The electric mobility transition isn’t coming, it’s here. Electric vehicles (EVs) are moving from rare sightings to regulars on our streets – from the hills of California to the suburbs of Dallas. And while we recognize the familiar headlights, there’s an invisible component of EVs and charging infrastructure that is crucial for delivering the transformative potential of EVs: software.
In the first half of 2023, EV sales in the U.S. accounted for more than 7% of overall new vehicle sales, with all-time sales exceeding 3 million vehicles. And unlike the generation of gasoline-powered cars that came before them, EVs are coming into the world as “digital-native” mobility assets — roughly 97% of all EVs are internet-connected cars. This unlocks an exciting range of use cases and applications, from autopilot to smart charging. It also means that charging infrastructure to power these vehicles will need to be software-enabled to fully deliver the modern experience we demand from the electric fleet. Today, a single software solution might be supporting over 100,000 charge points coming online.
We’re at a pivotal point in the EV transition. The federal government is encouraging electrification through both sticks and carrots, automakers are introducing state-of-the-art new vehicles across a range of buyer needs, and high-profile electric mobility partnerships are taking off.
These advances have been welcome developments for the Energize team, as we’ve studied the electric mobility space closely, especially EV charging. We are sharing a subset of our EV Charging Deep Dive – a collection of our proprietary research which has helped guide our investment in the space – for the first time publicly below. The Deep Dive includes our assessment of the current sticking points and market forces driving software investment opportunities across the EV charging ecosystem. Simplified, our current thesis around EV charging is this: Software is essential for enabling the EV transition because these tools can reduce soft costs in asset deployment and management and modernize the user experience, making EVs attractive for players throughout the ecosystem.
We have a generational opportunity ahead, but to make EVs viable for drivers, installers, charge point owners and fleet managers, we need software solutions to address the industry’s leading challenges. For example:
Range anxiety is still preventing some of today’s consumers from making the switch to EVs. Drivers want to be able to easily reserve a charging station remotely without fear of charge point error or dysfunction. Making EV charging stations ubiquitous requires hardware, but that’s not enough to ensure those chargers are available when the time comes for drivers to charge on the road. Deploying more charging infrastructure will be meaningless unless it can be managed dynamically and utilized effectively. We need software for that.
- For example: Smartcar’s API platform allows EV drivers to monitor and control their charging experiences, including finding nearby stations, estimating charging times and monitoring charging progress.
EV infrastructure profitability starts with optimizing charger location through site selection and surveying as well as minimizing installation costs from engineering, design, permitting and construction. These “soft costs” currently account for more than 80% of the total EV infrastructure cost thanks to analog, complex installation workflows and inefficient permitting processes. For EV infrastructure businesses to be feasible long term, they must be able deploy charging stations more intelligently. Beyond costs, each charger’s profitability can be enhanced by setting optimal pricing, managing power load, opening the network to additional drivers, and reducing operations and maintenance costs throughout the asset lifecycle. We need software for that.
- For example: Sitetracker’s deployment operations software allows charge point installers to standardize their workflow and begin generating revenue faster.
Today’s drivers want the experience of EV charging to be as seamless and consistent as pumping gas, regardless of the hardware, car model, payment type or “brand” on the electrons. But currently in the U.S., the primary cause for EV charging sessions to fail is payment function errors. In order to ensure the EV charging network works, we need to make EV charging infrastructure “smart” — allowing drivers to manage their charging sessions and digital transactions without fumbling around for loyalty cards and site owners to control pricing. We need software for that.
- For example: Monta’s hardware-agnostic software platform includes features that give site owners control over price setting and dynamic load balancing and that give EV drivers the ability to reserve charge points and pay via Apple Pay and other popular platforms.
Fleet managers have one of the hardest jobs in the electric mobility sector as they must manage and optimize numerous inputs, from their routes to their charging capacity. To make the decision to electrify their fleets and adopt entirely new infrastructure, they need to guarantee that critical functions run smoothly and consistently – and generate a positive ROI. Managing fleets means monitoring vehicle battery usage, optimizing charging activity, predicting maintenance, and planning vehicle routes and schedules around these factors. We need software for that.
- For example: TWAICE’s battery analytics software helps fleet managers manage batteries efficiently and increase their lifetime, ultimately increasing profitability.
Why stop there? EVs have a supercomputer brain — and we want to be able to interface with them in new, exciting ways. Today’s consumers expect to be able to control their driving experience, from optimizing charging sessions and monitoring their car’s battery performance to balancing their residential load and even acting as a backup power bank.
With the buildout of the EV charging network, we have an opportunity to design a system intelligently from the ground up. More software innovations are essential for establishing reliable EV charging infrastructure that is interoperable, resilient and future-proofed. We’re asking more from EV assets than we ever have before. But we can’t have nice things without software.
Want to learn more about Energize’s PoV on the EV charging market? We’re sharing our proprietary deep dive report publicly for the first time. View the report here.