the present government, that residents do not have enough information about EVs, that EVs do not pose a low risk for consumers and that high profile racing would not assist in the proving of this technology to consumers. PEI Residents Agreement with Idealistic EV Circumstances

EVs POSE A LOW RISK LEVEL I believe there is a low risk level (financial, social, and 27 performance risk) when buying an Electric Vehicle. Strongly Agree

EV RACING WOULD HELP EV ACCEPTANCE 267 I believe Electric Vehicle technology would be better accepted if it were proven in the racing community (such Agree as the Formula 1 series).

EV RESEARCH AND PRODUCTION IS A FOCUS FOR 320 GOVERNMENT Disagree I believe the Canadian Government is interested in supporting Electric Vehicle research and prod

36 I HAVE ENOUGH INFORMATION ABOUT EVs Strongly Disagree I believe I have enough information about existing Electric Vehicles to make an educated choice to purchase or not to purchase one.

0 100 200 300 400 500 Count of Respondents Figure 4: Survey summary results indicating agreement with statements made; N=706.

In all cases there are a mix of agreement and disagreement, despite a 99.2% participation rate in this portion of the questionnaire. This indicates that the perception of risk is mixed and the populous needs information to obtain a more concrete decision. It also indicates that Electric Vehicle racing and media coverage of these events could be a swaying factor for much of the population. Residents are also communicating that that the government is not communicating enough with the public regarding its funding and progress of Electric Vehicle programs. All of these results including the most prominent of bar in the graph overwhelmingly indicates that the public is under informed and recognizes the need for it.

EV Market Discussion Electric Vehicles are in the transportation business. This does not eliminate recreational vehicles or public transportation from the market, as many might assume EVs are personal vehicles. We must go beyond the articulated needs of the served customers. To assess the broad market vision it is essential to visualize the untapped potential of EVs, it lies in the underserved needs of the environmentally conscious sports enthusiast, the daily public transit commuter, the city dweller desiring personal transport, the established range commuter, and even the occasional taxi-calling individual. The focus of this study specifically is the semirural to rural drivers of Prince Edward Island who are often overlooked in the scheme of vehicle development and environmentalism.

The underserved markets change with time, and could change as a result of unusually large price declines, radical new technology, changes in customer behaviour, economic conditions and unpredictable circumstances. The factors limiting full market development involve the untapped consumers (Figure 5) in the bar portion of the graph. Full Market Sales Distribution Current Market Demand

Future Demand

Not Aware

Not Available

Lacks Benefits

Unable To Use

Not Affordable

Figure 5: Distribution of Sales Market, both current and future

The current vehicle demand dominates the majority of the market, yet there is still room for vehicle consumption amongst the underserved. The ability to afford personal transportation remains a significant factor.

Market Growth Market growth and market potential are dependent on both Market Development and Market Share. The market potential is defined by the market segments (personal transportation, recreational vehicles, public transit and service vehicles). The market potential is sensitive to large price declines, radical new technologies, changes in customer behaviours, economic conditions or other unpredictable circumstances. Estimates can be made using a specific geographical boundary, known consuming units such as households, and considering the number of economically capable units.

The Market Development Index requires the diffusion rate and subsequent marketing calculations including market potential. However, the invalidated estimate for the new green energy adoption/diffusion rate was helpful in obtaining a rough picture of market potential. The survey provided estimates (without validated statistical significance) for the Market Development Path and Market Share Index (MSI). Using the MSI and comparable maximum potential responses the Performance Gap is available as well as making it possible, in combination with the MDI, to categorize Electric Vehicles as having very high growth potential, growth with market development, share growth opportunity, or limited growth. The Appendix Market Analysis calculates the market development and market share to estimate EV market growth. The EV market growth is currently ideal as observed in Figure 6. A Very High Growth Potential is indicated and with recent changes in infrastructure and media attention the Potential Market may become actual market share and translate into EV sales.

California mandates through California Air Resource Board (CARB) rushed technology development of EVs to production, before automobile manufacturers felt the consumer demand. Once local government legislation was eased, the majority of the manufacturers reversed all progress and crushed the cars. There are many reasons given for this reversal and destruction, none of which seem to The outcome was that government regulators bent when pressured.

US Federal government support was negative. Competing technologies vied for government backing and the monetarily influential oil and gas companies were believed to be influential with many aspects of government action including Middle Eastern military turmoil, the direction toward unproven fuel cell technologies and the lack of EV development support.

Canadian governments had similar influences and provided minimal assistance to EV technology development and production. Biofuels were popularized as the next stage of environmental initiatives and were incentivized for vehicular conversions. British Columbian manufacturers were marginalized through regulation into obscure vehicular classifications (LSV) and eventually those classifications were labelled not road worthy.

Presently: No longer is it a question of whether electric vehicles are going to be manufactured, it is whether they will succeed. Numerous automotive companies, small and giant, have developed Electric Vehicles of varying range and speed capabilities9. It is now of concern to international groups whether the infrastructure that will be demanded by the public is needed soon or not and how to manage best practices to minimize costly mistakes.

A number of international groups have formed to discuss, coordinate and drive the Electric Vehicle revol T I E A IEA ‘ M I C E M Electric Vehicles Initiative (EVI) and C40 Cities are a few of the groups which have recently been active in advancing the cause.

Clean Energy Ministerial was formed as a result of the December 2009 United Nations Framework Convention on Climate Change in Copenhagen. The first international meeting (CEM1) convened in Washington, DC July 2010 and since have had 2 additional ministerial meetings abroad, the next booked for 2013 in New Delhi, India. The 23 governments participating in CEM initiatives account for 80 percent of global greenhouse gas emissions and 90 percent of global clean energy investment10 (Figure 7). Canada is not a direct contributor to the EVI initiative, but as of June 2012 is leading Clean Energy Appliances, Smart Grid, Buildings and Industry, and Carbon Capture.

9 US Sales: Tesla, Renault, Myers Motors (formerly Corbin Motors), Coda, Wheego Electric Cars, Th!nk, Peugeot, Lumeneo, Chery Automobile Co., Phoenix Motorcars Inc. (pickup truck), Tomberlin (LSV), Miles Electric Vehicles (LSV), Renault (ICE and hybrid sales as well), BMW (ICE and hybrid sales as well), Nissan, Mitsubishi, Toyota, Ford, Daimler AG 10 Clean Energy Ministerial Our Work. http://www.cleanenergyministerial.org/our_work/participation.html

Figure 7: pdf image of grid of participating countries responsibilities as outlined in the Clean Energy Ministerial

It is China, Denmark, Finland, France, Germany, India, Japan, South Africa, Spain, Sweden, United Kingdom, and the United States that are directly participating in EVI. The goal of the EVI is to support the introduction of 20 million electric vehicles on international roads by 2020.

The Clean Energy Ministerial has projections for vehicle sales in the Clean Energy Report: IEA input to the CEM Update June 2011 (Figure 8).

Figure 8: Passenger LDV sales by technology type and scenario (million sales per year) The report poignantly conveys that it is present actions that will lead the way to the future success of EV T EV PHEV ld vehicle fleet by 2020, it is essential to reach order to achieve substantial EV penetration later... An early indicator for EVs and PHEVs is the availability of vehicles. The numbers and types of models available to consumers to purchase must be large enough to attract a wide range of buyers, and thus enabl (International Energy Agency, June 2011). These International Energy Agency (IEA) targets demand short term action as well as enable governments to develop and implement EV programs.

A discouraging thin line in Figure 9 indicates that the opinion of international energy experts is that Canada is not a significant participant in the clean transportation future.

Figure 9: Aggregated national targets for EV/PHEVs

The IEA also indicates that the per-vehicle purchase incentives are key to early success.

The EV City Casebook is a compilation of illustrative case studies by international sources which details Electric Vehicle best practices from 16 cities in 9 countries. A World EV Cities and Ecosystems web portal has been launched and is intended to be an international resource for up-to-date deployment progress and facilitate cooperation, inspiration and sharing of practical experiences between cities and regions around the world that are encouraging clean, low carbon forms of transport11.

Canada is neither a major player nor recognized visible participant of the EV international community.

There are many interest groups and associations around the world that are passionate about Electric Vehicles; one of the more prominent North American contributors is the Electric Auto Association (EAA). The EAA is a non-profit educational organization that promotes the advancement and widespread adoption of Electric Vehicles. The EAA acts as a public source of information to communicate developments in electric vehicle technology, to encourage experimentation in the building of electric

11 WECE 2012. http://www.worldevcities.org/ vehicles, and to organize public exhibits and events of electric vehicles, and to educate the public on the progress and benefits of electric vehicle technology.

Canadian Market Overview

Political Environment and Government Conducting a literature analysis of both federal and provincial documents to reveal and analyze political intentions and actions was both disappointing and encouraging. In the search for motives and trends it became apparent that many projects have begun with good direction and funding, yet very few have concluded with results and follow-up publications or action. Canada has spent what appears to be billions of dollars into EV testing and battery research; while most that is tested is already proven and the likelihood of having first mover advantage is slim. The motives of government agendas become mystifying. This brings in to question the Canadian government effectiveness or actual intentions.

