That’s the way I suspect things are heading. Maybe free or cheap charging would encourage people to shop at Lowe’s instead of Home Depot. My local Safeway has free charging which gets used a lot. I suspect that might be related to the VW fallout though.
Exactly - this is entirely an economics question.
There are two factors that make it extremely difficult for a charging network to get built out by private companies: i) home and Level 2 charging; and ii) universal standards.
The first dramatically limits an operator’s ability to recoup the fixed costs of a charging facility through charging for electrons. Unlike gasoline (or hydrogen if it ever were to happen), consumers have alternative sources of fuel. Home charging lets them fill up with no markup on the electricity; Level 2 charging is cheap enough that many other facilities will offer charging with no cost for the electricity. Makes it very, very hard to run a business selling charging.
The second means that you can’t capture the economic benefit of the charger through the sale of the car. A universal standard discourages car companies from adopting a proprietary standard they can exploit for economic gain; but the flip side is that the car companies can no longer derive an economic benefit from building out chargers as an amenity to their specific car brands. Once everyone has access to a charging station, it’s no longer a perk or amenity of the car brand. Which means that isn’t an avenue of economic benefit available to drive expansion of the charging network.
Long story short - if there’s no economic model that supports people building fast chargers for public use as a business, then you won’t see the type of “virtuous circle” that led to lots and lots of gasoline filling stations. More cars meant more gas stations, because gas stations made money selling gas; and the more gas stations meant more cars could be sold. That positive feedback loop might not happen with charging, which might require public operation of charging (or a legislative requirement to provide it) rather than hoping for private parties to build it out.
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In cities there are fewer garages for apartments. Means city dwellers need to pay.
In rural highway areas people need to pay for charging.
In places where travel happens people need to pay.
I do agree the model is not great for your local shopping lot or in front of town hall. Like with all great things free is the enticement.
Charging has a cost in some locations.
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The bigger issue will there a be a jump in the technology?
I have a neighbor that owned gas stations for the last 25+ years. Back 10-20 years ago, he had 3 of them and he always told me that he doesn’t make all that much on the gas itself, he said it averaged about 5 cents a gallon, 2-3 cents in bad times (bad times = he bought a bunch of gas and then prices went down), 7-8 cents in good times (good times = he bought a bunch of gas and then prices went up). But he said that the vast majority of profit came from the convenience store where he had huge margins, many items well in excess of 100% margin. Things like buy a can of soda for $0.33 and sell it for $1.99, or his favorite example, buy a box of 50 or 100 phone charging cords for $68 shipped from somewhere in Asia, put them in a bin at checkout and sell each of them for $5. He said that charging cables and cigarette lighter adapters were the fastest selling non-food items!!! But over the last decade he says that the stations (he only has 2 now) are making more on gasoline than ever before, minimum 20 cents a gallon, but sometimes up to 50 cents a gallon depending on how the market goes. He also says that adjustments are slower today, so even if he paid a lot to fill his tanks, he can usually draw them down enough at the prevailing higher prices and delay lowering his price until closer to the time he next fills the tanks.
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Of course, we could all be looking at this incorrectly. The market for automobile transportation 15-20 years out may look nothing like the current market for pure economic / generational issues having nothing to do with avoiding fossil fuels and accelerating global warming.
It might be that the combination of greed on the part of surviving manufacturers and ever-increasing complexity required by safety regulations literally destroys the human-piloted vehicle market by raising prices beyond the value provided to the owner.
A new functional requirement was just publicized that requires all new cars to implement auto-brake capabilities when a vehicle traveling above 90 mph detects objects, other vehicles or pedestrians in the path. Obviously, car makers will object to this even though most have “safety sense” features already built in to most vehicles. Mandating this on EVERY vehicle is a different proposition and reduces margins, especially on cheap econoboxes. New car prices will inevitably go up, as will maintenance and repair costs as this gadgetry breaks or the electronics decline from hot/cold extremes of a vehicle.
Today’s market is a reflection of 50+ years of Madison Avenue perversion of individual consumer behavior by convincing nearly everyone that some portion of their self-worth is derived from how cool their car looks, how much power it has, how big it is, etc. It’s also driven by subsidized costs in the form of mandatory parking lot sizes at office buildings, shopping centers, public venues, that ENSURE people arriving by VEHICLE can be sure of finding a place for their car. We spend TRILLIONS of dollars in defense per year acting as the world’s shipping cop to keep oil lanes open for the world to keep fuel prices down. We are subsidizing individual drivers in the form of lax pollution regulation of the nation’s underwater aquifers at risk of contamination from fracking water.
