6 minute read 3 May 2019
Father playing with children by electric car at home.

How to lead the charge on crowdfunded EV infrastructure

Authors

John Simlett

EY Global Future of Mobility Leader

All things mobility. Innovative thinker. Entrepreneurial mindset. Strategic partner and consultant for the auto and transport industries.

Thierry Mortier

EY Global Innovation Lead for Power & Utilities

Innovative and creative leader. Curious accelerator and visionary. Technology enthusiast interested in agile, blockchain, artificial intelligence, mixed reality, Internet of Things, market and trends.

Contributors
6 minute read 3 May 2019

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Electric vehicles are gaining popularity, but charging infrastructure remains stuck in the slow lane. Is shared ownership the answer?

When we’re talking about the future of mobility, too often the car is the star of the show. However, to deliver the promised vision of a world where we all drive clean, quiet, efficient vehicles that are electric, connected and increasingly autonomous, the less glamorous yet equally important issue of charging infrastructure also needs to be given its time in the spotlight.

Just as internal combustion engine vehicles require filling stations, electric vehicles (EVs) also need ubiquitous charging points — whether private or publicly available. In fact, they are arguably even more critical, as recharging takes substantially longer than refueling, at least with the current technology and price points. And an EV with a juiced-out battery cannot be rescued simply by injecting a few units of electricity into it from a plug.

The question of what comes first — EVs or charging infrastructure — has largely been addressed. It’s the setting-up of charging infrastructure that precedes the EV uptake.

As cities become congested because of increased urbanization and vertical living, available and accessible real estate for charging infrastructure will be a major hurdle. Collaborations and alliances — between charge point operators (CPOs), automakers, utilities, oil and gas players and real estate providers — are a prudent way to solve this real estate issue.

Beyond real estate

After space availability, getting to scale quickly on an easy-to-use, fast, widely available, vehicle-agnostic charging infrastructure is one of the industry’s biggest needs. Yet the current reality could hardly be further away from that goal.

It is characterized by geographically patchy and inadequate coverage, coupled with a baffling range of charging speeds, standards, connectors, providers and payment methods. This is enough to make charging sufficiently complicated and confusing to put off all but the keenest of customers and investors.

Although the global total of charging points reached around 3.5m in 2017, fewer than 500,000 of them are publicly available chargers.Only 112,000 are publicly available fast chargers of 20kW and above, and three-quarters of those are in China. The vast majority of chargers worldwide are private and slow, inaccessible to most users and increasingly obsolete as a consequence of rising battery capacity and user demand for reduced charging times.

Finding a public fast-charging point is a challenge for most users, as is paying to use it, thanks to a plethora of operators requiring different accounts and specific applications. Consequently, most of the charging is still done at home, which rules out EV ownership to apartment-dwelling urban residents for whom EVs would otherwise be the obvious choice.

Setting up charging infrastructure is more of a real estate or space issue than a technology or financing issue. 

Similarly, many who enjoy the EV driving experience and are convinced by the environmental arguments still fail to make the leap because of fears over where, when and how they will be able to charge their vehicles.

The situation for would-be investors is hardly any more appealing. It’s a chicken-and-egg situation. Major investors are currently constrained by conflicting standards, concerns over ROI and the uncertainty of making large, stand-alone investments in such a heterogenous field.

Shared ownership of charging infrastructure is one way of unlocking investment and kick-starting the required jump to scale and ubiquity. Charging infrastructure should follow the example of electricity networks themselves, privately owned but publicly accessible utilities.

The EY organization offers a blockchain-enabled platform, Tesseract, that provides shared ownership by employing smart contracts. Investors can pool resources and commit as much or as little capital as they wish, secure with the knowledge that the Tesseract blockchain may share all returns appropriately. It can also enable individual investors to tailor return profiles to suit their own requirements, whether discounted up front in exchange for more later, or consistent all the way through.

A shared approach

Shared ownership is a bottom-up rather than top-down approach that also has the benefit of opening up investment in charging infrastructure to a much wider range of interested parties, not only those with the deepest pockets. Employers could pool resources to build out charging points for their workers, city authorities could combine forces with original equipment manufacturers (OEMs) and local businesses to do the same, and groups of private individuals could even get together and co-fund charging points for their own street, village or town.

Investors could also opt to take their returns partly or wholly in kind — smaller investors or employer groups could take theirs in the form of free charging, for example. Shared-ownership charging infrastructure could play a part in the new smart grid that will emerge as decarbonization and electrification move us closer toward a decentralized energy ecosystem.

By encouraging local development driven by local demand, shared ownership infrastructure would facilitate the simultaneous expansion of charging in larger cities, which could then join into the larger, collaborative regional and national networks. Shared ownership networks would also help simplify the user experience, providing agnostic charging points able to serve all or most EVs regardless of manufacturer or standard.

The industry is recognizing the charging challenge and the potential of joining forces to tackle it. Automakers are prioritizing the release of new EVs along with charging infrastructure, electric utilities are seeking further expansion of charging networks, and oil majors — anticipating declining revenues — are investing in and acquiring charging vendors.

Charger availability

75%

of the 112,000 publicly available fast chargers (20kW and above) are in China.

Several large automakers are working in partnership on the Ionity project to install about 400 public fast chargers on major routes across Europe.CHAdeMO is an even more ambitious cross-sector collaboration involving OEMs, city authorities and power companies; it has installed over 22,000 Direct Current (DC) fast chargers across Asia, Europe, Japan and North America to date, making it the largest DC fast-charging network in the world thus far.3 

These initiatives are a step in the right direction in terms of boosting the scale and speed of charging rollout. But they do not offer the greatest possible scale and speed. We believe that will only be achieved by making charging infrastructure accessible to the widest possible pool of blended investors, through shared ownership and customized returns profiles.

EY Tesseract is not the only suitable platform available, but we are already in conversation with both city authorities and OEMs about shared ownership charging projects. Tesseract itself is also being successfully piloted by OEMs and car rental groups, among other organizations.

Charging points may never be able to match the glamour and curb appeal of the latest shiny new EV. But without the investment to build more of them in the places where they are most needed, buying decisions will always be clouded by the practical difficulties of where, when and how to plug in.

Summary

Charging points may never be able to match the glamour and curb appeal of the latest shiny new EV. But without the investment to build more of them in the places where they are most needed, buying decisions will always be clouded by the practical difficulties of where, when and how to plug in.

About this article

Authors

John Simlett

EY Global Future of Mobility Leader

All things mobility. Innovative thinker. Entrepreneurial mindset. Strategic partner and consultant for the auto and transport industries.

Thierry Mortier

EY Global Innovation Lead for Power & Utilities

Innovative and creative leader. Curious accelerator and visionary. Technology enthusiast interested in agile, blockchain, artificial intelligence, mixed reality, Internet of Things, market and trends.

Contributors