The Clean Air Agenda is an initiative under the umbrella of Environment Canada which was intended to extend from 2008 - T initiatives, programming also focussed on changing the behaviour or consumers and industry by tackling two key barriers to reducing pollution from transportation, that is, the lack of information, knowledge and engagement of consumers and industry, and, the costs and risks associated with technology uptake 12according to Paula Brand Executive Director of Environment Canada. The following questions were posed to the Executive Director of Environment Canada:

1. How has this initiative been met? 2. Has this initiative been extended or are more plans underway? If there are, what are they? 3. Given the findings from my own research, (which used a public questionnaire to ask about knowledge of electric vehicles and the environmental impact differences between electric vehicles and the combustion engine) where the public indicated that they felt under-informed and have mixed feelings about whether the government is interested in supporting electric vehicle research and production, is Environment Canada supporting and encouraging the use of electric vehicles as a direct avenue for fulfilling many of the Clean Air Agenda directives as set out in the quote above?

Technical Head for Transport Canada Norman Meyer responded in a telephone interview from Ottawa. ecoTransportation for Vehicles (eTV) is a division under the ecoAction and ecoEnergy subcategories of the Clean Air Agenda as seen in the treasury departments funding diagram in Appendix: Clean Air Agenda Program Hierarchy. Norman communicated that the initiative was funded and that many programs did not report significant findings worthy of publication while others had such great progress or notable results that they have been granted funding and a renewal of the program. The eTV program was one of the programs that has been granted funding for an additional 3.5 years and is likely to be renewed in 2015 for an additional 5 years.

12 www.tbs-sct.gc.ca/hidb-bdih/initiative-eng.aspx?H;=12 The eTV program is not a program that is finding new technologies and discovering applications. It is rather a department of safety regulations and standards. The Ministry of Transportation has been enabled under the eTV program to test new vehicles on the international market before they are approved for Canadian distribution. Vehicle driving and safety testing is conducted locally to determine any safety adjustments necessary or if the product is not capable of use in the Canadian climate. Many of the published and available reports noted above are from this department. The original eTV program renamed eTV1 had a public outreach component. This component was eliminated for eTV2, after being awarded the extension to the program, to conserve funding for additional testing and the writing of standards.

The public outreach component of government programs is worth the funding despite the view from inside the departments where it might appear wasteful. It is the opinion of the public that drives funding and continued interest in technology progression. Without public exposure government spending is questioned and appears careless. Transport Canada maintains that there is limited public exposure that is post report at national auto shows and occasionally at other relevant venues which is not as financially taxing as media campaigns.

On May 28, 2012 the Minister of Transport Honourable Denis Lebel announced in summary that testing of Electric Vehicles would be the next major step for their department with an anticipated spending of $38 million in 5 years. Yet the testing of various early models of electric vehicles were tested as part of the 2005 Action Plan for Electric Mobility in Canada (EMC) by Transport Development Centre under the EV Development Program. The interview with Norman Meyer clarified this misunderstanding. The testing that had already occurred was useful and the learning from the previous results has been carried forward to the testing of currently available models. The lack of availability of Electric Vehicles on the Canadian market can be attributed to the rigorous testing that Canadian agencies such as Transport Canada does before allowing sales in this safety conscious and trusting market.

The Office of Energy Efficiency (OEE) as a department of Natural Resources Canada also has what appears at first glance to be a token publication named ecoENERGY Efficiency for Vehicles. This public website offers fuel efficient driver training and tools in actuality these are a list of tips and a non- functioning link to a webpage of recommendations for purchasing fuel-efficient vehicles. The dated website publication of this department leads the searching public to believe that the wave of government funding and involvement has ended.

Government funded and controlled Electric Vehicle tests conducted in selected locations across Canada were completed, published and available to the public for a short period of time (without announcing neither the conclusion of the projects nor the availability of the results). All that remains of the published reports are short online summaries of the studies with little useful or revealing information. The departments that were created for the studies appeared to have been disbanded and the members assigned new roles. The assumption that we are left with is that the focus has changed and that the initiative that brought about the studies has been met to some degree, that is unknown to the public, or the initiative has been abandoned. The government is not publicizing the work they are currently doing. T C under informs the Canadian market in the dark about what is being done with monies attributed to programs. It is the responsibility of those given funding to publish what money is spent on and issue public statements regularly updating the anticipatory masses. The statements made should outline what has been accomplished if additional funds are being allocated to avoid the perception of double billing.

The Electric Vehicle Technology Road Map (evTRM) is an industry led, federal government coordinated document, focused on the development and adoption of EVs in Canada, while building a robust industry.

The Roadmap provides the perspective of numerous stakeholders, mainly industry, as to how EVs for highway use should evolve in Canada in the future and what should be done to secure this evolution.

The Roadmap covers a wide range of topics related to the vision of 500 000 or more EVs in Canada by 2018. The topics include energy storage, components for EVs, vehicle integration, business models and opportunities for EVs, government policies, regulatory and human resource issues, as well public awareness and education.

In summary, the roadmap highlights the need for investment into Canadian manufacturing of EVs and EV battery storage technology (almost exclusively through CanmetENERGY), the consideration for supplementing local government EV initiatives and infrastructure, and the assignment of an implementation committee from the steering committee members. The Roadmap was a planning tool not an action plan.

Demonstrating Electric Vehicles in Canada projects began to wrap up in 2008 and most personnel were reallocated to other projects unrelated to the evTRM. Whether the projects were completed or the government has finished its financial investment is unknown. Many of the online reports for the projects started remain incomplete as of Aug 2011. The Demonstrating Electric Vehicles in Canada report was published in March 2010 and concludes that the individual projects have differing methods for capturing data and therefore cannot combine to put forth any conclusive findings, that significant infrastructure investment would be required for a full introduction of EVs, and that expensive batteries and inexpensive oil prices make the electric vehicle market penetration low. The project report also suggests guidelines for future projects to allow for proper comparisons of data. Individual project reports, if still available, stress that electric vehicles are capable and that tested users enjoyed the EVs with few minor suggestions for manufacturers.

Non Government Associations There are numerous passionate interest groups13 keeping the searching public informed. The majority of the information that is communicated involves conversations regarding battery technologies, public event announcements, infrastructure tidbits, regulatory changes involving EVs, EV purchase incentives and education regarding the introduction of Electric Vehicle models on the international market. Very little information is available regarding actual vehicles available for consumers in Canada. The lack of

13 Electric Vehicle Society of Canada, Ev Canada (out of date since 2010), Green Fleets for business, Manitoba Electric Vehicle Association, Vancouver Electric Vehicles Association (Canadian Chapter of EAA), Electric Vehicle Council of Ottawa, Durham Electric Vehicles Association, and Toronto Hybrid Group. government communication is evident in the scarcity of Canadian content on websites of interest groups.

There are also a limited number of companies14 doing electric vehicle conversion and strictly electric vehicle sales1516. The automotive giants17 are also beginning to make Electric Vehicles and hybrids available in Canada.

Provincially: Non Maritime Provinces appear to be leading the Canadian support infrastructure when reviewing the Electric Vehicle Technology Roadmap for Canada. It is the central provinces of Quebec, Ontario, and Manitoba as well as the coastal province of British Columbia that have noted initiatives with special mention of the Green Highway in BC. Yet a small company is beginning to make waves across the nation: Sun Country Highway. This company is founded in Saskatoon, Saskatchewan and has been installing universal public charging stations in every province as it makes its year long trek across Canada. Prince Edward Island is one of the provinces already marked by 10 charging stations from North Cape to the East Point. This was intended to be a media sensation and may yet become a quiet revolution in PEI that might pacify public EV range anxiety. The introduction of the charging stations was not anticipated by PEI residents and after the short media attention has slipped from the public eye. There may be residual effects that slowly convince the PEI market of Electric Vehicle practicality.

Incentives - Hybrid and Electric Vehicle Incentives: A Canadian Overview

Canadian provincial government support has been low yet there are minor incentives in Ontario and Quebec (see Appendix Canadian Electric & Hybrid Vehicles Incentives). The rebates cannot be applied to plug-in electric drive conversions which directly hinders Electric Vehicle production outside of the automotive giants.

Ontario established a limited rebate between $5,000 -$8,500, varying by battery size, for the first 10,000 qualified purchasers or leasers of a new plug-in electric vehicle after July 1, 2010 (maximum provincial contribution $85 Million). Also to support infrastructure development, recharging stations have been installed at a few select GO Transit and other provincially-owned parking lots.18

Quebec plans to offer rebates of up to $8,500 beginning on January 1, 2012. The rebates can be applied to the purchase of a new plug-in electric vehicle or new hybrid electric vehicle. All-electric vehicles with high-capacity battery packs are to be eligible for the full $8,000 rebate, while reduced for low-range electric cars and plug-in hybrids. Quebec's provincial government allocated $50 million for the program

14 Canadian Electric Vehicles Ltd, Electric AutoSports Inc., REV Consultants, Cycle Electric, D&V Electronics Ltd., E- Cycle Electric Vehicles 15 Canadian Sales: Motrec International Inc. (industrial vehicles) 16 US Sales: Tesla, Renault, Myers Motors (formerly Corbin Motors), Coda, Wheego Electric Cars, Th!nk, Peugeot, Lumeneo, Chery Automobile Co., Phoenix Motorcars Inc. (pickup truck), Tomberlin (LSV), Miles Electric Vehicles (LSV), Renault (ICE and hybrid sales as well), BMW (ICE and hybrid sales as well) 17 Nissan, Mitsubishi, Toyota, Ford, Daimler AG 18 "Which cars are eligible for Ontario's Electric Vehicle Incentive Program?". Ontario Ministry of Transportation. 2011-09-21. http://www.mto.gov.on.ca/english/dandv/vehicle/electric/ev-faq.shtml#incentive.) until the fund runs out or the maximum number of eligible vehicles 10,000 for all-electric vehicles and plug-in hybrids, and 5,000 for conventional hybrids are approved for rebates.

