In a recent Driving.ca article titled “EV-Charging Industry is Doing Everything Except Making Money,” author David R. Baker makes a compelling argument that the EV infrastructure sector is a revenue desert, essentially incapable of generating enough cash flow to sustain profitability due to a lack of interest from motorists. “The dilemma boils down to demand,” he states, before adding that “lots of people still driving gasoline-powered cars won’t consider going electric until they see charging stations widely deployed.”
In many ways, he’s right. As of 2020, market share of EVs in the US stood at less than 2%. And while this is nearly triple what it was just five years prior, it still accounts for a small overall number of vehicles on American roads. Things like range anxiety and lack of available chargers have oft been cited by consumers as the top reasons for avoiding electric. The article goes on to share a number of facts and quotes from industry insiders that seem to back up the idea that the sector is operating in a sort of economic penumbra, with only minor bright spots in an otherwise shadowy fiscal wasteland.
The biggest claim is the lynchpin of the entire piece. “So far, none of the companies that deploy [charging] equipment has figured out how to make a profit,” Baker says in his opening salvo. This is where we beg to differ. Perhaps many of the companies interviewed have not yet established profitability, but we were able to achieve that milestone in our second year of operation thanks to a redefined business model, which, while acknowledging most of the facts Baker outlined therein, disputes the underlying premise to which they refer. Here are a few ways EVCS does car charging differently.
1.) Public/Private Partnerships
We treat municipalities and government agencies (think DOTs) like clients rather than mere regulatory bodies. Just like any private contractor performing work for the state, much of our funding comes from forward-thinking governments that see electric car charging as a way to increase local business and create cleaner air. This attracts new eco-conscious shoppers and residents, resulting in greater tax revenue. We have excelled at identifying myriad sources of state and federal funding dedicated to charger installation, which makes private property owners more inclined to become site hosts, thereby completing the triangular nature of our turnkey solution.
2.) Staying Lean
Our organization has managed to minimize many of the internal expenses that often weigh on balance sheets. Our CEO’s past experience in the space with Green Commuter has allowed for many valuable lessons in running a lean, efficient operation, and our CFO brings a wealth of knowledge in finance and accounting, particularly as it relates to start-ups. We have been able to outsource much of the cost-intensive work that indebts other organizations, like hardware manufacturing and the development of networking software, while using SaaS and other tech solutions to streamline internal processes.
Photo by Ivan Radic
3.) A New Business Model
While EV drivers are our ultimate focus, our business model begins with a B2B solution. We offer property owners a brand-new revenue stream with no upfront cost to them. We handle the site assessments, permitting, trenching, electrical work, installation and maintenance, while splitting each sale with the site hosts. However, unlike competitors, we don’t make or own chargers, which eliminates the costly endeavor of maintaining inventory. Nor do we “sell” charging stations, which involves massive sales efforts to convince reluctant business owners with already slim profit margins to invest in something that seems speculative, and offers no profit participation from charging.
4.) Measured Scaling
Many companies grew too big too fast. We started where the business was – namely California, with modest roll-outs in Oregon and Washington. Our approach is to drive innovation in the sector, but also to take a measured approach to scaling by gradually expanding in key markets. With President Biden’s new infrastructure package and numerous states like Colorado and Massachusetts exploring state-mandated transitions to electric, we’ll be prepared to more rapidly scale into new cities and states using our unique and cost-effective turnkey solutions, lean operating philosophy and extensive knowledge of government funding sources.
We hear a lot about the desire for carbon neutrality these days, and while that’s noble indeed, we at EVCS have set our sights on even loftier goals. Our mission is to become carbon negative, meaning not only have we reduced carbon emissions to negligible levels, but we have offset more carbon than we contribute to the environment through techniques like avoidance, sequestration and carbon capture.
EVCS Subscription Model Unique Among Industry Peers
Americans today want the following from the products and services they use: 1) freedom; 2) convenience; 3) simplicity; and 4) value. Let’s face it, we’re constantly being inundated by an increasing barrage of choices in just about everything, from the media we consume to how we interface with co-workers to the way we get our groceries. Options that rise to the top are those that offer the clearest and cleanest solutions for the lowest costs.
A Barrage of New EV Models Requires More Infrastructure
According to a recent article in Forbes, Americans will purchase approximately two million EVs in 2022. Dr. Shelley Francis, co-founder, and director of EVHybridNoire notes that demand is increasing “as public perception of the technology shifts from novelty to mainstream,” thanks primarily to the plethora of new EV models hitting the market and a rapid expansion of infrastructure spearheaded by fast-charging network operators like EVCS.
Two thousand twenty-one saw a plethora of advancements in the electric mobility space, from a record number of charging installations to innovative new EV models hitting the market to progressive climate legislation that is spurring the sea change away from pollutant-emitting ICEs. Amidst all this, the EVCS team once again looks back at the last 12 months to take stock of our own unique achievements in advancing the goal of a cleaner future.
POP QUIZ: How much do you know about EV infrastructure?
With so much misinformation out there about EVs and the infrastructure that supports them, we thought we might try something different: a little multiple-choice quiz to test your knowledge on the subject. Some of the answers might prove surprising.
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