What changes can we expect in the electric vehicle (EV) charging market as a result of our rapidly changing world? What are the key accelerants of EV adoption doing forward? What risks and opportunities do COVID-19, declining oil prices and other external factors pose for the industry?
On May 7, 2020, we had the privilege of bringing together several industry experts for a live webinar discussion on how electric vehicle charging infrastructure stakeholders are responding to current market conditions. Our panel included perspectives from utilities, EV charging networks, energy management firms and software enablers.
The webinar was moderated by Energize Partner Katie McClain and featured the following participants:
Below is a summary highlighting excerpts from our Q&A-guided conversation. You can view the full recording here.
Q: What are some of the major trends that you think that we’re going to see in electric mobility this year? What do you see changing as a result of this COVID-19 pandemic that we’re in right now, both in the short-term but then also in the long-term?
Abdellah (Volta): The response to COVID-19 is an interesting one. I’ve seen dollars being sucked out of the room from public funding of electric mobility projects towards pandemic response and putting people back to work. A lot of [electric mobility] companies are relying on public funds to actually make a business case. At Volta, to date we have not taken a single public dollar except for carbon credits. I would like to open that to all of the industry, actually. We have thousands of shovel-ready projects that can put a lot people back to work. It’s infrastructure, it’s capital-intensive, but all of these projects still will allow us to actually come out of this crisis swinging out off the bat.
Tilak (Eversource): We are a utility, so I’ll give you the long view. Back in my office, I’ve got a stash of rate cards from the 1920s representing milestones for companies like Cambridge Electric and Boston Edison. That was us 100 years ago — when the country was in the throes of electrification. I’m sure at that time, people were thinking about the impact of Spanish flu, the First World War, the Big Depression, and similar things. In the long run, I think what we are dealing with here is a secular trend — a new trend around electrification of transportation. We certainly could see some short-term cash flow impacts and slow-downs, but the longer-term trend towards electrification of mobility is here to stay. Now is the time to be investing in the infrastructure to support that.
Michael (ChargePoint): As we look at it, COVID, and even the oil and gas prices these days that are so low, are blips that we’ll get past. While we’re seeing a shift in the buyers and who’s prioritizing it, the migration at a macro level to electric transportation doesn’t seem to be slowing down. Although certain industries are hit a bit harder than others, utility programs continue to roll, electrical contractors are eager to go to work, and fleet really has taken off. I think there is a big opportunity here for creating programs to enable electric transportation. For instance, electrifying fleets is taking a higher priority as none of us can leave our homes and are dependent on delivery. You can imagine how much better that would be if it was all electric.
Giuseppe (Sitetracker): On our side, there’s growing conviction in the volumes that are about to hit this industry, and we’re seeing that drive investment into how the work gets done and how organizations modernize operations. What’s keeping us busy is working with all the different players in this industry to map out how they’re going to deploy that next level of volume. Related to the current environment, in some areas, construction is not an option. In others, work can still get done. People are trying to work very smart during this period because there’s this strong belief that at some point, things will get back to normal and they want to maintain their teams and come out of this working in a bit more modern way. We’re working with folks to design how they’re going to prepare for what’s next, manage their contractors, and essentially reduce their dollar per deployment and build bigger networks.
Q: There are a number of external factors affecting the EV market right now. We talked a little bit about the declining price of oil and then there’s the OEM financial situation. From your experience, what’s the best way to navigate some of these challenges?
Tilak: Focus on the basics: We need to scale. For starters, we need more electric vehicles. All the charging infrastructure in the world doesn’t do you any good if you don’t have the vehicle. As for the charging infrastructure, the basics are getting more charging ports deployed. How do we do that? It starts with education of the customers and the site hosts. It’s about putting in place the supply chain to sell, install and maintain them — at scale. We’ve all been trained to come up with business cases that are down to the unit level saying, “Am I going to make money on this particular charging station by putting it here?” Right now, that’s hard case to make in and of itself on a standalone basis. There’s a lot of talk about vehicle-to-grid, but we’re focused on getting the basics down first.