British Columbia is also participating heavily, V bylaw that will require developers of new condos and multi-unit residential complexes to ensure that a fifth of on-site parking spaces have 240-volt electric-vehicle charging stations. The council also supported a pilot project for public charging sites. N Y T J N Incentives for Electric Cars in Canada By John Lorinc). The infrastructure investment is positive indicating a dedication to EVs. However, there is a shortage of individualized incentives for the buyers, which may negligible if the population is dominated by environmentalists.

Prince Edward Island E V An incentive introduced for hybrid vehicles includes a tax rebate for up to $3000 on the purchase or lease of a HEV an additional $2000 rebate is offered to taxi drivers. The incentives allocated by the provincial government do not include any construction regulations or future planning.

Financial rebates for buyers are minimal and the government investment is miniscule when compared to other spending allocations by the federal government. Financing these incentives indicates government interest in supporting the technology. Vehicle incentives should not be removed until the technology has been determined to have become mainstream where the funding has been consumed in the incentive program or the technology has become outdated and the incentives would be better applied to new transportation technologies.

The political environment is both an opportunity and a threat. The publications of government when sought out make EVs look like they are being supported whole heartedly, yet the programs and committees formed by government lag actual production of the vehicles. The Canadian government was still funding technology proving projects for EVs after they had been manufactured, driven and destroyed by automobile giants.

Characterizing Prince Edward Island Despite its dense population PEI maintains a rural way of life. P E I C province, has a population density of almost 25,000 peop C most densely populated land.

Population of Canada and Canadian Provinces and Territories Location Population Canada 34,018,957 Newfoundland & Labrador 510,900 Prince Edward Island 141,600 Nova Scotia 940,500 New Brunswick 751,300 Quebec 7,886,100 Ontario 13,167,900 Manitoba 1,232,700 Saskatchewan 1,041,700 Alberta 3,724,800 British Columbia 4,510,900 Yukon 34,246 North West Territories 43,700 Nunavut 32,400 Figure8: Statistics Canada, 2010 preliminary postcensal estimates.

The distribution of respondents was not as representative of the population distribution as desired but did focus on the largest city in the province, Charlottetown. For a graph detailing the distribution of survey respondents please see Appendix: Survey Results

PEI Environmental Propensity & Social Norms In many ways Prince Edward Island would be considered very ahead of its time for the approach toward environmental concerns. PEI was one of the first places nationally to test and incorporate wind turbines as a significant portion of electricity supply. PEI was considered one of the first provinces to enact and have a very high participation rate in recycling and composting. PEI had glass bottles and had somehow been able to withstand the worldwide craze for environmentally damaging plastic bottles. Sadly the appearance of convenience, the allure of a small price difference and eventual public demand brought in the plastics and reduced recycling ability and the rise of waste. If the rate of participation of recycling could be considered a significant indicator for environmental propensity, Prince Edward Island would be at the top of the list for ideal locations for Electric Vehicles.

Environmentally PEI C Prince Edward Island led the pack in terms of access and utilization, with 99% of households reporting having access to, and making use of, a recycling program. This high degree of public buy-in for waste diversion could be attributed to a vigorous public education program and the institution of mandatory re (Canada, Households that had access to, and used, recycling programs, by material and by province, 2006). The participation in recycling does not necessarily indicate environmentalism. The absence of vehicular emissions testing is a clear indicator that pollution is not a priority at this time. PEI residents have active participation in government driven environmental initiatives, although participation may be due to social pressures.

Politically The Prince Edward Island government is planning to action, but the direction may not be appropriate. In 2009 the province released a strategy for climate change Prince Edward Island and Climate Change: A Strategy for Reducing the Impacts of Global Warming which outlines the planned incentives and the environmental transportation initiatives that will be supported. The government announced its intentions to support biofuels, public transportation tax incentives, cycling and walking path expansion and tax reduction for bicycle gear. A statement issued in the above noted report seems encouraging until analyzed closely to reveal that the government is not convinced of the benefits or the imminent future of hybrids and Electric Vehicles.

The Government of Prince Edward Island, in cooperation with other provinces, will adopt a greenhouse gas emission standard for new light duty vehicles after 2010. The new standards will cut emissions in Prince Edward Island by 53,000 tonnes CO2 e a year by 2017 - the equivalent of taking 10,000 cars off the road. Since 2004, the Government of Prince Edward Island has encouraged Islanders to purchase more fuel-efficient vehicles through a provincial tax incentive (up to $3,000) towards the purchase or lease of a hybrid-electric vehicle. In 2007, over 60 Islanders benefitted from this initiative. A number of hybrid vehicles have entered the marketplace in recent years having only minimal improvements to fuel efficiency (so-called mild hybrids). Some conventional motor vehicles have incorporated technologies that increase their fuel efficiency to rival that of hybrid vehicles. The Government of Prince Edward Island will expand the hybrid tax incentive to all vehicles meeting minimum fuel economy standards. An additional $2,000 tax incentive will be offered to taxi drivers purchasing hybrid vehicles.(Department of Environment, 2009)

T The expansion of the incentive to any fuel efficient vehicles is backward thinking. The vision for the future of PEI needs to lineup with the vision of both Canada and international environmentally concerned agencies. The EV the provincial government reported the intended direction for these (Department of Environment, 2009).

Politics in Prince Edward Island is big business. As a dominant employer in the province, government positioning has great weight in the decisions made by the public. The political party in power and that has been in power for decades is Liberal. Conservative attitudes keep the party in power, in power. Given this type of influence, the government can quickly affect the direction of technology diffusion.

Socially The social structure of Prince Edward Island is complex and not well researched. When asked, Islanders are very forthcoming about opinions about social attitudes. Coming to, and Settling on, Prince Edward Island: Stories and Voices (Baldacchino G. , 2006a) an Island Studies Research project contributes to the understanding of social attitudes from the perspective of both Islanders and newer residents come- from-aways (CFAs). The report communicates amongst many positive attributes a few relevant the alleged close-mindedness of islan perceived social conservatism, exclusivity and clannishness of the host society T - putting attitudes are important to highlight when considering introducing a new and seemingly foreign technology. When asked if PEI was ready for Electric Vehicle technology a number of responses were indicated (Figure 9). The responses were categorized and a few social attitudes were prevalent.

PEI Readiness Responses (free-flow text) Islanders resist change 200 PEI is not ready 150 Cost is prohibitive 100 50 Technology is not 0 Unsure ready

PEI needs PEI is ready Infrastructure PEI needs Information

Figure 9: PEI respondents free-flow text responses categorized using SPSS; N=482

Prince Edward Island residents are self- sfied with ignorance. The answer, I posit, is a kind of kindling phenomenon, whereby the desire to conform to peers has transformed many attitudes from misconception into community viewpoint. Though few would likely admit it, this desire to conform can be so strong that the stated justification for many attitudes Islanders resist change, green technologies are expensive and if no one told me then I am not responsible to know is often subordinate to a preconceived and underlying determination to carry on with present actions, which can signify Such a state of affairs, where the stated reason for not adopting new technologies is divorced from the actual motivation, has turned green practices into a spectator sport where no one wants to make the first move. The solid homogeneity... informal communication channels and robust kin and friendship network provide a (Baldacchino G. , 2006a). T I history speaks of a strong resistance for change. The resistance can be attributed to both economic and social sources. Marketing plans will have to encompass strategies to incorporate the unique social and financial constructs of PEI.

Economically The average PEI household income in 2010, according to Stats Canada, was $63,610 which has been marginally increasing annually19 (Figure 10). Prince Edward Island, despite the seemingly reasonable median household income, is on the low side of the Canadian norm. The average does not indicate that half of the population is above this income, records indicate only 18% of the population is above an annual income of $50,000.

19 Census families include couple families, with or without children, and lone-parent families. Source: Statistics Canada, CANSIM, table 111-0009. Last modified: 2012-06-27

Average Total Income, by Family type, by Province and Percentage Distribution of Individuals Territory (All census families) (2010) by Total Earnings (2009) Taxable Returns by Percentage of Province Median total income Total Income class Returns New Brunswick $ 62,150 Wage group 2009 Newfoundland and Labrador $ 62,580 Under $5,000 14.6% Nunavut $ 62,680 $5,000-$9,999 12.4% Prince Edward Island $ 63,610 $10,000-$14,999 10.5% Nova Scotia $ 64,100 $15,000-$19,999 9.9% Quebec $ 65,900 $20,000-$24,999 7.3% Manitoba $ 66,530 $25,000-$29,999 6.9% British Columbia $ 66,970 $30,000-$34,999 6.3% Canada $ 69,860 $35,000-$39,999 6.7% Ontario $ 71,540 $40,000-$44,999 4.4% Saskatchewan $ 72,650 $45,000-$49,999 3.0% Alberta $ 85,380 $50,000-$59,999 6.8% Yukon $ 86,930 $60,000 and over 11.2% Northwest Territories $ 101,010 Figure 10: Both average income and the distribution of earnings gives an indication of financial means available for Islanders

Although the average income can be useful, the more indicative comparator is the cost of living. Figure 11 reports PEI as one of the provinces with the highest cost of living. Table 1 June 2008 May 2008 NL 115.4 114.5 PE 119.5 118.9 NS 117.8 117.1 NB 114.5 113.9 QC 114.1 113.6 ON 114.2 113.6 MB 114.4 113.5 SK 117 116.2 AB 124 122.2 BC 113.6 112.8 Whitehorse 114.6 113.6 Yellowknife 116.6 115.7 Iqaluit 110.5 109.8 Figure 11: Table 1: Consumer Price Index by Province, and for Whitehorse, Yellowknife & Iqaluit (Statistics Canada, 2002-2010) When combined with the average income the high cost of living indicates that PEI is one of the most financially challenged provinces in Canada. The following is an excerpt from a report prepared for the province by Island Studies (Baldacchino G. &., 2008):

If one asks people at large about their conception of the cost-of-living, experience suggests that most will begin to describe and detail costs which more or less correlate to the Consumer Price Index (CPI): CPI figures for June 2008 and for comparable months are provided [above] (Table 1). The CPI for PEI is currently higher than for every other province in Canada, with the exception of Alberta. Indeed, for May 2008, the consumer price index of 118.9 on Prince Edward Island is overtaken only by Alberta with an index of 122.2. As few would be surprised to note, based upon the methodology deployed in Section III, the cost of living in Alberta is actually the second lowest (to British Columbia) in Canada.

