As electrical vehicles become more affordable, one of the biggest issues facing the industry is making the charging station market a profitable business. Once this segment becomes self-sustaining, without government or manufacturer's support, only then will free-market forces drive its coverage across Alberta and BC.
Public Charging Background
Most charging stations are located at owner's home and workplace. While most car trips in urban areas have a known distance, commuting from home to work is the most common use and usually less than 30 km.
A public charging station infrastructure is needed to allow for top-ups to give peace-of-mind and for extended trips.
An electric vehicle charging station with 8 units in Kelowna, BC offered free of charge by Tesla Motors.
Electric Vehicle Charging Stations - Business Models
Currently, there are six types of business models for charging stations and most are not currently profitable:
Government (municipal or provincial)- Taxpayer money is used to subsidize the installation and energy consumption of these stations.
It was mentioned on the CBC that these charge stations were a subsidy for 'the rich', since electric vehicles are currently out of financial reach for most people. However, public infrastructure in charging stations is required for all of society to understand how, why and when this new technology is being used.
As electrical consultants that design charge stations, it's important to know who will be building and operating these stations and to understand how this new technology is integrating into Canadian society.
This analysis, which will take years to complete, will vary from location to location as well as with the changing demographics of Canada.
Manufacturers- Manufacturers of charging stations are in a chicken-and-egg dilemma. To create demand for electric vehicles requires a developed infrastructure of charging stations to spur the growth in sales of electric vehicles.
So in fact, the manufacturers are now sponsoring the installation, maintenance and operating costs of the stations; however, private subsidizing can only go so far until unprofitable business are no longer in business.
A certain number of charge stations are required to support the demand of electric vehicle owners. There are only two Tesla Motors charging stations in Alberta (as of April, 2016) with none in Calgary or Edmonton.
Networks- In Vancouver, electric vehicle owners can join a network to which they can subscribe for a monthly fee. The problem we see with this model is that significant capital is required to setup a network and a significant number of subscribers are needed to make it profitable.
If the size of the network does not keep up with the travel demands of the subscribers, then quality of service is going to wane. These networks may experience the same lag in growth and capacity that plagued wireless communication networks in the late 1990's until technology and massive investment caught up with demand.
Pay-per-Use- Pay-per-use is a fair system but doesn't have a unified strategy from region to region. These stand-alone charge stations can be located at strategic locations; however, since they could be provisioned by individual businesses, their maintainability and reliability may not be to the accepted standard of a network.
Usually, users would prefer the fast charging DC charger which are more expensive but without a unified strategy, a hodge-podge of chargers that won't lead to higher travel reliability.
Shop & Charge- Commercial businesses that offer charging stations to their clientele with anticipation of increasing sales to offset the capital and operating cost are going to have difficulty determining the benefit to their core business. This is a risky revenue model as it is difficult to measure additional goods purchased from clientele.
People may use the available charging stall for convenience but yet only make marginal purchases, similar to coffee shops that offer free Wi-Fi. Can a charge station be profitable for a price of a cup of coffee? And how much time, effort and aggravation will it be to supervise charging privileges?
Maintenance Agreement- Perhaps a company that operates and maintains recharging stations on behalf of owners may be a profitable niche. Owners can make the initial design and installation investment and have a maintenance company operate it for a share in the revenue.
Canada's large geography is making it a challenge for electric vehicle travel across the country and across our cities. For the electric vehicles to become more common-place, a profitable and sustainable business model for electric vehicle charging stations has to be created that will see stations as ubiquitous as existing gas stations. In fact, range anxiety makes it even more important to have a higher density of charging stations until battery storage technology improves.