GRA
Well-known member
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Navigant: Finding a Pathway to Profit for EV Charging
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RegGuheert
Well-known member
The article seemed to focus on the rather-obvious factors while completely missing other real costs which will tend to destroy the business case for deploying EV charging equipment such as maintenance costs caused by breakdown, misuse, abuse and vandalism. Instead, they have this to say about ongoing costs:
Another factor which was completely ignored was the issue of the lack of standardized charging equipment. This issue, just like maintenance, tends to add significant cost risk which can destroy nearly any business model by making equipment obsolete before it can be paid for. If nothing else, the lack of standardization tends to fragment the addressable market, forcing a decision between multiple market segments or additional costs to address multiple segments simultaneously.
Finally, the future costs of electricity for EV charging paint quite a murky picture. Many utilities are moving to demand charges or plan to do so in the near future to discourage heavy usage, particularly during peak consumption times. Unfortunately, these peak times often occur during the daytime hours when public EV charging is most likely to occur. This effort may intensify if the utilities believe the growth in EV popularity will change their load characteristics significantly. OTOH, movement of electricity generation from fossil fuels to renewables should, over time, move the most-desirable EV charging window from nighttime toward daytime. Navigating an EV charging business through this changing electricity landscape could be quite tricky indeed.
Given the difficulty of making a business out of EV charging, I have a bit of trouble seeing the growth from $81M to $2.9B in 10 years that they seemed to pull out of thin air to put into the colored chart.
Such a glaring oversight can easily make the difference between a 6-to-9-year payback period and a failed business.Navigant Research said:
Another factor which was completely ignored was the issue of the lack of standardized charging equipment. This issue, just like maintenance, tends to add significant cost risk which can destroy nearly any business model by making equipment obsolete before it can be paid for. If nothing else, the lack of standardization tends to fragment the addressable market, forcing a decision between multiple market segments or additional costs to address multiple segments simultaneously.
Finally, the future costs of electricity for EV charging paint quite a murky picture. Many utilities are moving to demand charges or plan to do so in the near future to discourage heavy usage, particularly during peak consumption times. Unfortunately, these peak times often occur during the daytime hours when public EV charging is most likely to occur. This effort may intensify if the utilities believe the growth in EV popularity will change their load characteristics significantly. OTOH, movement of electricity generation from fossil fuels to renewables should, over time, move the most-desirable EV charging window from nighttime toward daytime. Navigating an EV charging business through this changing electricity landscape could be quite tricky indeed.
Given the difficulty of making a business out of EV charging, I have a bit of trouble seeing the growth from $81M to $2.9B in 10 years that they seemed to pull out of thin air to put into the colored chart.
GRA
Well-known member
The link in that article shows the table of contents of the much more detailed report, and presumably how they get to that $2.9b figure is described in that, assuming anyone (not me) is willing to pay big bucks to read it.RegGuheert said:
RegGuheert
Well-known member
Thanks. I didn't see the table of contents.GRA said:
No matter. Of the issues I raised, I see no mention of standards issues*, reliability issues, the potential backlash from utilities toward PV and the eventual need to move charging from nighttime to daytime as renewables grow.
Like many research reports, I suspect this one is designed to tell the target customers exactly what they want to hear: "This market will be huge in a few short years!"
*There is a small section called hardware interoperability which may be related to this issue.
minispeed
Well-known member
They hit the nail on the head here "This will be even more accurate as we see affordable, longer range BEVs come on the market, since the need to top up during the day will be lessened"
I think the future of public charging has only 3 types of companies who will benefit, and I think all of them will have to give the power away free or at a loss to make it work. The first is Tesla, and I guess Nissan's no charge to charge is similar. The cost of running charging is included in the cost of the car and it's only there to support the sales of the car. The second is as the article mentioned a business that gives away free charging to support another business, the people that will have the most success are those that have customers for extended periods and paid parking in city centres. The third are the power companies. If they want to get more people on board buying cheaper power from them every night they may find it beneficial to support some type of cheap or even free public charging to convince more people to get off their ICE.