To better understand the financial perspective of Prince Edward Island residents it is helpful to know the distribution of household expenditures. Islanders have typically spent a large portion (15.9%) of their household income on transportation which is second only to housing costs (Figure 12).

AVERAGE P.E.I. HOUSEHOLD EXPENDITURES AS PERCENTAGE OF TOTAL EXPENDITURES, 2010 Insurance payments Gifts of money and and pension contributions contributions 2.4% Food 6.3% 12.0% Personal taxes Miscellaneous 14.2% expenditures 1.6% Shelter Games of chance 19.8% 0.3% Tobacco and alcoholic beverages 2.5% Education 1.4% Reading material and Household operation other printed matter 6.4% 0.3% Recreation Household furnishing 5.2% Health care and equipment 3.5% Transportation Clothing 3.0% 5.2% 15.9% Source: Statistics Canada, CANSIM: Tables 203-0001, 203-0021.

Figure 12: Household expenditures of PEI residents

This large expenditure indicates that transportation is both important in this small province as well as an expenditure of high risk. This high risk scenario indicates that a change in transportation choice could be financially precarious. Electric Vehicles are not a familiar and proven technology according to Island perspectives. Government incentives and communication could affect the attitudes of PEI residents.

Prince Edward Island Personal Vehicle Sector There were 70,375 light duty vehicles registered in PEI in 2009(Canada, Census Profile 2011 - Province PEI, 2012)and 2,771 new vehicles sold in 2011(Statistics Canada, 2012). Given the buying ceiling of 18% (refer back to Figure 10) an estimated 17,885 Electric vehicles could be purchased by those that could afford the current average price of $40,380. This translates to an approximate 110 kilotonnes CO2 reduction annually; a 6.7% reduction from current total energy related emissions on PEI20.

Trends show the larger the city the longer average daily commute. Stats Canada also found that commuters that used public transportation also had on average a longer commute than those who travelled by personal vehicle. The time differential between public transit and personal vehicle commuters increased as the size of the metropolitan city decreased (Turcotte, 2011). This would translate to a distinct likelihood for Prince Edward Island inhabitants to experience a very lengthy public transit commuting experience if public transit was used. The use of personal transportation dominates travel for Islanders and will likely continue to do so.

Prince Edward Islanders enjoy a shorter commute average commute: 6.2 km21 this shorter commute offers the possibility for a great match with a greater number of Electric Vehicles. The range of Electric Vehicles available in Canada varies widely, offering from 65km all the way to 480km per charge. This poses the issue of cost for charging the vehicles.

Cost Effectiveness of Electric Vehicles on Prince Edward Island For the few that can afford the initial investment of an EV there are definite financial rewards once on board. Using the average annual kilometers recorded per vehicle22 it is financially in favour of driving Electric, cutting monthly fueling costs to a third.

Comparing Vehicle Energy Costs 201223 Province of PEI 15288 annual kilometers/ vehicle Canadian Average 15153 annual kilometers/ vehicle Number of licensed light duty vehicles on Vehicles on PEI roads 70375 Vehicles Monthly costs: 1274 monthly kilometers/ vehicle PEI average fuel efficiency rate 9.8 Liters/ 100 kilometers PEI fuel purchase rate (October 2012) 1.30 $/ Liter $162.31 cost per month of driving using gasoline

20 1643 kilotonnes of Greenhouse Gas CO2 emissions on PEI; GHG Emission Summary for PEI, 2006 21 Statistics Canada, censuses of population, 1996 to 2006 Table 2 Median commuting distance of workers (in kilometres), Canada, provinces and territories, 1996, 2001 and 2006 22 Natural Resources Canada 2008 (pub. Sept 2010) 23 Please see Appendix Electric versus Gasoline Fuel Cost Comparison for the fully tabulated spreadsheet. sedan electric vehicle (average) 1kWh=7.3 km 174.5205 monthly kWh/ vehicle cost for electricity 0.1205 $/ kiloWatt hour service billing costs 0.15383 $/ kiloWatt hour Gst 5% $50.28 cost per month of driving using electricity

The concern for cost effectiveness comes to the forefront when the monthly kilometers driven is significantly lower for a potential buyer and the savings per month drop to a point where the added savings do not account for the added cost per month for the more expensive purchase price. The vehicle affordability calculation is very dependent on individual household expenses and the annual interest rate of the car loan. This dependency is why a sample scenario has not been included in the analysis report.

Mass Adoption Scenario

Power Generation Considerations Additional electricity supply would be required if Electric Vehicles were to become one of the major transportation sources on the Island and no changes were made to stave the energy increase. The annual electricity supply needed to power all 70,375 light duty vehicles registered in PEI is an estimated 150 GigaWatts. This approximation is a conservative estimate and with annual increases in either vehicles per household (1.4 for PEI) or the segment of the market with ease of access to EVs this estimate would likely increase to 200 - 300 GigaWatts.

On-Island power generation would either have to increase, the supply from New Brunswick would need to be renegotiated, or Smartgrid and V2Grid technologies (discussed below in Power Regulation Solutions) would have to be introduced. The increase in electricity could come from either quick and dirty sources such as coal or fossil fuels, quick and clean sources such as wind or tidal turbines or long- lag sources such as nuclear. The direction of power generation will determine the environmental impact of the Electric Vehicle movement. Producing enough power for the vehicles is not the end of what is required as energy demands increase and a significant jump in electricity supply is possible.

Power Distribution Considerations The distribution of electricity, managed by Maritime Electric here on PEI, would be significantly impacted by a large-scale Electric Vehicle adoption. The sizing of distribution cables, transformers, safety and faulting equipment, and even supply panels in homes would experience the effects. A significant and expensive overhaul of the electricity distribution system would need to be planned and rolled out distributing the costs amongst the consuming public.

Has Maritime Electric Considered the potential impact of a potential mass adoption of EVs? Maritime Electric was contacted and asked:

1. Has Maritime Electric considered the adoption of electric vehicles and their potential impact on electricity demand and distribution? 2. Other Canadian provinces (British Columbia, Manitoba, Ontario, and Quebec) are communicating electric vehicle planning through the media and publications, does Maritime Electric have a plan? Is the plan viable for the public to begin purchasing electric vehicles immediately? 3. Would Maritime Electric welcome a local sudden influx of electric vehicles? 4. Would Maritime Electric oppose a government initiative or pilot project involving numerous electric vehicles? 5. Does Maritime Electric know the number of electric vehicles and separately the number of hybrid vehicles that might be supported at this time (if this is already calculated by region), that would be of interest.

A sense of urgency is needed for utilities, such as Maritime Electric, to prepare themselves for a rapidly approaching commercialization of Electric Vehicles and plug-in hybrids. The charging infrastructure and the imminent distribution load changes will require a thorough screening of the utilities capacity. This analysis has not been started in Prince Edward Island; an interview response may update this information.

Power Regulation Solutions Electric Vehicles are an opportunity for the electricity distribution grid. In Canada, including PEI, the electrical network is reaching saturation. Record values for energy consumption are seen year after year. There are attempts, by local electricity distributors and government alike, to save energy and use less by installing energy saving appliances or minimize use. These peaks in consumption induce the use of all means of production, pollutants and expensive associated fuels with imported energy from our neighbours.

The deployment of millions of Electric Vehicles could worsen the situation if V2Grid technologies are not applied. This will happen if the network usage increases remain on the same steep incline.

Smartgrid technology, which is intended to move around electricity to peak use locations at certain times, is one of the solutions that distributors are considering. This intelligent network is made necessary by aging facilities and the introduction of renewable energies. Billions of dollars are being invested worldwide to solve similar predicaments. The introduction of Smartgrid technology will primarily aim to control the consumption and attempt to better integrate the existing production and decentralized renewable energy sources. The renewable energy sources available here on PEI include wind turbine and potentially tidal generators.

The introduction of the Electric Vehicle should not mount concerns for consumption peaks. The Electric Vehicle should instead make better use of these new forms of energy production. The use of electricity at non-peak times will mean that the renewable sources can be a significant portion of the energy being supplied to the grid and consumed by the Electric Vehicle.

The V2Grid technology is involved to balance peak time distribution of available energy including the - EV A each vehicle to ensure the charge on the vehicle remains high enough for the needs of the individual EV owner. This strategy is fully compatible with the use of vehicles recorded by EDF Energy in a study of behaviour and energy use.