Michael: I would say much the same as Tilak. Let’s get the vehicles out there. If cars are available to buy that people like or, in the fleet space, if light- and medium-duty trucks are available, [electrification] is going to happen. That’s the first and highest priority. Another thing that’s becoming increasingly important through these shifts is choosing the right partners. Finding a partner that is stable and can fill enough of your gaps is key. This is a long-term game, but having that vision is not easy for the electrical contractor who’s trying to employees and rent on cash flow. Being mindful of those folks is also important along the way.
Q: What do you believe are the key accelerants that for EV adoption in the U.S. going forward?
Tilak: A theme for us is creating charging products that match the consumers’ dwell time. Residential charging is an important one, given that 80% of charging happens at home. As a utility, we spend a lot of time thinking about that and its impact on the distribution grid. But workplace and destination charging are equally important pieces of the equation. The second thing I’d emphasize is light and medium-duty vehicles and fleets for commercial purposes and municipalities because the heavy commercial or mid-sized commercial EVs are not yet available at scale.
Michael: There are three areas I see making a big difference: policy, grants and utility. Regulators approving utility programs and ensuring grant programs continue will make a big difference. Enabling the right to charge in a multifamily dwelling, particularly as we’re all living at home, is especially important right now. For example, Chicago just passed a law that says any new construction requires 20% EV-ready spots. On the policy side, things like that will drive adoption in a real way. Grant utility programs are also a contributing factor. The programs we see working really well provide value for the utility, the customer and the site host so that everyone wins. We spend a lot of time with utilities helping them design and shape these programs that really work. Lastly, I can’t help but go back to the car example. If there were cars to buy for less than $30,000 that were awesome, people would buy them. In fact, infrastructure is not the problem. If there were great cars, infrastructure would solve itself. But there are simply not enough of these great cars out there.
Giuseppe: We think there’s a great opportunity to make it easier to deploy. The permitting complexity, if you’re trying to deploy a national network of chargers, is quite crazy. If you’re also trying to get them energized, then managing the passing of baton and the whole process is difficult. If everyone focuses on the operations and getting turnaround times down on the piece they own, the infrastructure will come on faster, and that will really benefit the entire industry. The broader theme is simplification as it relates to permitting and interconnections to make it easier to deploy for the folks doing the work.
Q: Generally, what are you most excited about when you think about the future of mobility and EVs?
Michael: Frankly, I’m excited about conversations like this — where the awareness is broad, where you have utilities, charging companies, and folks like Sitetracker that make a difference in getting [infrastructure] in the ground, all come together. We see beyond [this pandemic], and we’re all committed to making the experience better for everyone. More specifically, I’m excited about awareness, enlightenment and availability. This market is different than it was a year ago — people are recognizing what’s coming. Growing awareness is key if we’re going to go from 2% [EV adoption] to 80% over a 30-year horizon. Along with awareness comes enlightenment — people understand it’s not as simple as putting a plug in the ground and calling it a day, but you actually have to manage the load. Then I think someday I’ll be excited about availability — of vehicles, trucks, fleets. There are some great models out there now and I am excited that there are more coming. To sum it up, I think the awareness and the enlightenment are there now, and getting better every day, and the availability piece will drive it all.
Tilak: As a utility, I think we play a really important role in scaling [charging infrastructure] from both a technical and economic standpoint. We recognize it’s not just about increasing the size of the base infrastructure, we also must manage load growth. Utilities know how to do that, and have many of load management and demand management mechanisms in place that will be vital in helping scale.
Giuseppe: What we’re most excited about is seeing our partners get more efficient as they’re operating, allowing them to find that next level of productivity and build bigger networks. We’re seeing people taking the time to move into scaling mode, and that’s what we really enjoy partnering with them on. In general we are excited by the volume [of projects] coming in, building bigger and better networks, and ultimately helping [our customers] do things faster and more efficiently.
Abdellah: For us and for the whole EV charging industry, I’m excited about this new fueling infrastructure we’re building. At Volta, we focus on how to use data to build [the infrastructure] better for utilization. For us it’s about providing an amenity and working with real estate partners to get there. Altogether, we can do something quite amazing, which is showing that fueling infrastructure is not a fueling retail place, but an amenity that provides ancillary services. Our business model essentially allows such utilization and load that it creates value right away for stakeholders.
Have a burning question we didn’t get answered during our panel? We’ll tackle those in our next blog post, so stay tuned!