EV Update, Part 1: DC Fast Chargers Get a Jolt
New standards announced as providers continue to work out business case
BOULDER, Colo. -- Although natural gas has been enjoying more attention lately for its potential as a transportation fuel, the market for electric vehicles (EV) continues to expand along with the development of the charging technology. In a recent webinar on the future of EV charging networks, presenters from Boulder, Colo.-based Pike Research discussed the state of the charging infrastructure and the brakes to its future growth.
One of these impediments was the lack of a technical standard for DC fast chargers from SAE International, which develops automotive engineering standards. These are the charging systems that promise to power up an EV battery in roughly 20 minutes, compared to the 3 to 4 hours it takes a Level 2 charger. Because of that short charging time, they also are the most promising option for c-stores and fueling stations interested in the EV charging business.
In mid-October, SAE International announced a long-awaited technical standard for DC fast charging, Combo, which now joins the rival Japanese CHAdeMO connector standard. With the Combo standard in place, Pike Research expects to see a large uptick in DC charging deployment in the United States, projecting the country will grab the second-largest market share for DC charging equipment by 2020.
Many of the EV supply equipment manufacturers and EV equipment managers were waiting for the standard before moving forward with new products. “Now it’s a matter of how much infrastructure will be retained as CHAdeMO, how much of it will be upgraded or swapped out for SAE, or offer two ports, one of each, so EV drivers can plug in at the maximum number of locations,” said John Gartner, research director at Pike. CHAdeMO is currently the standard of choice for Japanese automakers Nissan, Mitsubishi and Toyota, while Combo is supported by U.S. and European automakers.
“The world of DC charging is a little bit hormonally unbalanced at the moment,” said co-presenter Chelsea Sexton, an “EV activist” and founder of the advocacy group Lightning Rod Foundation. She cited the coming “street fight” between the SAE and CHAdeMO connectors, but also noted that the potential of DC fast charging is currently “way too overemphasized.”
That is partly because the demand for fast charging is likely to remain modest, with most EV drivers preferring to power up fully at home--overnight through a “Level 1” 110-volt wall outlet--or through a Level 2 charger installed at home, at work or in a public charging station, such as a parking garage or shopping mall.
“Consumers and drivers are almost never dependent on public charging,” said Sexton. “It’s nice to have, but not needed. That means they’re also not going to pay whole lot for it. So unless they’re desperate to have that single charge, they’re going to wait for the next free station or wait to get home.
“We’ve hurt ourselves as an industry, increasing expectations with customers by promising that there would be one on every street corner when we don’t need nearly that many,” she said.
Beyond the equipment itself, public charging providers still have not worked out a winning pricing structure, with some charging an hourly rate, typically $2 per hour, which is “moderately expensive” compared to charging at home, Gartner noted. Other providers have charged a flat fee for a single session, while still others have set up charging networks that are accessible through a membership fee or an “all-you-can-eat” subscription plan.
For operators of DC fast chargers, pricing is further complicated by their high energy draw of 50 kW or more.
“As they draw power at high rates … if that happens at a time of peak demand, it could be rather expensive for the power customer,” said Gartner, adding that charging providers could get hit with significant demand charges. “How that’s amortized over the cost of the equipment and passed on to consumers of energy is an interesting issue the industry is just getting its head around.”
“It poses a more difficult challenge for a site host: What they are going to charge for it, what customers are willing to pay, and what the timeline is for ROI,” agreed co-presenter Lisa Jerram, Pike senior research analyst. The DC fast charging units retail for about 10 times the price of a Level 2 charger, presenters noted.
“Because they are more expensive to install, they require a viable business model,” said Sexton. “That’s really tough to see right now because the more of these you install, the harder it is to make money on any one of them.”
That being said, Sexton believes there is still plenty of growth potential among retailers--from drug stores such as Walgreens to big-box players such as Walmart--for installing public EV charging stations, even though lately their zeal seems to have been muted. “Given the historical enthusiasm by retailers, I don’t think the bloom is off the rose,” said Sexton. Rather, retailers appear unimpressed by the terms of contracts currently offered by charging networks, she said, noting “there’s no reason to believe retail won’t be very, very strong going forward.”