Automakers know that the sales of electric vehicles do not get off the ground before the drivers have access to a handy network of chargers. But no one except Tesla wanted to spend the billions to build the infrastructure.
Now Volkswagen is working to make it happen – not because it wants it, but as a punishment.
Volkswagen subsidiary Electrify America will spend 2 billion dollars in the next decade to develop a nationwide web of fast chargers that is accessible to all brands. The investment is a result of Volkswagen's settlement with federal regulators after it has admitted that the installation of software in diesel vehicles has been set up to cheat on emissions testing.
Electrify America's mandate is ambitious: build the infrastructure needed to encourage the use of zero-emission vehicles.
This is "an opportunity to build a sustainable infrastructure model that can live outside the consent decree", told Electrify's COO Brendan Jones at Automotive News.
If Electrify America can achieve its goals, it can be the answer of the automotive industry to Tesla's formidable and patented fast charger network. Tesla's global presence of more than 11,200 Superchargers has provided a major advantage over other EV makers, with which it can deliver up to three times per September from the same period in 2017 this year, according to Tesla.
But Electrify America's non-proprietary charger network could ultimately do more than Tesla to stimulate EV acceptance by better addressing infrastructure.
People used to talk about EVs that cause & # 39; range anxiety & # 39; was created, said Matt DeLorenzo, managing editor at Kelley Blue Book.
"The next big thing will be chargers," DeLorenzo said. "Can I find an open charger and do I have to wait for that?"
The urgency is clear. Full electric and plug-in hybrid vehicles will represent 12 percent of light passenger cars in North America by 2025, according to IHS Markit.
Developing the equivalent of a petrol station network, in terms of availability and ease of use, is crucial for battery EVs that exceed about 1 percent of US sales this year until August.
"The key is not to let electric vehicles be different from other cars on the road," DeLorenzo said. "A robust charging infrastructure is a way to do that."
Shift rollout
Electrify America says it is building the first national highway network of chargers. But it will not happen from one day to the next. The $ 2 billion will be invested in four 30-month cycles.
In the first investment phase of $ 500 million, by mid-2019 Electrify America will install 484 DC fast chargers in 17 urban areas and along highways. So far, 24 sites have been opened. Electrify America will also install more than 2,800 Level 2 chargers on 500 commercial and multi-family homes.
For some vehicles, DC fast charging stations with 350 kilowatts can be added within a radius of 10 minutes to 200 miles range. Level 2 Chargers can add up to 200 miles in 10 to 12 hours.
"We are almost 100% complete for identifying the site for the investment in the first cycle," says Jones of Electrify America.
The steady rollout helps the company to adapt to demand patterns and evolving charger and battery technologies. It also allows Electrify America to apply lessons learned during the one investment cycle to the next.
"We are already better today than we were six months ago when it comes to selecting locations, installing chargers, managing software and service activities," Jones said.
The extension requires competent execution and patience. Electrify America will donate and install level 2 chargers on the business and multi-family homes. The owners of the accommodation pay for electricity and can choose to charge for the service. "It is the most practical way to collaborate with the EV ecosystem," Jones said.
Electrify America has agreed to maintain the Level 2 chargers for 10 years to ensure the reliability of the network. "You do not want a customer to go to a charger and that does not work," Jones said.
One of the biggest challenges is getting legal approvals to install the chargers, said Graham Evans, a chief analyst at IHS Markit.
While wiring and installing the chargers can be done fairly quickly, getting government approvals can take 12 to 18 months.
"As time goes by, they are customers that you might lose," says Evans. "The planning of the network has to be done very carefully, taking into account the fact that it probably takes so long to set up the infrastructure in certain locations."
Improved access
In a nod to that reality, Electrify America is working with EV Connect, Greenlots and SemaConnect networks to give drivers access to more chargers without needing additional cards or accounts. The partnerships, comparable to those of mobile providers, will offer Electrify America customers access to approximately 12,500 chargers by mid-2019.
Other hurdles to profitability are the cost of the fast charging technology needed to promote high customer sales at each charger and a dependence on car manufacturers, allowing their EVs to be quickly recharged.