The average commute on PEI is 6.2km and the range of even the lowest available EV is 65km. The extra - in´ EV owners for the energy at a rate greater than that charged during night hours.

It is not unreasonable to store up energy at night in the best ecological and economic conditions and return the energy to the network during the day. This usage is entirely consistent with the practices of parking and recharging Toyota Prius batteries in the EDF Study(EDF Energy, 2010).

Using the V2Grid strategy, the emission of up to 110 kilotonnes of CO2 could be eliminated on peak days. The producer maximizes energy production facilities, including intermittent (wind, solar or tidal). The energy consumer buys energy at the best price night and sells high during the day. The consumer buys electricity at a competitive price in return for the added constraint of connecting the vehicle before and after the work day. The consumer has the satisfaction of using the vehicle to a much higher environmental potential.

The Electric Vehicle has the potential to reduce pollution on many fronts. The direct reduction in vehicular air pollution, the reduction in polluting oil extraction worldwide, the pollution associated with additional electricity consumption at peak times are all benefits for the environment by introducing Electric Vehicles along with V2Grid technologies. The V2Grid technology should contribute to clear and smooth production of electrical energy. In addition, it will integrate the best renewable energy sources in the network in optimum conditions. The next stage in the development of PEI is to start considering how and when to introduce the various technologies.

Rollout strategy To wait for organic growth of the EV market may take decades. If success is to be found in waiting or in a different technology then monies spent on infrastructure could be wasted. The desire to purchase a hybrid or Electric Vehicle is higher than expected (Figure 13). Present versus Desired Vehicle Choice of PEI Respondents

Present Desired Future 98.4%

63.2%

26.0% 14.4% 0.6% 1.6%

Electric Vehicle Hybrid Vehicle Combustion Engine Vehicle Figure 13: PEI public survey results, 2012

Active research involving testing vehicles in various locations has been conducted by the Canadian government. An example of such as study is: St. Jerome, Quebec. A select variety of Electric Vehicles were loaned to registered members of the public for a limited time and their experiences, both positive and negative, were assessed. PEI is may be ready to replicate this study. The public was invited to various information sessions regarding the vehicles and the study. Although the full results of the study were not accessible the study appeared hopeful and pos highlights.

If a green energy advocate cannot be convinced to purchase an electric vehicle then what hope is there for sales? The Electric Vehicle movement is ripe and yet the products that the consumers are being presented with are substandard. The products are either technologically deficient or astronomically priced. For the desperate advocate adoption is difficult, the infrastructure notwithstanding.

Recommendations There are many things that are needed, but one of the first and foremost requests from the public is to become informed. The lack of information that has been made available should be considered shameful for those responsible for informing the public. A simple series of media releases with EV information including a simple brochure; like the one produced by the EPRI (see Appendix Public Information Brochure).

When the time comes to distribute Electric Vehicles it is recommended that the vehicles are distributed using existing dealerships, as they are known participants in the automotive market likely trusted for warranties. The survey respondents favoured an existing dealer for Electric Vehicle distribution (Figure 14). PEI Respondents Would be More Likely to Purchase an Electric Vehicle from:

9% 4% existing car dealer

up-and-coming electric vehicle dealer 24% I would never buy an 63% Electric Vehicle I do not want to answer this question

Figure 14: Public survey results 2012

Why only the urban approach? It is not only the urbanites that can use this technology. In the city there is competition for public transit, the concern of quiet driving causing pedestrian accidents, and the concern of parking and charging infrastructure costs. PEI is not considered an urban community, despite C PEI C “ have an urbanite mentality and have been convinced of other urban green technology adoption such as: H C C recovery systems and solar panel installations across the tops of city buildings.

LSVs may have been an attempt at disruptive technology implementation techniques. This disruptive technologies approach should not be abandoned, as suggested by the underlying methodology, it was government intervention that disrupted the implementation and growth of this electric transportation.

Not many readers need convincing of the need for a green revolution to preserve water tables, air quality and green space. It is where the rubber hits the road that many with good intentions are swayed to polluting habits for convenience and self-indulgence. We may even inwardly consider that maybe one day green technology will catch up and be convenient. The green technology of the Electric Vehicle is here today there is no need to wait for the future. iPads, cellular phones, laptops, and even televisions were once a new technology. The investment into each technology has brought about wonderful access and a more free lifestyle. Imagine travelling I - without having to be there the ability to avoid oil changes and transmission checks. Canadian winters at the pump will not likely be missed.

Possible Next Steps C disruptive technology methodology is compelling and demands a response for the alternative direction of electric battery applications. The question becomes what are the consumers believing is a good battery technology? The survey included twelve possible transportation alternatives that could potentially be converted to electric battery-powered. Figure 15 lists the options provided to free-flow text box.

Electric Battery Applications Selected by PEI Residents

Police cars Wheelchairs Airplanes Golf carts Snowmobiles All-terrain vehicles Boats Service trucks Rental vehicles Waste disposal … Motorcycles Trains Passenger … Public transportation Scooters Taxis 0% 20% 40% 60% 80% 100% Respondents Agreement with Alternative Application

Figure 15: Survey Results 2012 Electric Battery Technology Alternatives, N=704

The selection of scooters, trains, and motorcycles was included to ensure options that were already readily available to the market were included in the selection. Taxis, public transportation, passenger vehicles and school buses, waste disposal vehicles, service trucks, and even potentially rental vehicles are all options that may not affect the majority of the respondents themselves. These choices could have been a safe choice because the respondent themselves would not experience the change. The selection of boats, all-terrain vehicles and snowmobiles are all rated as the least likely of the provided alternatives to be a good alternative use for the electric battery. These alternatives are also all recreational vehicles; which implies that it is possible that not all of the respondents may possess these vehicles and feel a similar distance from use and select it as an alternative without much thought. The consideration for being stranded with a dead battery on an electric recreational vehicle may have contributed to the lower number of selections for these vehicles despite the similar predicament if it were gas-powered. The order of the alternatives may have had a minor affect on the results for the paper survey responses. The first three alternatives (taxis scooters and snowmobiles) were on the page with the previous questions, while the remaining selections were on the back page of the survey. The desire to finish the survey once flipping the page and seeing the endpoint may have driven some to skip the remaining selections to comment and complete; the frequency of this cannot be ascertained.

The sales of electric scooters and motorcycles could begin immediately. The presence of consumer acceptance and limited infrastructure that could easily support these transportation alternatives already exists. Trains are not being used at this time on PEI but, if a path for train travel could be established beside the bicycle paths where train tracks used to run and not cause a public outcry, could become a commuters and tourist dream for island access.

The development of electric taxis, public transportation, passenger vehicles and school buses, waste disposal vehicles, service trucks, and even electric rental vehicles are safe options for the risk adverse PEI populous. The risk would be transferred to the provider of the service. A cost analysis would then likely become a driving factor for converting over to an electric fleet.

Another phase of the technology introduction that could begin immediately is the Smartgrid and V2Grid technology. This Smartgrid and Vehicle to electricity Grid infrastructure upgrade would have a long lag time to implement given the upgraded meter distribution and load conditions that would need to be accounted for. This upgrade would likely accompany the local distribution line load assessment and upgrade for general EV adoption amongst the population. The V2Grid technology could be an economy boost in disguise. Positive retailing habits could be formed if plug-in locations were available at malls, restaurants and grocery stores.

Battery swapping stations should also be a serious consideration for vehicles requiring a fast full charge. Fast-charging stations are also good option, but should not be used on a regular basis until the effects of fast charging do not create detrimental memory patterns on the battery or premature degradation of the battery cells. Better Place is a model for vehicle battery fast switching stations. These stations, very much like maintenance stations, would provide a fully charged battery when battery charging degrades or slow-charging is not a convenient option.

Supporting infrastructure that goes beyond energy supply and the various charging apparatus should be initiated immediately. Maintenance and repair programs for colleges require development and parts and supplies providers need to be retrained and retooled.

Future Research One of the most frustrating omissions from this report was the EV technology trajectory graphs. The predictive S-curves of various technologies in PEI (or the Maritimes) would provide a much better technology diffusion rate that would predict EV infrastructure timing. The techniques modeled by Christensen provide a reasonable guideline for developing predictive technology curves. The need for technology diffusion research is paramount if a true diffusion rate for Electric Vehicle adoption is to be estimated. The scope of this project had to be limited from investigating this greatly useful piece of the readiness equation. It is believed that a combination of, yet unpublished, PEI comparable technology diffusion rate curves for technologies such as colour television, cable television, cordless phones, cell phones, and internet use as well as the green technology adoption rate using wind energy power purchase, solar panels, and other alternative energy sourced products might produce a good estimation for a localized Electric Vehicle diffusion rate. The technology diffusion rate gives way for the ultimate value of interest to marketers, which is the Electric Vehicle technology trajectory. It is this rate that will have the greatest impact on estimates for proper timing of marketing strategies and infrastructure investment.

