Some company conference calls to discuss financial results with the investment community are more interesting than others. Last Tuesday, April 13, 2021, Fastned discussed the 2020 complete year and Q1 2021 results with the usual suspects from the financial institutions. If you read this excellent article by Mark Kane, you will be better informed about the finances than by listening to the webcast of the conference call.
That is not to say the conference call was not interesting — to the contrary. But the main topic to my biased ears was the Fastned expansion that is now really starting to happen. Browsing the slides used during the webcast is very informative.
Fastned was enormously proud it kept growing during the Covid-19 lockdown. It also mentioned that the Q1 results were probably 60% lower than they would have been without the pandemic. This is calculated based on kWh charged per BEV on the road in the Netherlands. The hope is sales will recover towards the level seen before the time of lockdowns, shop and school closings, and curfews. That is hopefully around this time next year IMHO.
Fastned has ambitious expansion plans. This year over 40 new stations, next year even more new stations. For these stations, Fastned needs a lot more locations. The aim is to reach 1,000 stations by the mid of this decade. Part of these locations will be on concessions auctioned by the government or administrators of the highway system. These are often excellent locations, but for a relatively short time, like 15 years. Many highway gas stations must bid on their locations every couple of years.
Fastned would like to own or have a long-term lease or ground-rent contract to ensure a better ROI for their stations. The revenue from charging stations is a lot lower than the revenue from gas stations. Most charging is done when the vehicle is not in use at home or at work. Also, BEVs are more efficient, and electricity is cheaper. All of these are factors that contribute to lower turnover per station.
The search for these locations is an important activity and Fastned is asking its customers and the public for tips. There is no finders-fee for pointing out great locations. Otherwise, I would suggest locations like Baraque de Fraiture in the Belgium Ardennes along the A26. Anybody having or knowing a great location near a highway on/off-ramp can visit the Fastned Location Tip page.
The stations need to be bigger than the current stations to accommodate the growing number of BEVs on the road. After all new car sales become fully zero-emissions cars between 2025 (my estimate) and 2030–2035 (government ambitions), it will take about 20 years for all the ICE vehicles to be replaced. This means that the next 30 years are a time of building new stations and upgrading/expanding existing stations. Investing in station expansion a few years before the station’s concession is up for renewal is not something a company can do. During the transition to Z.E. driving, companies operating the stations should not be discouraged from growing the stations according to growing demand. Concessions should be granted for the full period that the old FFV fleet is being replaced by a ZEV fleet. This is likely until 2045 or 2050.
In most countries the market-share of BEV sold is still in the single digits. To have 20% of the vehicles on the road in 2030 fully electric is considered ambitious by most forecasters. For a charging company like FastNed the next years (decade?) will be the effort to grow to profitability. To face a new bidding round for your locations just when they become really profitable is not an appealing prospect.
The process of turning a possible site into a working fast charging station is a long and tedious one. What Tesla was recently complained about in relation to obtaining the permits for its Brandenburg Gigafactory is what Fastned has to endure for nearly every station it is building. The red tape can take over two years. There might be a significant waiting time for the grid connection. The materials and equipment ordering take another 4–6 months. The actual building takes 2–6 weeks.
When we see Fastned taking 2–6 weeks to build a station when driving by in our BEV with a nearly depleted battery, we think that is a long time. It is not, it is just the tiny tail of the process that is visible.
To plough through this morass, Fastned will double its workforce. That is 50-75 new full-time employees in the next 1–2 years. Many in the local offices must deal with local regulations and paperwork. Each local office is tasked with building a new station every 2 weeks. That is very, very ambitious. It is also less than what is needed for the transition to electric driving.
Beside the highway supercharging locations that aim to enable driving in another 10–20 minutes, the transition needs even more fast charging stations in places people park for a half hour to two hours. These are typically shopping malls or retail big box store locations. Many lower cost BEVs do not have 11kW or 22kW three phase charging, only single phase charging, but with their CCS plug they can smart charge at 10kW to 50kW, depending on the time they are going to spend shopping, watching a movie, or working out in the gym.
There should not be a big parking lot at such a location without a fast charging station in it. It is a customer magnet. It would be a win-win-win for the location, the visitors, and the charging company.
Back to the reason of the conference call: the Fastned financial report for 2020 and Q1 2021. The 2020 revenue was €6,890,000. Operational EBITDA was €872,000. The costs associated with growing the network were large, resulting in a 2020 net profit/loss of -€12,401,000. Yep, the loss is about twice the revenue, yet it is still a company with excellent prospects.
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