I think the future of public charging has only 3 types of companies who will benefit, and I think all of them will have to give the power away free or at a loss to make it work. The first is Tesla, and I guess Nissan's no charge to charge is similar. The cost of running charging is included in the cost of the car and it's only there to support the sales of the car. The second is as the article mentioned a business that gives away free charging to support another business, the people that will have the most success are those that have customers for extended periods and paid parking in city centres. The third are the power companies. If they want to get more people on board buying cheaper power from them every night they may find it beneficial to support some type of cheap or even free public charging to convince more people to get off their ICE.
adric22
Well-known member
I think location is everything when it comes to EV charging. And so far, at least around here in DF/W, most of the charging stations we have are in places that never get used. Well, except for the DC fast chargers because they don't have to hang around there very long. But for L2 stations they absolutely have to be located at great destinations. We simply don't have that around here.
Slow1
Well-known member
I wonder if the author(s) have ever driven an EV (much less lived with one for a while).
Yes they touched on some of the obvious issues of increased range/home charging option. What they seem to have ignored (which I believe is essential) is the question of whether consumers would be willing to pay anything higher than their home electrical rate if they don't HAVE to do so. Once range is there to only charge at home, what are the factors that would entice users to charge away from home? Once range is there to cover a couple day's driving would anyone with the option to charge at home ever want to charge away from home? That is the key question to answer for any forward looking analysis of demand.
My suspicion is that their revenue numbers are based on projected number of vehicles on the road and current utilization rates. Utilization rates for L2 (they acknowledged at least) will be impacted/reduced with increasing range of vehicles. I would expect that well placed DCQCs may see increasing rates of utilization.
IF I were to be betting/investing in any network, I would be looking to secure the rights to future placement of these DCQC stations. Location will (as always) likely be everything for success/failure of such a business.
But ultimately the Achilles heal of any public charging network will always be the next best alternative for consumers which is home charging. Sure, L2 stations are used today - but consider the question of "Why?". I submit that the primary reasons are 1) Lower cost (i.e. free), 2) Insufficient range of vehicles ("need" to increase range to minimum daily use), and 3) Desire to increase utilization (i.e. you use it to show support/demand to encourage additional growth). Only #2 has the potential of being the basis for a L2 commercial enterprise and that will be eroded quickly as vehicle range increases.
High speed (DCQC or whatever comes after) charging options do have potential for road trips as 'charge at home' is not really an option if you are driving across the country. But folks who need to travel across the country are unlikely to be willing to spend more time charging than driving. If I 'burn' 20kWh an hour (driving 75mph in Leaf is about this wouldn't you agree?) implies that I need to charge at least at 20kW in order to have equal driving/charging. Now, what is the drive/stop ratio that folks are willing to have on a long trip? When driving my ICE I generally plan to stop every 3-4 hours and expect that stop to be about 30-45 minutes. So going with shortest time that would be 3hrs (60kWh) of driving with 30 minutes stop (approx 120kW charging rate). Hmm... Guess we still need some maturation of the tech to do that (or battery swaps...).
Don't need a research report to predict that trend eh?
Yes they touched on some of the obvious issues of increased range/home charging option. What they seem to have ignored (which I believe is essential) is the question of whether consumers would be willing to pay anything higher than their home electrical rate if they don't HAVE to do so. Once range is there to only charge at home, what are the factors that would entice users to charge away from home? Once range is there to cover a couple day's driving would anyone with the option to charge at home ever want to charge away from home? That is the key question to answer for any forward looking analysis of demand.
My suspicion is that their revenue numbers are based on projected number of vehicles on the road and current utilization rates. Utilization rates for L2 (they acknowledged at least) will be impacted/reduced with increasing range of vehicles. I would expect that well placed DCQCs may see increasing rates of utilization.
IF I were to be betting/investing in any network, I would be looking to secure the rights to future placement of these DCQC stations. Location will (as always) likely be everything for success/failure of such a business.
But ultimately the Achilles heal of any public charging network will always be the next best alternative for consumers which is home charging. Sure, L2 stations are used today - but consider the question of "Why?". I submit that the primary reasons are 1) Lower cost (i.e. free), 2) Insufficient range of vehicles ("need" to increase range to minimum daily use), and 3) Desire to increase utilization (i.e. you use it to show support/demand to encourage additional growth). Only #2 has the potential of being the basis for a L2 commercial enterprise and that will be eroded quickly as vehicle range increases.