And even with these “subsidies”, there are MANY Americans with incomes well above $60-80k who cannot afford the average selling price of a new car today, much less the prices for cars at the top of the scale. Between the insane cost of new vehicles, spikes in depreciation as vehicles undergo redesign cycles that normally would have taken 10-15 years and the ability for many to work from home 40-60% of each week, the “buzz” from driving a flashy car has dropped like a stone.
Could it be that the current strife in the auto markets is a “death rattle”? A sign of a pending inflection point where a sizable portion of the target market decides they’ve reached “peak car” and begin organizing their life around avoiding the need to have one?
If that’s the case, then designing a vehicle that can become the backbone of a huge fleet of cheap vehicles to deliver “TaaS” might be the ticket. In a TaaS world, no one really cares what cars look like, how the interiors are appointed and how many thousands of watts the Bose stereo system has. They don’t own it, they’re not willing to pay for a premium “experience” except for special events (prom, weddings, red carpet events) and cars will become as utilitarian, ugly and non-descript as a classic Checker cab. Or (we can dream, right?) maybe we begin investing in approprate rail and bus service.
WTH
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Probably not.
Certainly not in the U.S. We don’t have the population density in our urban areas (save always the NYC metro and a handful others) to accommodate people organizing their life around not needing a car. And we’re almost certainly not going to any time in the foreseeable future - that’s been the trend for decades, and if anything the pandemic moved population even further away from dense urban areas. And the long-term shift of our population away from the geographically constrained northeast/midwest and the far more land-rich Sun Belt is just going to continue.
Not likely anywhere else, either. European cities have much more developed mass transit systems and a legacy of massive amount of urban stock (housing and commercial) that was developed before the automobile…and cars are immensely popular there as well. Not like the U.S., but European automobile ownership has been climbing for decades as well:
Motorization rate in Europe (EU-27) | Statista.
Cars are just too good at moving people around for us to give them up. They’re just better at providing mobility than mass transit in most circumstances. Sure, in super-dense central business districts in major metros (again, NYC and a few others) spatial limitations mean you have to have mass transit. But otherwise - and especially if EV’s eliminate a lot of emissions and autonomy eliminates a lot of accidents - most mass transit modes are outdated.
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I think you need to give up at least one of these, maybe more.
I have been to the Supercharger at WalMart twice now, and both times it has been in use (all 4 slots once, 2 the second time at 8:00 at night.) There are lots of people who don’t have home charging - renters, homeowners who don’t want to spend for the install expense, and people traveling. (I will look at the stalls from now on to see how often they are in use, but it seems to me there is a business there. It might not be huge, but there is certainly some money to be made.)
The Level 2 charging intrigues me. Whole Foods has it here, and if I spend a full hour inside I get maybe 10-15% boost, so it’s non-viable as a primary charging source (unless I work there or next door, maybe.) And as I know it costs me $20 retail to “fill up”, and equating that to the 8 hours it takes in my garage, that’s roughly $2.50 per hour as a spiff to get me to shop there. Is Lowe’s or Home Depot going to spend that kind of incentive? A motel, yes, I see off a $100 tab. Whole Foods, big margins, so maybe. An apartment building going for $3000/mo, sure. I’m not sure a strip mall or Kohl’s is going to ante up for that - but in any case, Level 2 doesn’t solve the problem. I can’t visit my Kentucky buddy and plug in for 8 hours two miles from his house.
And what was the third? Oh, universal standards. Don’t see this as an issue at all. Plug compatible; the car handshakes with the charging unit, accepts the highest throughput it can manage, and starts up.
I would think an electric utility would be all over setting up a charging network in its area: it already has the lines and the know how, all it needs is the real estate for it. And there’s the rub - which is why I suggested WalMart. They’re everywhere, they have spacious parking, and they can get paid for allocating a few spaces for use 24/7 without having to lift a finger.
Yeah, there will be more, but I couldn’t predict how or where or when. One thing that should happen immediately: states which have given franchises to gas stations along the interstates should mandate a fast charging station immediately. They overcharge for gas and for hamburgers, it’s OK with me if they overcharge for electrons too; it’s more of a service that should be available. Of course those franchise arrangements with the states probably didn’t foresee EVs, and they’re likewise probably measured at least 10 years in length (a guess), but some accommodation should be made.
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I forget who brought it up, but the problem is also rush hour. If you want people to even commute to work via TaaS that will require nearly as many robots taxis as cars. And then most of them will sit idle until next rush hour.
