Fastned presented its third quarter results on Tuesday, October 12th. The results were even higher than expected. The third quarter is normally about the same as the second quarter. The weather is warmer, giving more range, the traffic lighter in the vacation season with fewer regular customers, but more people are making longer journeys that need a recharge to reach their destinations.
Just as in my recent article about the second quarter, this is about the sales per station. Just looking at the revenue is not what you do when assessing a retail chain. And a charging station operator is a retail chain.
Opening a lot of unprofitable new stations can increase revenue, but it can also explode losses. Enthusiastic exclamations about high numbers of new stations from the competition are nothing to worry about. What are the locations of those stations? Will they ever be able to earn the money invested?
While sometimes slow growth and Fastned’s insistence on prime locations has been frustrating, it does pay off. The third quarter saw 26% higher revenue per station than the second quarter. The 10 new stations opened in this quarter likely had a slightly negative impact on revenue per station. Customers must learn to find the new stations. In new areas, new customers have to learn to use Fastned as a charging provider.
This week, I saw a station with all four chargers in use and a line of four other vehicles waiting. Later the same day, I waited for over half an hour until it was my turn. That is when I learned never to visit a station at a prime fast-food location around dinnertime. Other drivers really enjoy their food while their car tries to go from 99% to 100%. That last percent can take some time. …
The cold fourth quarter and the even colder first quarter are the quarters with the most traffic, and a lot of new BEV drivers on the road. These are the quarters most of the growth is realized in normal years.
The last four quarters the sales per station were: (Q4 2020: €14,504), (Q1 2021: €14,925), (Q2 2021: €16,580), (Q3 2021: €20,915). In the last normal quarter Q4 2019, it was €14,939, and the first 2 months of 2020 before COVID made €20,000 the target for Q1 2020. Now, in Q3 2021, sales per station passed the level of the last two months before COVID. Not all COVID influences are gone, but we are clearly on the road back.
Based on the financial report over H1 2021, sales per station need to grow to about €38,000 per quarter. That is for “Fastned Retail” to get into the black. Before COVID, growth per station was well over 100% YoY. If life returns to normal, there is some catching up to do. Without all the uncertainties of the economic situation, the revenue ramp of new stations, the number of new stations we will see coming, and more, my bet would be during summer 2022. But with the experience of the last few weeks, with customers waiting in line at several stations, it could even be sooner.
Regretfully, there is no Fastned Retail and no Fastned Projects, just one Fastned spending a lot of money on building new stations. That single Fastned will write its financial results in red for the foreseeable future. But when the losses are generated by building new stations that will become profitable in the short term, the market will not complain about those losses.
Besides opening new stations, Fastned is installing more and faster chargers at its current stations. Expanding the number of chargers per station is a good way to increase sales capacity for a relatively small increase in Depreciation and Amortization (D&A). Placing 4 extra chargers at an existing station costs a lot less than building a completely new station, even without accounting for all the red tape and permitting required before a new station can be built. Nevertheless, it is no substitute for building new stations. Even in the Netherlands, we need twice the number of highway locations we have now (at nearly a hundred now). Last week, I encountered four new stations being built during a single drive home.
In other countries, Fastned is expanding too. For the AAA locations along the highways, it is all about winning locations in the tenders that are starting to happen.
In France, the first tender of 9 locations has been won and a lot more tenders have started, with decisions not later than the first half of next year. Building the stations is planned for shortly after the locations are awarded.
In Germany, approximately 200 AAA locations along highways have been tendered in 4 lots, with 900 other locations in 23 lots also coming. The German federal government has a huge budget for financing these stations, but the price in entrepreneurial freedom is high. This creates a catch-22 situation for the CPOs. They can not afford not to get as many of these locations as possible for their long-term future. They can also not afford to get any of these locations if they want to keep functioning as independent commercial companies. … Some mediation is in order.
In Flanders, about 30 locations have been won in three tenders. Many of these are now being built and will open in the next couple of months. Fastned can now concentrate on find lots in great rural and urban locations. That will make the density of charging stations in Flanders about as high as in the Netherlands. Flanders will also see a sharp rise in BEV sales market share. The fiscal treatment of BiK (Benefit in Kind) company cars will exclude fossil fuel vehicles in a few years. Flanders could become Fastned’s second biggest market in 2023.
Fastned did not communicate any news about the UK and Switzerland. That does not mean nothing is happening in those countries, just nothing press release worthy.
Fastned’s ambitions are Europe wide. But every country requires a local organization. Fastned has them now in six countries. That is about thirty countries waiting. The fastest way to get Fastned to your country is pointing them to great locations. And I do not mean that you write that Rome, Milan, and Naples are great locations. If you know about lots that are for sale or for rent at a great location, that might get them interested.
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