While the market for electric vehicles (EVs) is still very small, it’s important to recognize that EV telematics are at the cutting edge of the telematics industry.  As I point out in my report on EV Telematics, 73% of EVs in 2012 have “connected vehicle telematics” – packages that include streaming content and cloud applications.  This mix is expected to grow to almost 80% by 2017.

In June, I am moderating a panel at the Telematics Detroit 2012 conference on telematics for EVs.  The event, which will feature panelists from Continental, Nissan, Agero and SAP, will not include individual presentations.  That’s a good thing because it means more time dedicated to the panel discussion.

It’s also clear that this conference will cover the telematics industry overall.  Many of the sessions are focused on digital content for vehicles, pay-as-you-drive (PAYD) issues, and the interaction of automotive OEMs with other service providers.  The telematics for EV session will be part of the Auxiliary & Vertical Markets track, which is interesting because this panel will cap off a day of fleet, aftermarket, and mobile health telematics panels.

We’ll be discussing many of the key issues facing the telematics industry as a whole, but from the perspective of EVs.  This will include differentiation between traditional vehicle and EV telematics, smart grid integration, privacy issues, and how important telematics are given the rise of smartphones.  Aside from the differentiation question, the telematics industry is going to be facing a variation of all these issues in the broader automotive market.

Obviously, in a 35 minute panel we can’t cover all the issues facing EV manufacturers and telematics suppliers.  EVs are likely to be among the first to get a PAYD tax system applied to the vehicle owners, and the small size of the EV market raises questions of how OEMs can use telematics as a tool to promote the value of the vehicles.  With such a high concentration of connected vehicle telematics in the EV market, there may also be faster influence on the market by social media companies.

In a smarter grid world, what new software applications will resonate with consumers?  Tendril, a Boulder, Colo.-based software platform provider for energy markets, has made a move in Europe that will help answer the question.  Tendril has partnered with Dutch retail utility Essent to create a unique energy application crowdsourcing project.

Here are details of how the project is expected to unfold:

Later this year, qualified independent software application developers will use Tendril’s Connect cloud platform to gain access to interval-usage data from smart meters.  Armed with this data, the developers are expected to create web-based and mobile applications aimed at energy efficiency in the home (see Pike Research’s latest report on Home Energy Management for our market view) – such as automation tools for switching off lights and controlling thermostats, or “dashboards” for showing real-time energy consumption and pricing.  Then these applications will be made available through a kind of energy “app store” to a small test group of Essent residential customers whose homes are equipped with smart meters; these customers will provide feedback to the developers and rate the apps.  Winning applications won’t be chosen by the utility, but rather by consumers themselves who will be choosing the ones that work best for them.

Eventually, the applications could be made available to all of Essent’s 2 million residential customers, and could go out to millions more through Essent’s parent company, RWE Group, which serves 24 million customers.

The project got a jumpstart during a “hackathon” event in Amsterdam called The Next Web Kings of Code Hack Battle, in late April, at which the project concept was presented to potential developer partners.

I like this idea of bringing software developers into the mix and letting consumers evaluate the results.  Clearly, this will help speed up the process by enabling creative people from outside the traditional energy industry to experiment in new ways.   Who knows, perhaps the Angry Birds of energy is just around the corner.

On May 24 I’ll moderate a panel at ConnectivityWeek in Santa Clara, California, called “Getting Useful Applications to Consumers.”  The panelists and I will be delving into these same types of issues: What consumers want, and what can be made available to them through new applications? And, like the “hackathon” event in Amsterdam, the ConnectivityWeek conference sponsors are holding a similar contest to see who can come up with cool new energy apps.  If you’re in the area, come and join the discussion.

Living in the United States, it can be easy to think that there is little happening with fuel cells.  For the transportation sector, all of the momentum in the U.S. is on the battery electric vehicle side – with billions in private and public money being invested in the cars, the batteries, and the charging systems.  Fuel cell cars have to a large degree dropped off the public radar in the States.  And for some reason this sense that fuel cell cars are over has bled over into other fuel cell markets that are unrelated to passenger cars.

There is in fact a lot happening with fuel cells, especially in the European Union, Japan, and South Korea.  So it is useful to get outside the bubble one lives in and find out what else is happening.  That’s one of the benefits of the annual World Hydrogen Energy Conference (WHEC), one of the few annual hydrogen industry events specifically designed to offer a global perspective.