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Appendices

Table of Electric Vehicles Available now in United States and limited in Canada

Make / Description Range Top Price Image Model Speed The ActiveE is BMW's next vehicle in 94 mi 90 mph TBA BMW their EfficientDynamics lineup. It is an ActiveE all electric BMW 1-series coupe powered by a 125kW electric motor (170hp) with 250Nm of torque... Previously referred to as S18, the 75 mi 75 mph $19,000 Chery M1EV by Chery is, 4-door, 5-seater Automobile compact with a 120 km (75 mi) range Co. and top speed of 120 km/h (75 mph). M1EV The M1EV is powered by a 336 V, 16 kWh... Rebadged Mitsubishi i-MiEV. 4-door 80 mi 80 mph $48,000 Citroën hatchback, range 130 km "standard C-ZERO combined cycle", top speed 130 kph, 0-100 km/h 15 sec, 60-90 km/h 6 sec, 330V 16 kWh Li-ion battery... The CODA Sedan is a 4-door, 5- 88 mi 85 mph $37,250 Coda passenger sedan with a range up to Automotive 125 miles (EPA rated at 88 miles per CODA Sedan charge). The Sedan features a 31kWhr Li-ion battery... A unique 2 passenger car with inline 200 135 $108,000 Commuter seating and a range of 40-200 mi, mi mph Cars depending on battery choice. The T600 Tango T600 will accelerate from 0-60 in just 4 sec...

The Puma is an all-electric sports car, 60 mi 75 mph $41,000 EV Drive manufactured in South Africa Puma

The Focus Electric is based on Ford's 76 mi 100 $41,199 Ford next generation Focus body. The mph Focus vehicle is powered by 23 kWh of Li-ion Electric batteries with active liquid cooling.

Ultra narrow tilting 4-wheel vehicle 90 mi 80 mph TBA Lumeneo with two inline seats, 0-60 mph 8 sec, SMERA 10kWh Li-ion battery pack, two 15kW

DC electric motors power rear wheels... The Mitsubishi 'i' is the most efficient 62 mi 81 mph $29,125 Mitsubishi passenger vehicle in North America,

'i' rated at 112 MPGe. The 'i' is powered by a 47kW AC synchronous motor and a 16-kWh Li-ion battery pack... The Nissan LEAF was built from the 73 mi 90 mph $38,395 Nissan ground up to be an EV. It is a 5-seater,

LEAF 4-door hatchback based on Versa/Tida platform. The LEAF has an 80kW electric motor... A rebadged Mitsubishi i-MiEV, the iOn 80 mi 80 mph TBA Peugeot is a 4-door hatchback, with a 130 km iOn range (standard combined cycle) and a top speed of 130 kph... The Kangoo ZE is an all-electric 100 81 mph $27,000 Renault compact commercial van that seats mi

Kangoo ZE two passengers. The Kangoo Z.E. has a curb weight of 1520kg and is powered by a 44kW (70hp) electric motor. An OEM conversion of the Smart 63 mi 70 mph TBA Smart Fortwo. Smart began life as Swatch car ED in 1998, and was first converted into EV form in 2006. The Smart ED will have 16.5kWh of Li-ion batteries... The Model S is a new ground-up 4- 300 120 $65,500 Tesla Motors door, 7-seat sedan built by California mi mph Model S EV startup Tesla Motors. It's range will be based on battery options of 160 mi, 230 mi, and 300... Two seater City car with 180km range 111 60 mph $35,495 THINK (based on MES DEA Zebra battery, US mi City model will use EnerDel LiFEPO4

batteries). Body is ABS recycled plastic and steel.

Chevy Volt Four seater commuter car with 70km 70 km 65mph $41,545 range with gasoline tank to extend to 200km. (often not considered electric due to combustion engine backup) Daimler AG Smart Fortwo ED

Fisker Karma Two seater Fisker Karma is a United 50 mi States manufactured hybrid. Combustion engine extends rage to 300 miles. Two-passenger Smart-sized vehicle 100 65 mph $32,995 Wheego with 45kW brushless AC motor, top mi Whip LiFe speed 65mph, 28kW LiFe battery pack, 10 hour charge time at 240VAC... Clean Air Agenda Program Hierarchy

CLEAN AIR REGULATORY AGENDA THEME

Industrial Sector Regulatory Actions - Environment Canada Transportation Sector Regulatory Actions - Environment Canada Transportation Sector Regulatory Actions - Transport Canada Transportation Sector Regulatory Actions - Natural Resources Canada Consumer and Commercial Products Regulatory - Environment Canada Consumer and Commercial Products Regulatory - Natural Resources Canada Indoor Air Quality Management Actions - Health Canada Science in Support of Regulatory Activities and Accountability - Environment Canada Science in Support of Regulatory Activities and Accountability - Health Canada Emissons Reporting - Environment Canada Emissons Trading - Environment Canada Enforcement Advice and Reporting on Progress - Environment Canada Policy Development, Analysis and Coordination - Environment Canada CLEAN ENERGY THEME

ecoENERGY for Buildings and Houses - Natural Resources Canada ecoENERGY Retrofit - Natural Resources Canada ecoENERGY for Industry - Natural Resources Canada ecoENERGY for Renewable Heat - Natural Resources Canada ecoENERGY for Renewable Power - Natural Resources Canada ecoENERGY for Technology Initiative - Natural Resources Canada Policy, Communications, Monitoring and Reporting - Natural Resources Canada ecoENERGY for Aboriginal and Northern Communities - Indian and Northern Affairs Canada CLEAN TRANSPORTATION THEME

ecoMobility - Transport Canada ecoTECHNOLOGY for Vehicles - Transport Canada National Harmonization Initiative for the Trucking Industry - Transport Canada Freight Technology Demonstration Fund - Transport Canada Freight Technology Incentives Program - Transport Canada ecoFreight Partnerships - Transport Canada Marine Shore Power Program - Transport Canada Analytical and Policy Support - Transport Canada ecoAuto Rebate Program - Transport Canada ecoAuto Rebate Program - Human Resources and Skills Development Canada ecoENERGY for Personal Vehicles - Natural Resources Canada ecoENERGY for Fleets - Natural Resources Canada Vehicle Scrappage - Environment Canada INDOOR AIR QUALITY THEME

Radon Strategy - Health Canada Indoor Air Research and Development Initiative- National Research Council INTERNATIONAL ACTIONS THEME International Obligations - Environment Canada International Obligations - Department of Foreign Affairs and International Trade International Participation and Negotiation- Environment Canada International Participation and Negotiation - Department of Foreign Affairs and International Trade International Participation and Negotiation - Natural Resources Canada Asia-Pacific Partnership - Environment Canada Asia-Pacific Partnership - Natural Resources Canada Asia-Pacific Partnership - Industry Canada PM Annex - Environment Canada Canada - U.S. Clean Energy Dialogue (CED) - Environment Canada Canada - U.S. Clean Energy Dialogue (CED) - Department of Foreign Affairs and International Trade Canada - U.S. Clean Energy Dialogue (CED) - Natural Resources Canada ADAPTATION THEME

Assist Northerners in Assessing Key Vulnerabilities and Opportunities - Indian and Northern Affairs Canada National Air Quality Health Index and Air Quality Forecast Program - Environment Canada National Air Quality Health Index and Air Quality Forecast Program - Health Canada Improved Climate Change Scenarios - Environment Canada Climate change and Health Adaptation in Northern/Inuit Communities - Health Canada Innovative Risk Management Tools/Regional Adaptation Action Partnerships - Natural Resources Canada Climate Change and Infectious Disease Alert and Response System to Protect the Health of Canadians - Health Canada Climate Change and Infectious Disease Alert and Response System to Protect the Health of Canadians - Public Health Agency of Canada

PARTNERSHIPS THEME

Clean Air Community Partnerships - Environment Canada MANAGEMENT AND ACCOUNTABILITY THEME

Management and Accountability - Environment Canada

Total Funding Approved Total Planned Spending Total Actual Spending Actual Spending in under the CAA in 2009-2010 in 2009-2010 2009-2010 Reported within Economic Action Plan (EAP) $2,572,940,366* $709,765,617 $640,313,053 $231,653,448 (ecoENERGY Retrofit Program)

Canadian Electric & Hybrid Vehicles Incentives

EPF Description of Segments and Recommendations Table 7 Description of Segments and Recommendations

Segment Policy Initiatives Marketing Initiatives

True Greens (high environmental values, high environmental self- efficacy) Because True Greens are likely Because True Greens view to be opinion leaders, design themselves as opinion leaders, Greens and Non-Greens policies to reward True Greens design marketing efforts to Less price sensitive than Modest for driving hybrid vehicles and encourage them to share their make their efforts visible to opinions about the environment than Low Potency Greens, Modest others. For example, allow hybrid and their ability to make a Greens, Less skeptical or Non-Greens toward new products vehicles to drive in the car-pool-only difference. Outlets for True lane. Greens to express their opinions problem solving can include blogs and other types Most willing to engage in complex Also, take advantage of opinion of viral communications. leadership than leadership and willingness to Moderate Greens, Modest Greens, or engage in complex problem Marketers can also take Non-Greens Higher in opinion solving by including True Greens in policy development. willingness to engage in complex communications than Low Potency problemadvantage solving of True and Greens technological Greens, Less skeptical but more toward skeptical marketing toward savviness by including True Greens marketing communications than Non- in coproduction of products. Greens -monitoring than Modest Greens or Non-Greens Higher in self savviness than Modest Greens or Non- Greens Higher levels of technological toward Hybrid Cars Highest behavioral intentions Low Potency Greens (medium-high environmental values, low environmental self-efficacy) True Greens are likely to be Use programs that make green skeptical of new products, so efforts observable to take significantly different from that of communicating that a hybrid car advantage of relatively high self- other Price segments sensitivity is high but is not meets formal standards from a monitoring and the potential for government agency (e.g., crash ac

test ratings, EPA ratings) may values. help promote acceptance of tion to reflect this segments Most skeptical toward new products problem solving than True Greens or hybrid cars. Use word-of-mouth campaigns Moderate Less willing Greens to engage in complex or social influence in lieu In addition, emphasizing the of traditional marketing collective difference from communications to overcome Moderate Greens, Modest Greens, or individual decisions (e.g., high skepticism toward marketing Non-Greens Higher in opinion leadership than cumulative ratings for CO2 communications. emissions in the town and how communications it has changed over time) could Make hybrid car acceptance Most skeptical toward marketing improve perceptions of their by others easy to observe (use -monitoring than individual efficacy. unique paint or decals so Low Modest Greens or Non-Greens Potency Greens can observe the Higher in self behavior). savviness than Modest Greens or Non- Greens Higher levels of technological hybrid cars than True Greens, but Lower behavioral intentions toward higher behavioral intentions toward hybrid cars than Modest Greens or Non-Greens