High speed (DCQC or whatever comes after) charging options do have potential for road trips as 'charge at home' is not really an option if you are driving across the country. But folks who need to travel across the country are unlikely to be willing to spend more time charging than driving. If I 'burn' 20kWh an hour (driving 75mph in Leaf is about this wouldn't you agree?) implies that I need to charge at least at 20kW in order to have equal driving/charging. Now, what is the drive/stop ratio that folks are willing to have on a long trip? When driving my ICE I generally plan to stop every 3-4 hours and expect that stop to be about 30-45 minutes. So going with shortest time that would be 3hrs (60kWh) of driving with 30 minutes stop (approx 120kW charging rate). Hmm... Guess we still need some maturation of the tech to do that (or battery swaps...).
Don't need a research report to predict that trend eh?
adric22
Well-known member
There is, of course, another unknown phenomenon. I think we're seeing the early beginning for an explosion of short-range PHEVs in the market. And with falling battery prices and weight, I hope to see a day soon where the traditional hybrid disappears completely in favor of PHEV simply because there will be very little cost difference to build one. All of these 20-mile PHEVs are going to want to be recharging as much as possible, especially when gas prices go back up to $4 per gallon or more.
desiv
Well-known member
I think most consumers will pay more..Slow1 said:
We understand that it costs money to provide that service, and we're willing to pay for that if it's fairly convenient or really needed.
Now, with the 200 mile BEVs, the "needed" part will probably be decreasing..
But if it's convenienct and not too expensive, I still see it happening.
But it can't be TOO expensive.. If it's more expensive than I pay for electric during the day, OK; but when it's more expensive than gas, that's a problem. ;-)
desiv
Slow1
Well-known member
desiv said:
IF you had sufficient range for all your driving (with comfortable margin for error) in a day would you choose to pay more than home charging rates to charge during the day? If you are, please explain why as I just can't grasp why anyone would want to plan to do this. I get it when your range is tight - but I anticipate that once BEV have 200mile (real) range that will be a rare thing for the vast majority of folks.
Slow1
Well-known member
adric22 said:
Hmm... perhaps so - if the next best alternative is gas I can see paying a bit more to charge somewhere than I would at home. Then this is only considering cost as motivation; convenience comes to play too. How many of these plug-in hybrids are not even charging at home?
minispeed
Well-known member
Slow1 said:
Yes but tech aside what's going to be the demand for that? How often do you do it or does anyone you know do it? The people who do it most frequently are probably going to a second home or a family members home in which case they will have the option for home charging at each end of their trip. The second most frequent group will probably be using business hotels and we have already seen a lot of them adopt charging that can give a full charge over night. Driving down the price of tech requires an increasing, or at least steady demand to keep paying into the service to reward investment by the companies.
adric22 said:
Eventually I think the PHEV will become what the leaf is now on electricity, or maybe up to 150 miles and then the ICE, or even fuel cell. It won't be a question of which is best for the family car but what ever fuel is adopted (or retained) by the trucking industry will probably come out on top. Any refueling option that relies solely on personal vehicles exceeding a normal daily drive will have such small demand that it won't be able to make money.
If every BEV generation doubles the range of the previous one when the % of new EVs doubles due to the new generation the need for public charging will only increase by a small fraction of people who would have needed more than 2 full charges on the old generation. As the range gets higher and higher the percentage of people who exceed that will keep getting smaller and smaller. By about the 3rd to 4th generation of BEVs will we see the 1st gen start to drop off and become extinct, or only kept by frugal people who find it fits their needs (ie drive 10 miles a day) and never ever need public charging.
The numbers will look something like this, only my estimates. from Wikipedia http://en.wikipedia.org/wiki/Plug-in_electric_vehicles_in_the_United_States
"The fleet of plug-in electric vehicles in the United States is the largest in the world, with a 43% share of global sales as of September 2014. Since 2008, about 260,000"
so current plug ins
260,000, public charging needs per year X
Gen 2 BEVs come out, double range, we get up to 520,000 BEVs current charge needs 1.15*X
Gen 3 BEVs come out, double Gen 2 range, we get up to 1,400,000 BEVs current charge needs 1.10(1.15*X)
Gen 4 BEVs come out, double Gen 3 range (probably where range starts to level off) but Gen 1 cars are being scrapped, current chage needs {1.05(1.10(1.15*X)} - X
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