There is one interesting aspect about the fact that the supply chain crunch has made it more difficult to get vehicles especially certain battery electric vehicles (BEVs). Right now, we don’t have the infrastructure to support those BEVs. And the extra time gives us the opportunity to develop the infrastructure so that it can support a steady migration.
Infrastructure for BEVs includes private chargers both at home as well as depot and workplace charging. For the most part, private chargers are not accessible to the public. For fleets embarking on an electrification journey, we recommend employing a phased approach using an electrification propensity scale. You need to poll your drivers to figure out who is in the right position to accommodate a home charging set-up. Drivers who don’t own their homes or have lead paint or asbestos in the area where the charger is to be installed are not ideal. Good candidates are homeowners with a 200-amp panel and an attached garage which means no tunneling or conduits are required. On average, we are seeing home charging costs coming in at around $1,700. Assessing your driver pool is necessary because you really want those quick wins. In addition to surveying drivers, Sharon Etherington, Senior Manager, Fleet and Travel at Roche Diagnostics went to the top. She said, “I decided to change it up and went to the leaders of the leaders – the highest leaders in the organization asking them all to participate in a pilot because it is very important that they understand how a BEV works, the charging situation, the apps that go along with it, the who, what, when and where of the operation of a BEV.”
For workplace or depot charging, the site assessment is critical; it is a larger project, and it is not as easy as just plugging in a couple of chargers and having a few ports installed. The supply chain issues that everybody is experiencing in every industry are also affecting the charging industry so you might want to accelerate your installation plans because you might not be able to later due to unavailable parts. Workplace charging requires project management; it is not something that is simple to do. A simple installation involves a couple of charging ports with limited intervention required. The power company does not have to upgrade the transformers or the amount of energy coming into your facility. And there is no involvement from a property management service. We are seeing simple installations taking 6 – 12 months. A more complex installation might involve a property management service requiring multiple bids and 50 vehicles that need to be charged. These installations are taking around 18 months and they are not cheap. We are seeing workplace infrastructure bids coming in as low as $10,000 and as high as $100,000. It just depends upon how the facility is set up and how far away the junction box is from where you want to charge your vehicles.
It is important to plan for the future but install for the present. As an example, take a pilot project for which you might only have ten EVs, but you know you want to deploy 50 in the future. Do all the prep work for the charging infrastructure for the 50 vehicles but only install the ports that are needed for ten vehicles because then you don’t have to pay for all of that trenching and conduit work that needs to happen twice.
Finally, when planning private infrastructure and electrification, engage your SMEs from all parts of the business. The path to electrification, EVs and a charging infrastructure is going to bring people in from across the organization. Katie Keeton, Fleet Manager, Mobility for Siemens said, “Electrifying a fleet is a big task and we’ve had to work with people across the organization from sustainability and communications to tax experts. It is important to have a big network in your company.”
Funding for Infrastructure
You want to decide whether to make to make a capital expenditure and put out all that money immediately or turn it into an operational expense and bundle charging as a service. If you don’t have a lot of money in your capital budget, the operational expenditure model can be an easy way to get the infrastructure in place by paying a set fee per month.
For workplace charging, there is always the possibility of turning your charging stations into a revenue stream. Who doesn’t want to tell their boss: “Hey we can potentially make money off this”? If the chargers are in publicly accessible places, you can make them available to the public during off hours. For example, an office park that is empty after 5 pm at night can turn into a publicly accessible charging station at 5 PM with the flip of a switch and you can make money from it so that you can bring down the cost of installing and maintaining your EV infrastructure.
Now let’s look at public infrastructure – facilities where you and I as consumers can go to charge our vehicles. There are about 114,000 Level 2 (6.2 to 7.6 kW versus the 1.4 kW you get with a Level 1) and DC fast charger ports and over 47,000 charging stations across the US. This information is available through the US Department of Energy’s Alternative Fuels Data Center. The Infrastructure Investment and Jobs Act, passed in November of 2021, puts 7.5B dollars in place to create more EV charging stations. They are primarily going to go along the interstate highway corridors – 615M dollars are available right now for fiscal year 2022.