Moderate Greens (medium environmental values, high environmental self-efficacy) Moderate Greens are in the Make it easy for Moderate middle on most ratings. Therefore, Greens to try and adopt hybrid significantly different from that of this group will probably benefit from a cars. They may lack intrinsic other Price segments sensitivity is high but is not direct incentive to act (e.g., a tax motivation or strong attitudes, rebate). Price and skepticism toward but they believe they can make a ical toward new products new products are not tremendous difference. than Low Potency Greens, Modest barriers, but their values do not Greens, Less skept or Non-Greens necessarily motivate this segment to Online marketing programs that act. Thus, an external source of communicate information via the problem solving than Non- Greens and motivation should be offered. cognitive route may be effective Low More Potency willing Greens to engage but lessin complex willing to (relatively high technological engage in complex problem solving Government-sponsored savviness and willing to engage than True Greens education programs can be in complex problem solving). used to improve environmental nion leadership than values. This segment feels they True Greens and Low Potency Greens can make a difference but is not but Lower higher in inopi opinion leadership than convinced it is important. Modest Greens or Non-Greens communications than Low Potency Greens Less skeptical toward marketing -monitoring than Modest Greens Higher in self s of technological savviness than Modest Greens or Non- Greens Higher level hybrid cars than True Greens, but higher Lower behavioral behavioral intentions intentions toward toward hybrid cars than Modest Greens or Non-Greens Modest Greens (medium-low environmental values, medium environmental self-efficacy) Run programs to educate them Personal channels are likely about the environment and to to be effective because it is Greens let them know that they make a unlikely they will actively seek Price sensitivity is higher than True difference. information about hybrid cars or engage in complex thinking on than Low Potency Greens, but more Associate low vehicle emissions their own about environmental skeptical Less skeptical toward toward new products new products than with a reward so they know their issues. True Greens or Moderate Greens individual efforts matter. Grassroots efforts and problem solving than True Greens or Provide tax incentives to traditional, offline advertising Moderate Less willing Greens to engage in complex overcome price sensitivity and may be more effective than provide a non-environmentally online efforts because they are based reason to adopt a hybrid more likely to lean back and let True Greens, Low Potency Greens, or car. the information come to them Moderate Lower in Greens opinion leadership than than they are to lean in to find it skeptical toward marketing on their own. communications than Low Potency Greens Less Offer special financing if price sensitivity is the main obstacle. -monitoring than True Greens, Low Potency Greens, or Lower in self Moderate Greens savviness than True Greens, Low Potency Lower levelsGreens, of or technological Moderate Greens r behavioral intentions toward hybrid cars than True Greens, Low Potency Lowe Greens, and Moderate Greens but higher behavioral intentions toward hybrid cars than Non-Greens Non-Greens (low environmental values, medium environmental self-efficacy) Government sanctions for not This segment would be easiest to adopting hybrid cars may be reach using traditional marketing Greens more effective than incentives to communications. However, it Price sensitivity is higher than True do so. may not be worth investing in this market segment until hybrid than Low Potency Greens but more Education should be simple and cars are as simple and perform skeptical Less skeptical toward toward new products new products than straightforward and may rely as well at a comparable price True Greens or Moderate Greens heavily on incidental learning to traditional, gasoline-powered through slogans and jingles, to vehicles. problem solving than True Greens overcome lack of involvement Less willing to engage in complex in the product category or environmental issues. True Greens, Low Potency Greens, or Moderate Lower in Greens opinion leadership than communications (not significantly different Lowest thanskepticism Moderate toward Greens) marketing -monitoring than True Greens or Low Potency Greens Lower in self savviness than True Greens, Low Potency Lower levelsGreens, of or technological Moderate Greens hybrid cars Lowest behavioral intentions toward

Market Analysis Market Development Total private dwellings A 66943 Number of households on PEI B* 53135 number of vehicles per household C 1.4 estimated number of vehicles 74389 actual number of vehicles registered D 70375 Maximum # Consuming Units E 99362 Buying Ceiling 18.0% Annual new vehicle purchase rate (2011) F 2.61% New green energy technology adoption rate on PEI G 0.5% Annual Market Potential (units) 2.4 Current Demand 1 Market Development Index (MDI) 0.42 MDI = Current Demand X 100% Market Potential Average Price of EV** $ 40,380 Ford Focus Electric 41199 Annual Market Potential ($) $ 16,825 Nissan Leaf 38395 Chevy Volt 41545 A: Statistics Canada Census Profile 2011 -Province PEI $ 40,380 B: PROVINCE OF PRINCE EDWARD ISLAND Thirty-eighth Annual STATISTICAL REVIEW 2011 C: Natural Resources Canada 2008 (pub. Sept 2010) D: 2010-2011, Transportation and Infrastructure Renewal E: Using Canada's present highest vehicles per household value (1.87 for Alberta) Natural Resources Canada 2008 (pub. Sept 2010) F: 2771 foreign and domestic vehicles; Statistics Canada, New Motor Vehicle Sales, Table 7 G: verbal unsubstantiated estimate from Renewable Lifestyles (PEI green technologies company)*** *which is lower than the record Private dwellings occupied by usual residents 56,462 A **average purchase price of EV (not including luxury model S by Tesla) Tesla Model S $65,500 ***taken unsure of value.

Market Share

Market Share Development Path Aware of Electric Vehicles* 94% Attracted to Electric Vehicles* 24% Price Acceptable* 11% Available and Easy to buy* 45% Service Expectation Favourable* 51% Market Share Index 1%

Potential Response Aware of Electric Vehicles* 94% Attracted to Electric Vehicles** 44% Price Acceptable*** 18% Available and Easy to buy**** 94% Service Expectation Favourable* 51% Share Index Potential (SIP) 4%

Performance Gap = Market Share Index- Share Index Potential = - 3%

Share Development Index = Market Share Index Share Index Potential = 0.169

*input values are directly from results of Public Questionnaire **rate of respondents that indicated Overall Look of vehicle was important when purchasing a vehicle ***the current buying ceiling given the current pricing strategy of Electric Vehicle distributors ****the goal to have all those that are aware of EVs know of their availability and ease of distribution Porter 5 Forces

New Entrants entry ease/barriers geographical factors incumbents resistance new entrant strategies routes to market

Supplier Power Competitive Rivalry Buyer Power brand reputation: #, size of firms buyer choice geographical coverage industry size and trends buyers size, # product/service level quality fixed and variable costs bases change cost/ frequency relationships with customers product service ranges product service importance bidding processes/capabilities differentiation, strategy volumes, JIT scheduling

Product & Tech Development alternative alternative price quality market distribution changes fashion and trends legislative effects

Supplier Power

• brand reputation:

• Existing North American Automotive Giants: Toyota, General Motors, Volkswagen, Hyundai, Ford, Nissan, Honda

• Hybrids: 1986 Twike, 1993 Mitsubishi Fuso Aero Star Bus, 1997 Toyota Coaster Bus, 1999 Honda Insight, 2000 Toyota Prius, 2004 Chevrolet Silverado/GMC Sierra Hybrid, 2004 Ford Escape, 2004 Honda Accord, 2006 Honda Civic, 2005 Lexus RX 44h, 2005 Toyota Highlander, 2006 Lexus GS 450h, 2006 Saturn Vue Green Line, 2006 Toyota Camry, 2007 Lexus LS 600hL, 2007 Mazda Tribute, 2007 Nissan Altima, 2007 Saturn Aura, 2007 Eaton Corp trucks, 2008 Cadillac Escalade, 2008 Chevrolet Malibu & Tahoe, 2008 Dodge Durango, 2008 GMC Yukon, 2008 Honda FCX Hydrogen Clarity, 2008 BMW X6, 2009 Ford Fusion, 2009 Lexus HS 250h, 2009 Toyota Sai, 2009 Mercury Milan, 2009 Mercedes-Benz Lith-Ion BlueHybrid, 2010 BMW Lith-Ion ActiveHybrid7, 2010 Honda CR-Z & Fit, 2010 Hyundai Sonata, 2010 Toyota Auris & Highland, 2010 Mazda Tribute Crossover, 2010 Lincolm MKZ, 2010 Porsche Cayenne S

• Plug-In Electric Vehicle: 1969 GM XP-883, 2007 Ford Escape, 2008 Fisker Karma, 2010 GM Chev Volt, 2011 Prius, 2011 Ford C-Max, 2011 Volvo V70, 2012 Suzuki Swift, 2010 Audi A1 e- tron

