Should EV OEMs own charging stations?

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• NEW: Glossary of EV Terms

• Should EV OEMs own charging stations?

• Share Electric Avenue & Get Rewarded!

• 2 Links

• Meme of the week

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NEW: Glossary of EV Terms

Ever wondered what those nerds on LinkedIn talk about when they use terms like V2G, TSO, and POPO? Ok, we made that last one up. But the other two are real and they´re now explained in our newly created Electric Avenue Glossary. This is a living post where we'll add new acronyms anytime we define or use them. Feel free to check them out, and look out for that hidden bonus meme 😉

Should EV OEMs own charging stations?

CES 2023 is the most influential tech event in the world and takes place every January in Las Vegas. Originally CES focused on consumer electronics like TVs, but nowadays car manufacturers often make big announcements at this event too.

This time, Mercedes-Benz announced building their own fast charging network in the US. The capital investment for this Mercedes-branded network will be split 50/50 between Mercedes and renewable energy provider MN8, with Chargepoint providing its hardware and software to the network. The planned 400 charging hubs will be equipped with at least 4 DC chargers per site, each capable of up to 350kW. Mercedes-Benz drivers will receive preferred charging access via reservation and Plug & Charge features, but the hubs will be open to  EV drivers of all brands.

We want to take this announcements as an occasion to ask ourselves the question - What are the PROs and CONs of Automakers owning charging networks?

To start, we have summarized where OEMs are shareholders or have made investments in fast-charging infrastructure providers in the image below. Initially, the EV pioneer Tesla created its Supercharger Network to allow long-distance trips as there wasn't any fast charging infrastructure at the time. Nowadays, other newcomers like NIO and Rivian have embraced a self-owned charging network as part of their strategy. But also traditional OEMs have identified fast charging infrastructure as a piece of the puzzle to sell EVs. The best-known example is IONITY in Europe where several traditional OEMs have partnered up to make investments. In the US, there is Electrify America (EA) owned by Volkswagen Group. The $2B investment in EA was negotiated with governmental institutions (EPA and CARB) as part of the penalty payments for Volkswagen`s diesel emission scandal.

PROs for owning fast-charging infrastructure

• Brand loyalty - Allows OEMs to have customers repeatedly interact with their brand and increase loyalty when offering a superior fast charging experience - especially relevant for premium manufacturers (see Tesla`s network)

• Insights - OEM`s can get first-hand learnings on the technical challenges of public fast charging.

• Setting the goalposts - Owned charging networks enable OEMs to set the standard in terms of charging user experience and features. Best examples are IONITY and Electrify America being the first (and for a while the only) networks supporting Plug&Charge payments. Another example is Mercedes announcing that its new network will support charging station reservation - a feature which OEMs have long wanted, but 3rd party charge point operators where hesitant to implement.

• Future competence - We believe in a future where autonomous and electrified fleets dominate our roads. In this version of the future OEMs will want to become mobility service providers (selling miles/trips, not just "vehicle hardware"). Charging will be a core competence required to operate autonomous fleets with high uptime successfully.

• Testbed - For OEMs venturing into starting stationary battery storage systems, it offers the opportunity to be the "first and best" customer for their products. Public fast-charging sites can benefit from utilizing onsite battery storage capacities to reduce grid demand charges and increase energy usage from renewable sources like onsite solar.

CON's - what holds OEMs back or where they might fail

• Investment - Fast charging is a capital-intensive, asset-heavy business that requires long-term planning (we`re talking about 15+ years minimum). Startup OEMs might struggle to finance these investments with the cash on their balance sheet. And even for traditional OEMs the financial planning cycles are much shorter than 15 years. They are not set up to think on the time horizons of infrastructure companies (think: electric utilities or oil businesses).

• Upkeep - Ongoing operations & maintenance of critical infrastructure like a charging network require a mindset shift and new competencies at OEMs. Historically, OEMs are used to focusing on vehicle R&D, with decentralized operations and maintenance activities being handled by independent dealers.

2 Links 🔗

• HERE availability forecast: HERE is a significant provider of mapping and navigation services to Automakers. The "Big 3" OEMs of Germany all have stakes in HERE: BMW, Mercedes, and VW Group (via Audi). But HERE`s business is being threatened by the increasing inroads of Google Maps into the Automotive mapping space. Vehicles like the Polestar 2, Volvo`s EVs, and the GMC Hummer EV use Google Maps as their native navigation provider. One way to compete for HERE could be better EV-related features. To this point, HERE just announced at CES a new feature that will use Machine Learning to predict the likelihood that a charge point will be available by the time a driver arrives.

• FIBP installer review: A couple of weeks ago, we reported that Ford and Sunrun had finally released pricing for their Intelligent Backup Power kit and the corresponding installation manuals. We have yet to see a video of a real-world customer with the full system in operation. BUT, the system seems to be available and is getting installed across the US. Youtube channel "Solargoat" just published a first-hand account of their experience putting the system together as an independent installer (not part of the Sunrun installer network).  

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