Can TaaS replace a second car for a stay-at-home parent? Maybe. But I’m still very skeptical.
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I think you misunderstand. The problem with these things is that they are competitors to the business of selling EV fill-ups. Gas stations (collectively) can charge a high enough price on their gas to make operating a gas station economically viable, because there’s (almost) nowhere else a consumer can buy gas. The same isn’t true for EV “gas stations.” Consumers are going to be far more sensitive to pricing, because they have alternatives.
Home charging, of course, destroys an awful lot of consumer demand for third-party charging. But the existence of Level 2 charging as a free amenity does as well. If people can charge for free at the office, or at the movies, or at the mall, that makes it much harder for my charging station to raise prices high enough to clear costs.
It’s entirely possible that the market-clearing price that people will pay for a third-party charge in many places isn’t high enough to cover the costs to provide that service. Because there’s so many free or near-free alternatives to third-party charging for regular use, there just might not be enough business for a robust network of “electron stations” to exist.
That’s where universal standards come in - because they kill the other way that a third-party charger might get paid to run the system. If each manufacturer had their own proprietary standard so that your car was locked in to their charging stations, they could bundle the cost of running their charging system into the cost of the car. It’s their brand-exclusive amenity. That was the Tesla model. Access to the Supercharging network was perk of buying a Tesla. Bulking up the charging network was a lever they could pull to boost demand. But if all of the EV’s can use your network, putting more money into the network doesn’t have that same effect any more.
Obviously we don’t know for sure - but it’s certainly possible that a great charging network can’t make enough money on its own, and so isn’t worth all that much once you can’t use it as a brand-exclusive amenity. And a common charging standard that’s open to all kills the business model of a brand-exclusive amenity.
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The big mystery to me is why he laid off the Supercharger team instead of just selling that division. I would think that it could have been sold for a huge sum of money.
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It’s almost a certainty. Just like gasoline dispensers can’t make enough money on their own. I can’t remember the last time I saw a filling station ONLY. They all have stores attached now, and apparently much of the profit that makes the whole enterprise worthwhile comes from the stores.
Therefore, charging stations will probably have stores attached as well. Most of the independent ones already do, like Bucees, WaWa, etc. The ones that are attached to some other entity mostly do not, like Tesla superchargers or VW Electrify America (that was forced on them as a penalty for emissions fraud). What is quite possible is that stores with chargers will have higher profits than stores without chargers because people who charge spend more time there than people who gas up do.
I wasn’t clear, but I meant even considering that. No one offers just a gas pump - but the gas pump generates enough revenue and enough foot traffic for associated retail that the gas station can make money. The overall station is able to charge enough for gas so that the overall venture is profitable.
It’s entirely possible that the economics of EV charging just won’t support this model. Unlike gasoline, the ready availability of low- or no-cost charging at home or work puts a lot of downward pressure on price and volume at the station.
The longer time actually works against convenience retail (the typical model for a gas-retail combo). Convenience retail lets the owner monetize the large amount of traffic to the site. A longer refuel time means less turnover. Lots of factors go into it, but ceteris paribus you’d have fewer visitors for each recharge spot (or have to have more spots for the same visitors) if they take longer.
It might simply be that this isn’t an economically valuable enough service to drive more than niche provision of charging stations. Gas stations are somewhat ubiquitous in part because people can’t refuel in any other way. Charging suffers from free and no-markup competition.
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Oh to be sure. But it will certainly work at gas plazas and places where (as you point out) gas is a sideline. Pilot Travel Centers, Buccee’s Plazas and the like. There’s no reason they can’t work at WalMart (as they already are.) They certainly should be co-located at Interstate rest stops which already have a gas/restaurant component.
Yes, the demand won’t be “as big” as gasoline, but with all the travel Americans do there will be plenty of users. I do think you need to understand the difference between ‘Level 2” and “Level 3”. With level 2 it can take 6, 8, or more hours to charge. With the possible exception of motels, nobody is going to hang around anywhere for 8 hours getting a charge. Those that offer “Level 2” is like a gas station that would only give you 2 gallons. It’s not real, and it’s not a business.
Level 3 is different, and it already is a business, albeit incipient, but with barely 2% of the road traffic being pure electric. Surely that will grow, don’t you think?
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Ah, I didn’t do a good job explaining myself. Because that’s exactly the hurdle that Level 2 chargers present for charging businesses.
It’s not that charging businesses will use Level 2 chargers. They won’t - they’ll offer DC fast charging. It’s that their substitutes - workplaces and garages and other places - can and do offer them.
