Reuters: Competition For Charging Spots Heats Up, Consolidation Coming
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A recent report at Reuters gives a picture of how the EV charging industry continues to evolve. Two big trends are that charging companies are already competing for rights to the best spots, while there are signs that consolidation is coming.
When it comes to spots, the differences between the gas station model of vehicle fueling and the way EV charging works start to come into play. Instead of creating a dedicated fueling station, charging operators try to put stations near major highways for traffic and near existing businesses for amenities. This puts the property owner in the driver’s seat, especially when multiple charging companies come calling for the most prime locations.
Partnerships are a big part of the strategy right now. While “mom and pop” shops can and do get offers to locate chargers or rent space for them, it’s sometimes easier for a large charging company to partner with a large chain business. Deals can even be multi-lateral, as the recent announcement between ChargePoint, Starbucks, and Volvo shows us. Getting multiple ducks in a row before firing can be more efficient.
But some companies are bucking the trend with their future plans. Instead of bringing the charging to where people want to be, some are planning on bringing amenities to the chargers. Mega-stations with dozens of chargers can be lucrative, but they need to attract businesses to take advantage of the coming wave of drivers at these locations.
But, as big investors venture into the charging company space, the analysts Reuters talked to say that we’ll also see consolidation. Larger and larger investors will want to get more economy of scale and will want to buy up multiple existing operators to build bigger networks.
That having been said, the analysts do think that there will continue to be room for new operators going forward, even if consolidation is a thing.
One Thing That Seems To Be Left Out Of The Discussion
All of the discussion about big stations, prime locations, and mega-stations all seems to revolve around traffic. To get to profitability, the analysts say 15% utilization is needed, with more profits to be made at higher utilization rates. But, the question of what to do on low-traffic routes is still hanging over the industry.
It might seem trivial for the most backwater routes to have EV charging because so few people drive there so rarely, but when people buy a car, they need to be able to do all of the driving they planned to do. If someone goes on a backroad only once a year, they’ll feel like someone is trying to sell them 99% of a car instead of 100% of one.
So, we need to find a way to attract investment onto the more rarely-traveled routes and not just put more and more of them along the interstates. There are innovative technologies like battery-powered charging stations that can ease the pain of installing these stations, and there are plenty of rural business owners who would gladly host a station. But, somebody needs to invest in them and find a way to turn a profit.
Featured image by Jennifer Sensiba.
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