Electric Vehicle Charging is New, But the Business Basics Apply
Installing electric vehicle chargers should be like any other business system you add to your operation, but many providers don’t see it that way yet. Many EV charging providers try to lock site owners into restrictive ecosystems or walled gardens. If you don’t let your accounting software provider prescribe where you bank, why should EV charging be any different? The walled garden approach neither promotes the use nor supports the long-term health of the business of providing electricity as a fuel.
Entrepreneurs invest in EV chargers to earn a return by either taking a fee for charging EVs, taking a fee for the parking space, increasing retail traffic in the form of charging incentives, or some derivative or combination of these models. EV charging stations can be owned by anyone and installed practically anywhere with utility power. Unlike traditional fueling stations, EV charge stations are often standalone devices in unattended parking lots. This means that an EV driver confronted with a defective public charge station must make a call to a 24-hour support line, instead of walking over to a station attendant. The customer support line will most likely resolve the issue, but the station’s reputation can take a temporary hit.
The EV market is still small enough for some of its participants to get away with merely ‘making it work,’ and it is essential to understand that, unlike traditional gas pumps, EV charging is almost entirely driven by software. As a result, the quality and sophistication of the software running charge stations and their networks will determine whose investments in EV charging today will pay off in the future. Connecting software-driven devices to a central management network is a natural evolution of all IoT (internet of things) devices, and the second-order benefits for charging site hosts are profound. Smart, connected charge stations allow site hosts to take EV charging from a lowly amenity to a sophisticated and scalable business opportunity.
With the exception of dedicated modems for credit card readers, the earliest charge stations did not have internet connections. Even if stations were later retrofitted with data communications, they could not provide detailed error reports over the network. This means site owners might not know there is a problem until they study the monthly electric bill or a charger revenue statement. Once an issue is identified, the owner of a non-connected station faces the cumbersome process of arranging repairs and spending time rehabilitating the station’s reputation on EV charging apps. Modern, networked charge stations protect site hosts from these business interruptions.
Newer charge stations with full-time internet connections can report whether they are operational, how often and how long customers are charging, and send rudimentary error reports. Most connected charge stations can also let EV charging smartphone apps know if a station is currently in use. These are massive improvements, but station owners still face the repair challenges of non-connected charge stations.
If you own a handful of charge stations to see if they’ll make a viable side business, maintenance and ensuring up-time are an annoyance. However, a national chain with several types of chargers in each of its 300 locations around the country quickly risks its investment and reputation if chargers don’t perform. At this scale, one of the big, popular EV charging providers is usually involved. These companies prescribe which chargers you can buy, and they own and operate the back-end charging network. If you think you will always be agreeable to whatever changes the provider makes to their system or pricing, and you never price-shop outside of the prescribed hardware list, the walled garden arrangement might work for you. With most premium brand EV charging providers today, the tradeoff for a network that works is accepting dependence on a single vendor, in perpetuity. The walled garden approach is bad for site owners and stunts the evolution of electricity as a mainstream transportation fuel.
Site owners who view their charging offerings like a business look past the logo stickers and modern industrial design of charge stations and try to understand if the entire system is manageable and flexible enough for them. Just like when choosing accounting software, they ask questions about how the system will serve their business. Questions could include:
Do we maintain control of the asset?
Which combination of hardware and software gives the business the most flexibility?
Are the assets still manageable in large numbers, once the novelty wears off?
Is the back-end system smart enough to provide actionable insights about chargers to help us make better business decisions?
Is the system sufficiently open and accessible to tie into our existing business systems?
Will this system add value without adding more overhead than promised?
The decisions around how one builds a revenue stream from EV charging will be with the company for as long as you own or operate the chargers. If at loggerheads with a walled garden provider, do you double down on the investment and switch network providers and hardware or stop offering charging altogether? Will changing or removing the chargers that EV drivers have come to expect be more or less damaging to the brand than chargers that are out of service? A fleet of ‘problematic’ EV chargers can easily crush ROI and may even make selling the business that owns the chargers more complicated.
Forward-thinking site owners and entrepreneurs will look for a company that provides more than a prescribed hardware list, a referral to an installation service, and a slick online dashboard; they investigate the claims made in glossy sales brochures.
The number of electric vehicles will keep growing, and so will the charging infrastructure that fuels them. The same is true of the business opportunities around EV fueling. The right EV charging management platform can give entrepreneurs confidence in the long-term viability of the investment. Business people and entrepreneurs should take the time to evaluate charging offerings like they would any other business system: do the homework, kick the tires, ask tough questions, and plan for the long-term.
Byline attribution: Raj Jhaveri, Senior Director of Product & Technology, EV Connect, Inc.
Raj Jhaveri is currently a technologist and investor in the clean energy sector, primarily focused on Electric Vehicle charging infrastructure and energy management innovation. Before becoming the Senior Director of Product & Technology at EV Connect, he was a serial technologist in the healthcare industry. He worked on artificial intelligence applications in healthcare and was the Chief Technology Officer for several companies. He was also previously an in-house mentor at TechStars, an industry consultant for General Catalyst Partners, and an advisor for IBM Watson Health’s Oncology Project. He obtained his Bachelor’s in Mathematics and Biology at The Ohio State University and continued his graduate studies at Harvard Medical School and Massachusetts Institute of Technology.