• Electric Vehicle: 1899 Baker Electric, 1899 Columbia Electric, 1907 Detroit Electric Model 47, 1990 GM Impact, 1996 GM EV1, 2003 Ford Ecostar Delivery Van, 1997 RAV EV, 2009 BMW Mini EV, 2010 Nissan Leaf, 2008 Tesla Roadster, 2008 Smart fortwo EV

• geographical coverage: dominated and led by European Union, China, and United States

• product/service level quality: unknown; combustion engine vehicles came into popularity (when competing technology did not advance quickly enough speed, hand crank removed by starter, overheating relieved by radiator), electric vehicles destroyed before lifespan completed (1930,2003)

• relationships with customers: completely controlled by suppliers, if they do not manufacture they are not used by public

• bidding processes/capabilities: closed market, completely controlled by few giant manufacturers

New Entrants

• entry ease/barriers: • existing automaker dominance makes new entrants too small to penetrate market • resistance to change by both consumers and manufacturers (expense to adopt, hassle of learning new technologies)

• geographical factors: • batteries degraded life per charge in extremely cold weather • no residual heat generated by engine to heat vehicle occupants in cold climate • difference in driving patterns in various locations (distance to work and play)

• incumbent resistance due to expense to adopt and perception of expense to government and taxes for infrastructure

• new entrant strategies: • introduce as one-of and futuristic at auto shows with no solid manufacture deadlines or quotas • non-traditional packaging to peak interest and present as aberrant

• no routes to market have succeeded

Buyer Power • buyers choice shows resistance to change

• Unknown/unproven demand

• Limited buyers for extravagant prices presented

• Higher change cost (home plug-in station, battery replacement, hidden electricity costs)

• product servicing is minimized (not perceived by potential buyers)

• limited volume production in short term; scarcity builds uneasiness in buyers

Product & Tech Development Alternatives

• alternatives: • public transportation (bus/train/plane) • active living • traditional automobile gas/diesel • fuel cell (hydrogen) • hybrid vehicle • biofuels • propane/natural gas

• unknown alternative price quality

• unknown market distribution

• fashionable and trendy

• legislative effects are minimal or have been reversed to benefit traditional gas/diesel

Competitive Rivalry

• very few participants in EV market, large firms inputting limited resources

• massive automotive industry with stable turnover and significant growth internationally

• trending towards introducing hybrids first to gauge market depth, EVs may not materialize in North American market in near future if hybrids do not produce high sales

• EV has higher fixed costs and lower variable costs bases

• high fixed costs to enter market, high variable costs to maintain market (battery replacement)

• untested product servicing

• market not mature enough for significant differentiation, or noticeable strategy alternatives

Electric versus Gasoline Fuel Cost Comparison Comparing Vehicle Energy Costs

Province of PEI A 15288 annual kilometers/ vehicle Canadian Average A 15153 annual kilometers/ vehicle Number of licensed light duty vehicles on PEI roads B 70375 vehicles Monthly costs: 1274 monthly kilometers/ vehicle PEI average fuel efficiency rate A 9.8 Liters/ 100 kilometers PEI fuel purchase rate (October 2012) C 1.30 $/ Liter $ 162.31 cost per month of driving using gasoline sedan electric vehicle (average) D 1kWh = 7.3 km 174.5205 monthly kWh/ vehicle cost for electricity E 0.1205 $/ kiloWatt hour 174.521*0.1205= $ 21.10 service billing costs E 0.15383 $/ kiloWatt hour 174.521*0.15383= $ 26.85 Gst 5% 47.95*5% = $ 2.40 $ 47.95 $ 50.28 cost per month of driving using electricity

1,075,893,000 approximate annual kilometers driven by PEI drivers If all PEI vehicles were Electric Vehicles 150 total GigaWatt hours would be consumed by PEI drivers

*2.2609 km/kWh is the tipping point for equivalency to gasoline use (rating not seen since early 20th Century) *$0.7319/ kWh is the tipping point for equivalency to gasoline use (maintaining all other charges) Sources: A: Natural Resources Canada 2008 (pub. Sept 2010) B: 2010-2011, Transportation and Infrastructure Renewal C: Personal Observation (Charlottetown Irving & Esso) D: ecoPEI energy conversion E: Maritime Electric Aug 2012 Survey

Survey Results Number of Respondents: 718, valid responses after removing out of province and incomplete postal codes 712

Question 1: What type of vehicle do you currently drive?

Response Response Answer Options Percent Count Electric Vehicle 0.6% 4 Hybrid Vehicle (combination of both electric and 1.6% 11 regular combustion engine) Combustion Engine Vehicle (gasoline or diesel 98.4% 689 powered) answered question 700 skipped question Question 2: What type of vehicle would you prefer to drive?

Response Response Answer Options Percent Count Electric Vehicle 26.0% 181 Hybrid Vehicle (combination of both electric and 63.2% 440 regular combustion engine) Combustion Engine Vehicle (gasoline or diesel 14.4% 100 powered) answered question 696 skipped question Question 3: What are the first 5 digits of your Postal Code OR the name of your Community? Response Answer Options Count 712 answered question 712 skipped question 0 Question 4: Please select the criteria that is important when purchasing a vehicle: Response Response Answer Options Percent Count Sales Price 85.7% 606 Fuel Efficiency 90.0% 636 Dependability/Durability 83.7% 592 Interior Room 41.0% 290 Overall Look 43.6% 308 Engine Size/Power to accelerate 21.8% 154 Resale Value 35.6% 252 Safety 66.2% 468 Cargo Capacity 36.9% 261 Quiet Driving 28.7% 203 Ease of Refueling 23.3% 165 Technological features (new unfamiliar technologies 15.3% 108 or gadgets) Other (please specify) 51 answered question 707 skipped question 5 Question 5: Please select the criteria that you believe is met by Electric Vehicles:

Response Response Answer Options Percent Count Sales Price 11.4% 76 Fuel Efficiency 90.3% 603 Dependability/Durability 25.1% 168 Interior Room 11.2% 75 Overall Look 24.1% 161 Engine Size/Power to accelerate 10.2% 68 Resale Value 20.8% 139 Safety 31.9% 213 Cargo Capacity 8.8% 59 Quiet Driving 62.7% 419 Ease of Refueling 25.0% 167 Technological features (new unfamiliar technologies 27.8% 186 or gadgets) Other (please specify) 52 answered question 668 skipped question Question 6: Rate your agreement with the following statements:

Strongly I Don't Strongly Rating Response Answer Options Disagree Agree Disagree Know Agree Average Count A need exists for Electric Vehicles. 10 20 116 330 232 4.06 708 I would like to talk to others before buying an Electric 18 31 43 329 286 4.18 707 Vehicle. Tax benefits exist for purchasing an Electric Vehicle. 17 37 434 143 74 3.31 705 Electric Vehicles are easily observed in use on PEI. 162 303 183 52 6 2.20 706 Electric Vehicles are easily found at a local 119 203 332 42 10 2.46 706 dealership for test driving. Electric Vehicles are as reliable as existing 24 64 474 110 35 3.10 707 combustion engine vehicles. Electric Vehicles are easy to use and service. 14 68 496 100 27 3.08 705 Electric Vehicles are available and easy to 57 185 370 87 8 2.72 707 purchase. Electric Vehicles can offer enough driving range 33 84 289 232 70 3.31 708 (km) for my present commuting needs. I would consider purchasing a used Electric Vehicle. 41 105 156 317 86 3.43 705 Based upon my knowledge at this time, Electric Vehicle technology has met formal standards from 4 18 470 174 35 3.31 701 Canadian government agencies. answered question 711 skipped question 1

purchase or not to purchase one. Further comment (if desired) 41 I believe the Canadian Government is interested in 91 312 245 10 2.26 658 supporting Electric Vehicle research and production. Further comment (if desired) 104 I believe Electric Vehicle technology would be better accepted if it were proven in the racing community 108 284 240 47 2.33 679 (such as the Formula 1 series). Further comment (if desired) 52 I believe there is a low risk level (financial, social, and performance risk) when buying an Electric 36 320 267 27 2.44 650 Vehicle. Further comment (if desired) 103 answered question 706 skipped question 6 Summary of Survey Free-flow Text Responses: Question 8 (using SPSS analysis)

I have the info I need Gov't supports big oil I will now do research Not in Canada Environmental risk I need more info Problem with performance Info is unavailable Financing is the problem I don't know enough

0 20 40 60 80 100 120 Count of Responses

Question 9: I believe Electric Vehicle technology (electric motor and onboard battery) would be a good technology for: (choose all that apply) Response Response Answer Options Percent Count Taxis 76.3% 537 Scooters 70.7% 498 Snowmobiles 33.7% 237 All-terrain vehicles (example: 4-wheeler) 37.1% 261 Boats 37.8% 266 Motorcycles 46.3% 326 Trains 48.6% 342 Passenger vans and school buses 57.8% 407 Service trucks 40.8% 287 Waste disposal vehicles 45.0% 317 Public transportation (city buses) 70.7% 498 Rental vehicles 41.2% 290 Skip this question 6.3% 44 Other (please specify) 3.4% 24 answered question 704 skipped question 8 Question 10: Is Prince Edward Island ready for Electric Vehicles? Please include any additional comments. Response Answer Options Count 482 answered question 482 skipped question 230 Count of Categories Islanders resist change Cost is prohibitive Unsure PEI is ready 176 PEI needs Information 110 PEI needs Infrastructure Technology is not ready PEI is not ready Grand Total 587

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