Electric car charging industry still looking for profitable business model

The dilemma is demand, chicken and egg quality. Many public charging stations are underutilized because most electric car drivers charge their cars at home. However, many people who still drive gasoline cars won't switch to electric until they see widespread use of charging stations for fear they will get in the way.

Seeds are flocking to this industry with the belief that the blooming season is just around the corner, but Sortakides and other skeptics warn that some of these companies will go bankrupt long before they figure out how to make money. create 500,000 additional public stations by 2030. Biden's plan to spend $15 billion is encouraging because investors will rush into electric car charging companies as soon as he is elected. The danger is that the former will go bad, and it could ruin the sector's capital markets for years to come.

Indeed, Chris Nelder, who has studied the finances of charging companies at RMI's Energy Research Institute, it will take years of investment before giving in.

Nelder is convinced that electric vehicle charging will eventually become more profitable. But when that tipping point will come is one of the biggest questions facing high-cost companies.

After a decade, the industry is still in search of a winning business model. Two of the best-known companies, Blink Charging Co. and Beam Global, have made less than $10 million in the past year. That hasn't stopped investors from boosting Biden's winnings by more than 500 percent in November. And while the company is far from culminating, it is still valued at more than $1.6 billion in the market. Beam has jumped more than 300%, but has lost about half of its value this year.

ChargePoint Holdings Inc, the largest U.S. company, just went public through a specialized acquisition company, or SPAC, and other SPACs such as EVGO Services and Volta Industries Inc. are poised to follow suit. Currently.

Refueling cars and trucks has always been a low-margin business: gas stations make their money mostly from selling snacks, coffee and cigarettes. When it comes to electric cars, companies have an even tougher time. Unless they live in densely populated cities like New York or San Francisco, drivers mostly charge their electric cars at home-their garage is the charging station. They are less likely to use public charging stations. Most cars have plenty of range to perform everyday tasks without recharging. The U.S. Department of Energy estimates that 80 percent of electric cars are charged at home.

Another uncomfortable issue is the use of parking lots as charging points. If a customer walks into his apartment at 9 p.m. and plugs into an outlet to buy a few dollars' worth of electricity, he often leaves his car there until work the next day. Regardless of when his car finishes charging, no one else can use that charger for the next 10 hours.

That's a relatively small number of cars: according to Bloombergnef, Americans registered 259,000 new electric vehicles last year, which is just 2% of total car and truck sales. And of those new electric cars, 79 percent were made by Tesla Inc.'s own network of brandsng other electric cars.

According to BNEF analyst Ryan Fisher, Tesla Tesla . Where is the demand to connect to these other networks? No, there isn't.

Charging companies are positioned differently in terms of profitability.

ChargePoint sells stations and provides varying degrees of operational support, but gets no money from the charging itself. The typical customer is a Silicon Valley company that offers employees free pay for the privilege. If a particular station is used minimally, ChargePoint continues to get paid.

I wouldn't want to refer customers because I think they are hungry; .

Other companies, such as EVGO, are charger owners who make money on every use.

Blink, on the other hand, takes both approaches simultaneously. The company prefers to own and operate as many stations as possible, but if property owners want to buy chargers directly from Blink, no problem. Managing Director Michael Farkas said the top priority is to secure good locations in high-demand areas.

Right now there's a 'land rapture' Farkas said in an interview. Later, .

Volta Industries, which plans to go public as part of this year's SPAC deal, is adding to the publicity. Its chargers feature 55-inch digital screens. Grocery stores can place chargers in their parking lots and bombard customers with ads for specific products.

Beam Global supplies self-contained units with solar collector canopies that power the batteries and charger. No need to dig a parking space to place the power lines. You can tell the world you're driving on free solar power

Beam has good reason to focus on ease of installation and self-generation. The time and cost of installing grid-connected charging stations can be significant, as building permits must be obtained and connections must be made to the local utility grid; according to BNEF, the equipment itself can cost up to $100,000 or more for the most powerful models; for slower basic chargers cost less than $2,000. Increased production should lower the cost of equipment, but that's another reason some companies are struggling to make a profit at the moment.

These are still early days, says Oppenheimer