Commentary on EV Industry Profitability Claims

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.

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.

Baker’s entire article can be found here: https://driving.ca/auto-news/industry/ev-charging-industry-is-doing-everything-except-making-money

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“Who’s Saving the Planet?” Podcast Interviews Gustavo Occhiuzzo

EVCS co-founder and CEO Gustavo Occhiuzzo recently spoke on the “Who’s Saving the Planet?” podcast about the electric mobility revolution and what we as a company are doing to help realize a truly carbon-neutral future. During the conversation with hosts Anthony Noto and Jessica Miles, Occhiuzzo made several critical points that help listeners understand where we are now in that mission, the obstacles we face, what EVCS has done to overcome those obstacles, and what we can do better as a global community. Here are some of the most prescient points:

Installation of the Month (June 2021): Hyatt Place Riverside/Downtown

The ability to travel is something many of us take for granted. Our Interstate Highway System allows us to freely traverse state boundaries – to go wherever we choose whenever we choose – from the snow-capped Colorado Rockies to the soupy Everglade swamplands to the historic lighthouses of coastal New England. However, EV drivers are more acutely aware of their travel limitations because many areas of the country have yet to adopt pro-electric infrastructure policies, often leaving them with few ground-travel options other than ICE vehicles. We knew getting more Americans to embrace the electric revolution would require buy-in from the hospitality industry. As such, much of our focus has gone toward hotels that, by serving as site hosts for charging stations, can help kickstart that ubiquitous access required to convert many EV holdouts.

Wall Street Journal Piece Brings Up Questions… And We Answer

Stephen Wilmot’s recent article in the Wall Street Journal, “Investors Look for an EV Charge,” debates the merits of investing in EV infrastructure, admitting that while chargers likely make for better investments than cars, the sector still holds many potential pitfalls that should be considered before jumping in. While that may be true, many of the examples backing up this assertion cite the business models of the largest EV installers in the country while failing to consider what less visible but faster-growing companies like EVCS are doing to mitigate such risks. Below are a few quotes from the article and our thoughts on them, including how we’re different.

Installation of the Month (May 2021): LADOT Lot 656

The Los Angeles Department of Transportation (LADOT) notes on its website that ICE vehicles are one of the city’s top contributors to air pollution, accounting for 19% of all greenhouse gas emissions, before proclaiming, “We can do better… We’re investing in public transit, testing new technology, and adopting mobility innovations for a cleaner environment and brighter future.” At first, it might just sound like flowery rhetoric, but we can personally attest to that commitment. Starting in 2019, LADOT partnered with us to install DCFCs at 57 city-owned lots, with almost 30% of those installations now completed. This alliance has been integral in promoting our goal of zero-emission mobility in the City of Angels by facilitating greater access to infrastructure.

Addressing Pain Points in Creating EV Infrastructure

A recent GovTech.com article titled “How Biden Plans to Build 500 EV Charging Stations” discusses the President’s goals for creating a nationwide network of 500,000 such installations by 2030. While it does a smart job laying out many of the pain points we face in facilitating EV adoption, the mention of solutions was far less prevalent, and ones that were mentioned seemed speculative or tenuous. However, over the last three years, EVCS has already taken the lead in addressing many of these challenge areas, allowing us to dominate the installation market across the West Coast.