There are over 100 charging companies in North America and most of them are less than five years old. The industry has seen 2B from investors into EV charging startups in the last five years. When you are thinking about choosing a supplier, you want to make sure you are working with a company on solid financial footing. Choose a company which will be around for the long haul.
Open networks are available through companies like Chargepoint, EV Go, Electrify America, EV Connect, Siemens and ABM – they all have charging infrastructure available to the public either from a sales perspective or an actual charging infrastructure perspective. Then there is everybody’s favorite – Tesla. Tesla has a closed network but it is not going to be closed for much longer. Elon Musk has promised he is going to open the Tesla supercharging network to other OEMs and other individuals who aren’t necessarily Tesla owners. Tesla has the best charging network out there.
When working with infrastructure companies, you should talk to multiple providers and ask for references. You want to make sure that you know who you are working with and that you know they understand what you need from them. Engage your SMEs from all parts of the business. The path to electrification is going to bring people in from across the organization. Katie Keeton, Fleet Manager, Mobility for Siemens said, “Electrifying a fleet is a big task and we’ve had to work with people across the organization from sustainability and communications to tax experts. It is important to have a big network in your company.”
It is important to understand the difference between hardware software providers and hardware or software providers. With multiple vendors out there, you might find yourself using more than one which normally means that you would have to use different software management solutions to manage those charging stations. But there are providers out there that will provide a software overlay so that no matter what you will be able to manage all your charging stations no matter the provider using one software solution.
If you believe that you might fund your infrastructure as an operating expense, there are some charging as a service providers who can even include the cost of electricity so there is no variation no matter how much electricity you use. This approach involves utility and EV vendor coordination. It also becomes much more intense to negotiate at the beginning, but it makes the rest of the process incredibly smooth.
The Changing Landscape for Utilities
The utility companies now have a new role. They can’t be off on their own anymore. Load planning is huge. We’ve seen what has happened in Texas and Louisiana when extreme weather events occurred. Texas went dark for three or four days which would be devastating if we were all driving EVs. We know the infrastructure in the US is not up to the challenge now. It is going to be up to the utilities to make the upgrades needed so we can continue along this electrification path. And, of course, now they are going to have increased customer engagement. They will have to really work with the customers to make sure that they have the right power supply coming into their facilities. They will need to make sure customers have upgrades form a transformer perspective and they are on the right rate plan for what they need. They will have to create new business models where the focus is on make readies – making the infrastructure ready to the point where it connects to the building; there must be operability.
The OEMs – GM and Ford – are now considering developing vehicle to grid programs where their vehicles can provide power to the grid in times of extreme needs.
Now let’s talk about incentives. Understand the difference between vehicle incentives and infrastructure incentives. There are incentives available specifically for the acquisition of vehicles and there are incentives available for the installation of infrastructure. There are existing federal incentives for EV vehicles, and we are working on getting more incentives in play. Right now, the $7,500 dollar tax credit is likely out of play for Tesla and GM and will soon be out of play for Ford, Nissan and Toyota. There are also local incentives especially in California and New York for installation of home chargers and finally, the utilities themselves offer some incentives. The Electricity Partnership Coalition is a partnership between utility companies from Texas to Washington D.C. with the goal to build out fast charging networks for EVs. Both Georgia Power and Southern Company amongst others recently joined the coalition. There will be some incentives for home charging and depot charging as well as private charging versus public charging. Public incentives will require the public is able to use these chargers.
Cost of Electricity
According to the U.S. Energy Administration Information, the average rate for home charging costs $.13 per kWh and commercial charging costs $.11 per kWh hour. There is a much higher cost for public charging at $.59 cents per kWh because there is an additional cost for the installation as well as time of use charges, demand charges and access fees. Membership costs are going away but they were a factor. Some charging organizations and public charging providers charge by the minute versus the kWh which can be expensive.
Electrification in the Near Term
When asked what to expect especially in the near term, Vic Stewart, Director Corporate Purchasing, Fisher Auto Parts, said, “I think the next 12 – 18 months are going to be more of the same with delays and a lot of supply chain challenges. Although I am personally hoping things will get better soon, it may be mid 2023 before we see some light. It is a great opportunity to ‘stick your toe in the water’ by getting out there and gaining some experience with BEVs. What better time to really do your research and start planning your electric future?”