This year’s WHEC is being held in Toronto, Canada from June 3^rd through the 7^th.  Because the event is in Canada, Canadian firms are naturally being highlighted, with fuel cell companies Ballard and Hydrogenics especially prominent.  But this event is about exploring the range of work on fuel cells and hydrogen around the world.  The speaker line-up includes representatives from well over 30 countries.

There is a particularly strong German presence, reflecting the leadership role that Germany has taken in promoting fuel cell cars, buses, and stationary power.  The German National Organization for Hydrogen and Fuel Cell Technology (NOW) has a featured spot and hopefully will give an update on its efforts to support the commercialization of fuel cell technologies.  This program has been allotted $680 million in public funding, matched by a minimum of 50% industry cost share.  The program is explicitly focused on market preparation.  Daimler and Linde are also prominently featured, and will probably talk about their partnership to build 20 public hydrogen filling stations in Germany.

Indeed, the automotive outlook panels overall should prove interesting.  Automakers are about two years out from their target date for commercial vehicles, which means they are focused on bringing down costs for that target.  I am hoping to get some more public signals from them on what to expect.

Another interesting aspect of this show will be the reports from representatives of emerging economies.  South Africa has several speakers on the agenda, which is unsurprising considering that South Africa is the largest producer of platinum.  Nevertheless, fuel cell activity there has been slow to develop.  India and Brazil are also to be highlighted.  The R&D Centre for the Indian Oil Corporation will talk about the potential for fuel cells to provide backup power for the booming telecom market.  Brazil is exploring fuel cell buses, an obvious fit given the size of its bus manufacturing industry. The WHEC agenda highlights the range of activities around the world on fuel cells and hydrogen – providing a useful corrective to our sometimes insular view from the U.S.

Almost every big automaker fell short of their first-year sales targets for electric vehicles (EVs), and even though total EV sales in 2011 beat hybrid sales in 2000 (the vehicle’s first year on most markets) by a hefty margin, EVs took a beating from media outlets.  Bad press or not, EV sales will continue to remain a mere fraction of overall vehicle sales until OEMs figure out how to sell EVs at a drastically lower price.  One possible approach currently being tested by French automakers could prove, if successful, to be an industry standard, at least until the cost of EV batteries falls by half.

The reason why an EV’s price has to come down is made clear by a recent New York Times piece that examines the return on investment of an EV against a similar energy efficient vehicle.  For instance, the $31,767 (after tax credits) Volt payback period is estimated at 26.6 years compared to the $19,925 Chevy Cruze Eco.  For this reason the EV market is highly dependent upon a small group of “affluent green” consumers rather than a broader customer base.

The major culprit for the excessive price of the EV is the cost of the battery which can be over 35% of the vehicle’s cost.  To be sure, some battery developers have announced technological breakthroughs that would halve that cost.  But a breakthrough of that type will not be commercially available for five to ten years.

To shorten this delay, French OEMs Mia Electric and Renault are spearheading a business model that may prove attractive to more mainstream drivers.  To reduce upfront costs, Mia and Renault have set up options where EV drivers can purchase the EV without buying the battery.  Instead, EV owners will rent the battery at a cost of around $50 to $100 a month.  Although the total costs over time are still significant, the business model allows for a more affordable initial purchase price and reduces the financial risk to EV owners, in that the battery is guaranteed for life.

Mia began production of its EV in June of 2011 and since then has sold over 1,000 of the cars at a little over €15,000 (after state incentives).  The battery rents for €49/month.  Four EVs from Renault, all with battery rental plans, have reached European markets with estimated prices from €7,000 for the small urban Twizy, to €21,000 for the larger Fluence Z.E. sedan.  Europe’s largest automaker, Volkswagen, may also adopt the business model when it releases its EV offerings next year.

The battery leasing model certainly presents an opportunity for OEMs to make initial prices more competitive with other fuel efficient vehicles.  However no maker selling plug-in models in the United States has indicated it will start a leasing program here.  In an interesting development, Nissan has indicated it may lease batteries, but also just in Europe, where its Leaf will compete against the ZOE, which is made by Nissan’s European partner Renault.  The ZOE is set to sell at half the cost of the Leaf, thanks to the battery leasing program.

U.S.  OEMs could be wary of bearing the financial and legal burdens inherent in leasing a technology with so many perceived unknowns, or perhaps the automakers assume the economics of owning a vehicle and leasing its fundamental power source are too confusing for consumers.  (The familiar telecom model of buying a subsidized handset and paying a monthly service fee would indicate otherwise.)  At any rate, if the European programs boost sales, you can be sure the model will make its way across the Atlantic.