SHOPSMART AUTOS – CONSUMER INFORMATION – AUGUST 1, 2021
Biden wants to build a national EV charging system (PT.2)
GM has committed to releasing 30 or more EVs through 2025 under a $27 billion investment in electric and autonomous vehicles. It also is one of many companies to focus on EVs following the success of Tesla. Volvo has announced plans to become an all-EV company by 2030, while Volkswagen has a mission of being the world’s largest manufacturer of electric vehicles. “We’re moving into this year at a tipping point for EVs and really an inflection point on sustainability, inclusion, and growth,” GM CEO Mary Barra said Thursday during a JPMorgan Securities conference. Public chargers are needed to power those vehicles, but companies such as EVgo need the demand for charging to be there to justify their business. Many have described it as a “chicken and egg” scenario regarding which is needed first. Levy, who served as deputy chief of staff at the Department of Energy under the Obama administration, characterizes it as “peanut butter and jelly” instead. “It’s not ‘chicken and egg’ because we’re not starting from scratch,” he said. “We have charging, we have EVs. It’s not what comes first. It’s peanut butter and jelly, in that we need to build these things out in a complementary way.” About 30% of Americans don’t have access to home or workplace charging that they may need in the future, according to Levy. As for 2020, IHS Markit reports EVs were only 1.8% of new light-duty vehicle registrations in the U.S. AlixPartners expects there to be 18 million EVs on U.S. roadways by the end of 2030.
Business models
EVgo, which plans to go public in the second quarter through a $2.6 billion SPAC deal, owns and operates more than 800 charging locations in 67 major markets across 34 states. The company’s business model is different than ChargePoint, which sells stations to businesses and other establishments and then charges them subscription fees to be a part of their network. “We’re essentially crowdfunding for the driver one business at a time, the largest network of EV chargers in the area for them and they see it all as one network through our mobile application,” ChargePoint’s Romano said. “It all says ChargePoint, we don’t own any of it. It’s just all looks like we own it to the driver and that’s what we want is to create a model where each business does their part.” ChargePoint is Cowen’s “top pick” for the recharging market, which the investment firm believes will be a total addressable market of about $27 billion by 2040. The company went public March 1 through a SPAC deal with Switchback Energy Acquisition Corp. While largely new to public investors, Cowen believes “the sector is poised for tremendous growth and value creation, underpinned by a large, strong unit economics, and recurring revenue,” according to a report on EV charging earlier this month. But that growth needs to come with EV sales as well as incentives and investments from several sources, including the federal government, according to officials. “Right now you absolutely need government funding at some level,” Wakefield said. “The reality of it is that the automakers don’t have the money. Utilities have some of the money, but the business case isn’t there. It’s so expensive.”
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