Elec­tric ve­hi­cle charg­ing sta­tions set to take off

In­vestors con­vinced sec­tor is poised for a break­through

Calgary Herald - - FRONT PAGE - LAURA MILLAN LOMBRANA and RACHEL MORISON

The elec­tric ve­hi­cle sec­tor has been stuck for years with a chicken-and-egg prob­lem. Un­til there were ex­ten­sive net­works of pub­lic charg­ing sta­tions, a crit­i­cal mass of peo­ple would never feel com­fort­able driv­ing EVS — but un­til a crit­i­cal mass of peo­ple were driv­ing EVS, there was no sense in in­vest­ing in ex­ten­sive net­works of pub­lic charg­ing sta­tions.

It may be the coro­n­avirus pan­demic that fi­nally breaks the stale­mate. Bloombergn­ef’s lat­est Longterm Elec­tric Ve­hi­cle Out­look pre­dicts that EV sales will ex­pe­ri­ence a smaller dip than tra­di­tional auto sales as a re­sult of the broader eco­nomic squeeze, and that they’ll bounce back more quickly once the mar­ket re­cov­ers. EVS and the in­fra­struc­ture needed to charge them have also been a part of many of the stim­u­lus pack­ages an­nounced by Euro­pean and Asian gov­ern­ments. Just in the past few weeks, Ger­many in­cluded charg­ers in its 2.5 bil­lion eu­ros pro­posed eco­nomic pack­age, and the Euro­pean Union an­nounced that it’s aim­ing to have 1 mil­lion pub­lic charg­ers by 2025, from fewer than 200,000 to­day.

“There’s ab­so­lutely a case for ve­hi­cle charg­ing in­fra­struc­ture to be part of the re­cov­ery,” says Matt Allen, chief ex­ec­u­tive of­fi­cer at Pivot Power, a U.K. bat­tery and charg­ing de­vel­oper. Fast charg­ers de­mand large amounts of power in one lo­ca­tion and the in­stal­la­tion is dif­fi­cult and ex­pen­sive, he says. Gov­ern­ment in­vest­ment could help com­pa­nies clear that hur­dle, cre­ate much-needed jobs, and give the econ­omy a fur­ther boost as the EV sec­tor ex­pands.

“It will make smaller, more niche projects more in­vestable be­cause more EVS driv­ing around mean a big­ger cus­tomer base,” Allen says, adding: “We want stim­u­lus, not a long-term crutch for the in­dus­try.”

The key is to get driv­ers past the so-called anx­i­ety range, or the fear of run­ning out of bat­tery life and wind­ing up stranded on the road. Un­til re­cently, how­ever, that wasn’t a chal­lenge any­one par­tic­u­larly wanted to take on, says Javier Guerra, a man­ag­ing part­ner at pri­vate eq­uity firm Satif Group and an early in­vestor in Cal­i­for­nia plug-in ven­ture Charge­point. Car­mak­ers had no in­cen­tive to build charg­ers other brands could profit from (Tesla Inc.’s charg­ers, for in­stance, only fit its own cars and are mainly de­signed for home use), while util­i­ties, oil com­pa­nies, and in­sti­tu­tional in­vestors con­sid­ered the sec­tor to be too young, too risky, or both.

“When I started to look at (EV charg­ing) back in 2016, very few peo­ple saw the point, and there was lit­tle money to be made,” Guerra says. Since then, the cost of EV bat­ter­ies has de­clined by 43 per cent, ac­cord­ing to BNEF, mak­ing EVS much more ac­ces­si­ble for the av­er­age car-buyer. That, to­gether with stricter emis­sions reg­u­la­tions in Europe and China, has con­vinced large in­vestors that EVS are poised for a break­through.

Oil com­pa­nies and util­i­ties es­pe­cially are well po­si­tioned to dom­i­nate the EV charg­ing mar­ket. Oil sup­pli­ers al­ready op­er­ate strate­gi­cally lo­cated fu­elling sta­tions for in­ter­nal com­bus­tion ve­hi­cles, and util­i­ties con­trol elec­tric­ity pro­duc­tion and dis­tri­bu­tion net­works.

“I don’t think there are clear win­ners yet,” says Alek­san­dra O’dono­van, head of elec­tric ve­hi­cles at Bloombergn­ef. “Oil ma­jors in­vest in EV charg­ing ei­ther be­cause they can or must as it is man­dated, and they can af­ford to hedge on the fu­ture.”

Based on its es­ti­mates for EV adop­tion over the next 20 years, BNEF projects that 12 mil­lion pub­lic EV charg­ing points will be needed glob­ally by 2040, up from fewer than 1 mil­lion to­day. That will re­quire a world­wide in­vest­ment of about US$111 bil­lion.

Oil ma­jors and util­i­ties have rushed into the sec­tor, start­ing with Royal Dutch Shell Plc, which bought charg­ing net­work New­mo­tion in 2017; the com­pany now owns or op­er­ates 142,000 charg­ers across Europe, and en­tered the U.S. mar­ket last year with the pur­chase of in­fra­struc­ture and soft­ware provider Green­lots. Ri­val BP Plc, mean­while, ac­quired Charge­mas­ter and its 7,000 sta­tions for US$170 mil­lion in 2018.

Util­i­ties see the elec­tri­fi­ca­tion of trans­port as a po­ten­tial saviour. Global elec­tric­ity con­sump­tion is ex­pected to slow as in­dus­tries and ap­pli­ances be­come more en­ergy ef­fi­cient, but EVS could help prop up res­i­den­tial de­mand.

“As an elec­tric ve­hi­cle user you don’t need to go to a petrol sta­tion any­more — you leave your house fully charged. It’s a com­pletely dif­fer­ent con­cept,” says Luis Buil, global head of smart mo­bil­ity at Spain’s Iber­drola SA. “We’re al­ready in the grid and we can guar­an­tee that the power you charge your car with is 100 per cent re­new­able.”

Iber­drola an­nounced in March that it would ac­cel­er­ate plans to spend 150 mil­lion eu­ros (US$170 mil­lion) on its own fast charg­ing net­work. And French util­ity EDF, which al­ready owned more than 100,000 charg­ing points across Europe through its sub­sidiary Izivia, ac­quired a ma­jor­ity stake in Pod Point in Fe­bru­ary, which has more than 69,000 charge points in the U.K. and Nor­way.

The holy grail charger for au­tomak­ers, oil com­pa­nies, and util­i­ties doesn’t re­quire a grid con­nec­tion at all. Shell and Tesla, among oth­ers, are work­ing to­ward build­ing a mini-power sta­tion with so­lar pan­els that can gen­er­ate and store enough en­ergy to pro­vide a con­sis­tent source of charge. If, or when, avail­able com­mer­cially, it would make elec­tric ve­hi­cles and charg­ing in­fra­struc­ture fully green.

MICHELE TANTUSSI/GETTY IM­AGES/FILES

Elec­tric ve­hi­cles and the in­fra­struc­ture needed to charge them have been a part of many of the stim­u­lus pack­ages an­nounced by Euro­pean and Asian gov­ern­ments. EV sales are ex­pected to bounce back faster than sales of tra­di­tional ve­hi­cles.

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