Exactly because Level 2 chargers are so limited, it’s economically feasible for businesses to offer use of them free of charge (no pun intended). Both to their employees (as a perk) and customers (as a relatively low cost inducement to patronize their business). Because the throughput is so slow, it can’t cost you that much to offer the free charging. And because it takes so much time to charge, you won’t attract as many free riders.
To use the gas analogy, you could never offer a free unlimited gas pump for employees to use in an office building parking lot. You’d lose your shirt. You’d end up paying for tankful after tankful every day just to your employees, and non-employees would likely try to get some, too. But if you had a gas pump that could only pump a quarter gallon per hour? Well, you could set that up in the parking lot and make it work. It’s cheap enough and time-consuming enough that you’d be out less than $10 per day, and few outsiders would be able to sneak in to fill-up without being observed.
There’s no actual analog to a Level 2 charger in the gasoline world, so no employer can offer a free “all you can fill” gas pump in their parking lot. But they do exist for EV’s, which is why free workplace charging (and customer charging sometimes) is a real thing. Which is one reason why the business of selling EV charges is not taking off at a pace to match the uptake of EV’s.
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Being time-consuming and taking up valuable parking space means that this strategy is not scalable and therefore will have an insignificant impact.
There are two ways Tesla can make money from supercharging that are consistent with laying off it’s current supercharger distribution team.
The first is by selling superchargers to gas stations. The Top 8 Gas Station Retailers Expanding into EV Charging
There is a compelling economic argument for this. As gas cars get more efficient and fewer in number, more gas stations will offer electric charging to supplement gas sales and to bring more business to their convenience stores. As things stand now the Tesla supercharger is the most cost effective, particularly if paired with a megapack that allow stations to buy electricity low and sell electricity high. Tesla doesn’t have to worry about expanding superchargers into underserved areas. The gas stations will accomplish this out of economic necessity
The second is what I posted above. Tesla will identify locations where supercharger use is high, such as along the interstates and tourist destinations. It will expand the number of superchargers at these stations, with much of the energy coming from solar and stored in megapacks. Again, buy low, sell high. High volume, high margins, high profits.
This isn’t true anymore. All you have to do is visit the most successful gas stations today - Bucees and Wawa and even Racetrac and you will see that they WANT people to hang out there for longer. Wawa even has real food and picnic benches outside to sit and eat while you hang out there. And Bucees wants to be a destination in itself. I’ve only been to one of them (in Georgia) and they had something like 120 or 140 gasoline dispensers and 16 or 18 superchargers.
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That’s because they’re not really “gas stations.” Wawa is a convenience store/quick-service restaurant chain - many of their facilities outside of the southeast don’t even sell gas. Buc-ees has a small number of enormous destination stores that are huge - and while selling gas is much more integrated into their business model, that’s not a model that can provide the dense network of chargers analogous to what gasoline stations provide.
Your typical gas station these days uses the high “foot traffic” from the pumps to drive convenience retail. They’re not going to have, say, numerous employees engaged in food prep and service - they’re just pumps and retail. That type of business model doesn’t benefit from slower turnover at the “pumps.”
Again, the impact of Level 2 charging isn’t as a business for selling EV charges; it’s as a mechanism that allows companies to provide free charging to employees (and sometimes customers) as an amenity. My office building garage has a number of Level 2 chargers that are free to use. That’s something that’s unique to electric charges - there’s no analog to that for gasoline purchases.
The prevalence of “free” workplace charging affects the demand curve for third-party EV charging stations. Employers can provide free charging the same way they provide free parking - as a perk to their employees that’s a de facto part of their compensation. The parking space is being used anyway and the time isn’t a factor, since the employee is going to be parked there for eight hours anyway.
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I get that. But can your company afford to provide free charging for all its employees? At what number does the cost of free level 2 charging become significant to the bottom line? At $10/day that’s about $2000/year/employee. Do this for 25 employees and that becomes $50K/year.
And how large is the benefit to the company, e.g., how much of an inducement is it really to an employee to join or stay with a company? My guess it is about as significant as providing free bagels and coffee in the morning.
Again, I am skeptical that this strategy is scalable. If not, then it is insignificant.
But they don’t want you to block a gas pump while you hang out. That’s the current problem with EV charging (pun intended). The longer the charge time the fewer the customers.
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It is a mystery.
If there is a technology upgrade don’t be surprised.
In tech the better engineering corporate leadership moves quickly to kill bad projects and as quickly to fund better projects.
Poorly run MBA leaderships do not understand those imperatives.