At-home charging equipment is a no-nonsense part of owning an EV. First, you need a house with a proper parking place within the premises, garage or gated front or backyard, or an apartment in a condo that has charging sockets somewhere in the shared garage or backyard. Second, you need a low-power charging point, a somewhat larger socket than for your washing machine, as recharge will take place over many hours, like during the night. At electricity price of today, a few euros or dollars will give you a decent range for tomorrow.
If electromobility remains for urban use only, the combination of the above and of curbside charging stations for overnight parking in densely populated areas should provide a solution for the acceptance of EVs. But if electromobility is to completely replace thermal vehicles, there is an absolute need for out-of-home charging stations, a network similar to the ubiquitous grid of service-stations to calm range anxiety. For everyone driving an EV (assuming captive fleets will take care of themselves with their own recharging network that befits their own geographical activity). Starting from scratch.
Road fuel marketers, the downstream division of oil companies, have had a century to develop their recharging network of forecourts, even if economies of scale and profitability obligations have driven their number down in the recent past. Although independent retailers, like jobbers or supermarkets, have existed for a long time, if not taken a majority market share. A good part of the network is still owned (or franchised by) oil companies, as part of their integration strategy, from upstream oil drilling to sales of gasoline and diesel to the motorist. They paid to install those service stations, as did the supermarkets as well (but to attract customers in their shops with low fuel prices). These assets may have a low profitability for the oil industry, as retail margins are usually thin, but still participate in the control of the value chain of liquid energy.
Oil & gas companies may eventually morph into energy companies. Some have already and get involved in the retrofit of service-stations to host fast chargers. Electricity supply will then be part of their business, but, today, electricity is mostly in the hand of utilities that are not showing a vibrant interest for electromobility, yet. Pursuing in the category of heavyweights, carmakers so far have mostly played solo, with bespoke fast charging networks like Tesla’s or Ionity’s (VW, BMW, Mercedes, Kia, Hyundai, Ford), although that may change sooner than later.
Even the car-side of the charging device is not compatible between the models from different carmakers (and we do remember it took ten years for the European Commission to impose a universal charger for smartphones, starting next year or the year after. Keeping a competitive advantage or a captive customer base, with an object as nimble as a charging device, is always the name of the game in our capitalist world). If large companies do not get involved and cooperate, unlike oil & gas for service stations, this opens an opportunity for smaller “pure” players, newcomers, intermediates between electricity point suppliers and motorists wishing to recharge on the road.
Their challenge: offer a fast, while affordable, recharge service and be profitable.
As for the first issue, the technology today calls for powerful charging stations, 150 to 350 kW, capable to provide a 300 km autonomy in less than half an hour (as in the pledge of the French motorway association for summer 2023). Installing a station with 6 to 8 points of recharge may cost between 1 and 2 million euros, no small sum for a start-up company, promising a long-term profitability only, 15 or 20 years payback. Potential investors may well have a few questions and worries about the breadth of the proposer, who must be capable, not only to negotiate with utilities and host (municipality, motorway authority, service-station), when it is not with the political powers-to-be to get subsidies, but who must also be able to deal with engineering, installation, repair. Not to forget a few important additional questions and worries, some touching on profitability:
What will happen to this investment if the battery-swap approach, a fifteen-minute affair according to developers, prevails?
What is the EV business model of the future, small cars for frugal-style mobility, benefiting from range extension by battery technology breakthrough, or a race to ever-larger and faster SUVs, as in the last decade? The power required for the charging station is not the same, much lighter in the former scenario, neither is the investment.
How can the operator protect its profitability against an inflation of the electricity price? And how to react in case of the electricity supplier asking for a voluntary power reduction, like in California this summer because of a massive heat wave?
In sheer number, the need for out-of-home charging stations may look small, compared to the multiplicity of home or urban ones, but they are critical for the full adoption of electromobility. And they must be available sooner than later, like today, as EV sales accelerate, way ahead of the recharge infrastructure deployment, and to make sure the electromobility fast-track strategy is respected. A tough challenge for the brave investing in the recharging infrastructure.
Philippe Marchand is a Bioenergy Steering Committee Member of the European Technology and Innovation Platform (ETIP).
