North American Light Duty Electric Vehicle (LDEV) Charging Market and Supply Chain Assessment: Where are the Gaps and Opportunities?

Synthesis Partners LLC (SP) identified, characterized and ranked many gaps and issues in the North American Light Duty Electric Vehicle (LDEV) supply chain in 2019. In addition SP identified and characterized all key suppliers of EV charging equipment, their current status and plans in the North American supply chain. This work was sponsored by the US Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE), Vehicle Technologies Office (VTO).

Selected examples of gap statements, starting with utility-related gap statements, follow:

  • Utilities need to make the grid edge autonomous and interactive – But this capital investment for grid-edge improvements is based on distributed energy resources (DER) assets that Utilities do not own.
    • “Utilities considering how to manage two-way power flow and variable distributed energy resources (DER) while maintaining the reliability, efficiency and security of their operations.  Roughly one of every five respondents say their utility plans to spend more than $200 million into modernization over the next three years. An additional 26 percent report they’ll devote $100 million to $200 million to that cause.  The key drivers of the investments that utilities are making in distribution system modernization stem, perhaps ironically, from assets that utilities often don’t own, namely DER such as rooftop solar arrays, electric vehicles and battery energy storage systems.”
  • Utilities Say that Market Conditions Do Not Currently Justify an Emphasis on the Away-From Home Charging Market.
    • “Our view is that although we are willing to fund the placement of chargers away from the home for the convenience of our EV customers, market conditions do not currently justify an emphasis on the away-from home charging market.  For example, ChargePoint continues to build a fee-based charging infrastructure, but they have to wait for the market to develop to the point where they will even start to recoup their investment and actually turn a profit.  In the meantime, they are relying on subsidies.  This is not a sustainable approach and we have to be careful regarding how many resources we devote to developing a charging infrastructure that the market isn’t ready to support. Residential-based charging should be the first focus, high-power, fast-charging should be the 2nd priority.”
  •  EVSE (EV Supplier Equipment) OEM Interactions with Utilities are Sometimes Difficult.
    • “Our engagement with utilities, especially in California, has been a bit difficult.  For example, Southern California Edison (SCE) has its own “Charge Ready” program which provides free/reduced charging equipment and charging services for EVs, including buses.  (https://www.sce.com/business/electric-cars/Charge-Ready).  Programs such as this make it difficult for us to provide a competitive service.  For example, to offset the costs of its Charge Ready program, SCE has removed demand fees.  However, we expect that over the course of time the demand fees will be reinstated which will negate the cost benefits for fleet owners in the long term, but hurts companies such as ours in the near term by leading fleet owners to opt for the SCE program rather than ours.”
  •  Utility Demand Charges Appear to Be a Barrier to EVSE Market Growth.
    • “For a market that is just getting started, the demand charges are a barrier,” Nelder says. If the stations had utilization rates of 80 percent, they might be able to absorb the demand charges, but at 10 percent utilization, they become unprofitable, he said. Utilities put demand charges on large industrial and commercial users who place high demands upon the grid and are based on the customer’s peak use of electricity. In California, utilities have put demand charges on each of EVgo’s stations.  The result is that in some cases, these charges were responsible for more than 90 percent of a charging station’s electricity costs—as high as a $1.96 a kilowatt-hour at some stations during the summer months.  “Demand charges are especially challenging to new charging infrastructure that has not yet reached a sustainable utilization rate,” the study says. “This issue will be compounded by the deployment of next-generation fast-charging stations.”

Examples of EVSE-supplier related gap statements include:

  • Turnkey Mobile Energy Storage vs. Installing Permanent Chargers.
    • “The battery in FreeWire’s charging unit is constantly being charged which negates the necessity of the infrastructure required by permanently installed chargers and results in a reduction in the overall costs, including the purchase of land, electric infrastructure, etc.  Currently, our units are mainly used in workplace charging and applications such as food trucks where our product proves to be more cost-effective than food trucks’ traditional use of diesel generators and as on-demand emergency charging.  Each unit has 2 connectors and average the charging requirements of 6-8 vehicles/day.”
    • “Quiet, non-polluting power for facilities or remote sites, such as food trucks, music events, construction sites, emergency response, and backup power needs. Mobi EV Chargers are ideal for applications that require flexibility and when installing permanent infrastructure is not feasible; they deliver high-performance EV charging capabilities beyond the confines of fixed infrastructure.”
  •  EVSE OEMs Have Reason to Use Proprietary Systems.
    • “If there is a need to create interoperable networks, they will do so.  Competition is Healthy.  Should a company go out of business, often another charging company will take over their business and take the steps necessary to ensure the acquired companies charging equipment is compatible with existing networks.  This was the situation when both Eaton and Schneider left the market – the companies that acquired these firms took on the responsibility to ensure the interoperability of the acquired hardware and software with their own equipment. To the extent that it is in the interest of several companies to work together to improve their collective profitability, then it is in their interest to make their equipment interoperable.  For example, AddEnergie is working with ChargePoint to achieve this.  AddEnergie does advocate roaming interoperability, that is, the ability for an EV to charge in different networks.  In Canada, this has largely been achieved while the U.S. is still working toward this.”
  •  Primary Role of Level 2 Charging vs. High Cost of Fast Charging.
    • “Suncor (through subsidiary Petro Canada) has had Level 2 chargers in operation for over a year and this year we are starting to install prototype Level 3 chargers.  Our equipment supplier, the same supplier used by VW, has been fantastic.  However, as we move forward, we have found that the high cost of electricity at peak times is expensive and means it is highly unlikely that the Level 3 chargers will be profitable.  To address this, we are considering the addition of on-site energy storage units at our fast-charging locations, but this also presents an additional expense and some of our sites have limited space available for energy storage units.”
  •  [MD/HD] Fleet Charging Needs More Development
    • “More funding programs to help fleet owners bridge this financial gap are needed. … For example, if fleet owners want to use Trillium’s EV charging product, PowerUP, the approach that makes the most financial sense over the long term is to build an EV charging capability that will handle projected fleet size.  However, due to the initial expense of this approach where savings will only be realized over time, a more viable near-term solution is to take a scale-up approach where additional charging capability can be added over time as the fleet grows.  However, even with this approach, most of the incentives available to fleet owners to acquired EV capability is spent on pilot buses with little capital remaining for fleet expansion and charging station cost.”

For further information, please see North American Light Duty Electric Vehicle (LDEV) Charging Market and Supply Chain Report (2020).

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