The era of the electric vehicle (EV) has already begun, as seen by the new LEVC electric black taxi and the battery-powered buses that are presently rumbling through the streets of several cities. However, despite an increase in usage, the infrastructure for charging has failed to advance. How should potential investors handle the prospect of an EV charging grid?
How will the grid be used?
Uncertainty over policy direction as well as, and more significantly, timing is one reason investors have been hesitant up until now. While it is very obvious that EVs will soon replace gasoline and diesel vehicles, investing in the grid at this time poses several concerns. Which user demands need to be your priority? commercial taxi fleets, self-driving electric buses, or privately owned electric cars? Nobody wants to spend a lot of money creating “stranded assets” that aren’t in high demand.
This is why investors need to collaborate with local governments, energy networks, charging firms, and digital solution providers to understand consumer demands and create a business model that responds to the broader social objectives of cities.
Adapt infrastructure to meet demand
In order to size, scale, and shape the appropriate infrastructure, it will be essential to have knowledge of where the demand for EVs is coming from as well as how customers will utilize them.
Outside of the home charging paradigm, there are two other sorts of demand drivers that will create unique client acquisition possibilities and help to reduce investment risk:
The destination user is the first business model
The best locations to put up infrastructure and charging stations include airports, stations, parking lots, business parks, and large office buildings. In addition to offering a fleet of stand-by batteries to be used for balancing services and a level of guaranteed demand, these locations are also environments where users will naturally leave their vehicles long enough to fully recharge on fast charging points, opening up the possibility of higher revenue generation.
For instance, the tariff structure in this model can favor a flat fee that includes both the leasing of the infrastructure and the use of the area for parking (the charging point). These potential will be unlocked for investors by establishing agreements with important parties including transportation authorities, utilities, and other segments of the supply chain right now.
Model 2 of business: “the hub user”
Large fleets of specialized vehicles, such as taxis, buses, emergency services vehicles, and delivery vans, are used by many firms in cities. Through the installation of “charging hubs,” where fleet owners may recharge their cars at quick or ultra-quick charging stations, these represent potentially lucrative propositions for investors.
However, in the early stages, commercial fleet hubs offer a certain level of stability to investors and will aid in the creation of a supply chain. Eventually, we would anticipate that competitive forces will push all users to the most financially appealing charging point. In exchange for a minimum level of assured demand, tariffs might be designed to favor a reduction on the retail power price.
Developing a cooperative partnership with public sector data providers and utilities who have an interest in the development of the charging grid will be crucial since success depends on managing the intersection of controlling access to land, access to people, and access to power infrastructure.
What impact this will have on our cities
Our infographic on electric car charging illustrates how various business models may provide a range of convenient charging options to satisfy the demands of consumers.
The data makes the drivers clear.
In actuality, the EV revolution is occurring concurrently with a new wave of data-driven solutions that shed light on our travel preferences. This means that investors and potential owners of the charging infrastructure will be able to fine-tune their market proposition using data-driven insights based on how businesses structure their supply chains and logistics, as well as how actual people move through their cities, commute, and spend their free time.
The opportunity to define the market
By collaborating with cities, the government, and regulators to build new creative business and tariff solutions, for instance, a young and emerging market offers a wonderful chance to define market norms and customer expectations. However, in order to do this, it will be beneficial to form alliances and ties with organizations that can create, implement, and manage what is effectively a brand-new public mobility concept.