The connected car meets the smart grid

Over the past week we saw some initial reviews and test drives of the new luxury plug-in hybrid from GM, the 2014 Cadillac ELR. Because the ELR is the first green luxury car from a major American automaker, many have pegged this as a Tesla vs. Cadillac showdown even though I suspect that most analysts, including myself, don’t actually believe that the car is a a competitive threat to Tesla.

Here’s the review from edmonds.com. It’s not good:

Sure, the engine coarseness in extended range won’t bother you much if your sphere of operation keeps you within the EV range. Volt owners do it all the time. But this car costs twice as much. The beauty of a plug-in hybrid is you can drive it anywhere, but if you fork over this much you want to enjoy yourself every mile. The 2014 Cadillac ELR seems to shed half its price and sophistication when the motor kicks in.

And at the end of the day it’s not that quick, not that engaging to drive. Cadillac would like us to think of the ELR as a 6 Series or Tesla Model S competitor instead of a hyper-expensive Volt, but that’s how it drives, for the most part.

So at $75,995 the car is very expensive, given that early reviews have likened it to a souped up Chevy Volt, on which the car is roughly based. It is also suffering from the fact that it must live in the shadow of Tesla and every mention of the car also gets a mention of the Model S.

So the reviews thus far have been lukewarm save for some accolades for a well designed and appointed interior. But there was one very interesting feature built into the car that is innovative and it relates to GM’s award winning OnStar cloud based system, which has always been a point of strength for the company.

The ELR will be so called “Smart Grid ready” right off the production line. This means that it will be able to communicate with utilities and include APIs that 3rd parties can build on.

The typical features of the OnStar mobile app are included as well. They give drivers remote access to the car’s operating system providing data like remaining charge, driving range, equivalent miles per gallon.

But the app will also allow ELR owners to schedule charging around dynamic time-of-use pricing. ELR drivers will be notified by email of various rate plans and the cost savings of charging during certain times. Additionally, there will be demand response functionality built into the OnStar service, meaning utilities could begin providing incentives for ELR drivers to shift charging times during demand response events.

Finally there’s talk of “aggregated services,” which would allow utilities to manage the overall charging of ELR’s in a given geographic area. The benefits of this service to a utility could be amplified in a world of renewable energy. Not only could charging be scheduled around demand response events but as importantly, be scheduled around when the sun is shining and the wind is blowing.

I’m not expecting big sales for the ELR, but what’s interesting to me is that OnStar is going to begin to aggregate lots of data surrounding EV charging, data that could be of value to utilities trying to manage and shift load, as well as handle demand response. And given that the OnStar system is in most GM cars, as the company rolls out more and more EVs over the next 5 years, I could see reaching a point of critical mass where there actually are enough EVs on the road for the data and the service to be of value to utilities.

For years now, the automakers have known that there would be a point when the number of EVs on the road actually would create a problem for utilities as load characteristics would start to shift dramatically. It’s a risk for them because if there are charging issues related to the availability of power, it would worsen the customer experience. GM and others have had the foresight to start the conversation about how to address this potential issue and even as the ELR will struggle in a Tesla dominated world, the new OnStar features are a good step.

Relevant Analyst
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Adam Lesser

Analyst Gigaom Research

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