"These infrastructure providers eagerly wait for the number of EVs on the road to take off to get through their stations, so they can start earning money," says Evans. "At the moment, there is an infusion power supply from OEMs that can be used to market higher-capacity vehicles."
With Electrify America Volkswagen kills two birds with one stone. It is a fine to cheat Volkswagen's emissions and at the same time become the infrastructure that supports the electrification ambitions of the automaker.
"As much as the Electrify America campaign is a major financial commitment, it is also an opportunity for Volkswagen to ensure that the infrastructure does not form a barrier for them when they bring their EV products to the market," said Evans.
Volkswagen Group says it expects to build 10 million EVs based on its EV architecture, known as MEB. VW plans to build 27 models for four brands based on the platform.
"If there is no place where customers can plug in their vehicles, the desirability of these vehicles is limited," says DeLorenzo.
In contrast to Tesla's Supercharger business model, which relies on exclusivity to drive the sale of the company's vehicles, Electrify America embraces inclusiveness as a way to make a profit.
Electrify America, for now, has two sources of income: an access price for car manufacturers and usage-based fees paid by EV drivers. The following: a subscription to a subscription.
Profitability depends on Electrify America's ability to drive by placing loaders in crowded areas and ensuring that the network operates reliably.
But it also depends on something outside the control of the company. "The sale of vehicles has to be there," Jones said. "Manufacturers have to bring vehicles to the market that people will buy."
Jones refused to say when Electrify America expects to break.
Multiple standards
To maximize utilization, the network is designed to accommodate a range of charging speeds and connectors. The urban stations have three to six chargers ranging from 50 to 150 kilowatts. Expressway stations offer four to ten chargers, including ultra-fast 350 kW chargers.
It is a network that is "future-proof and flexible enough to maintain all vehicles for today, tomorrow and the future," Jones said. "We want as close as possible to the same fuel experience as ICE drivers have at a gas station today."
Electrify America & # 39; s DC fast chargers are compatible with CCS and CHAdeMO connectors.
"I do not see this" charging-standard-neutral "approach, of having one CCS charger and one CHAdeMO charger at each charging point as a viable long-term approach," said Shiv Patel, a analyst at ABI Research. "Industry needs to move towards a single charging standard to reduce complexity for consumers and reduce infrastructure costs for providers of charges."
In September, EV startup Lucid Motors announced a deal with Electrify America to offer its customers a national charging plan. Lucid's first vehicle, the Lucid Air sedan, is scheduled to start production in 2020.
In the meantime, Volkswagen's Audi customers will be charging EV 1000 kilowatt hours at Electrify America locations over a period of four years from its upcoming e-tron EV.
Jones waved away questions about who would be the next to close a deal. "We are talking to every automaker that introduces an EV," he said.
Audi stablemate Porsche can be the next. The manufacturer of sports cars is talking to Electrify America, ChargePoint and EVgo to have a network of at least 500 highway-based chargers before the fully electric Taycan arrives in the US in early 2020.
"Hopefully we signed the contract with one of them before the end of the year," Klaus Zellmer, CEO of North America, told Automotive News in September.
Victim of his own success
The Supercharger network of Tesla is born out of necessity. Public charging infrastructure was rare when Tesla started selling its Model S luxury sedan in 2012.
While an exclusive charging network distinguished Tesla and stimulated sales, it created a bottleneck in the infrastructure because demand in some areas is greater than demand. Tesla has started charging customers for access and has initiated stationary charges to make the traffic flow.
Mike Ramsey, Automotive Research Director at Gartner, doubts whether Tesla will open its network to other car manufacturers, given traffic jams at certain locations.
"Can you imagine the outrage when a Chevy Bolt or an Audi e-tron pulls into one of these stalls?" Ramsey said. "I think it will be politically difficult to do."
In the long term, however, Tesla could seek to split the Supercharger network into a company that focuses on the broader EV market.
"When charging infrastructure is commercialized and it's everywhere, it's not necessary to provide a service especially for Tesla customers, especially if others offer better performance," says the IHS analyst. "I do not think it's sustainable for Tesla to put more and more infrastructure in the ground to specifically support their models."