2030 Finance | June 1, 2018

Electric-vehicle charging-infrastructure finance emerges

Lou Del Bello
Guest Author

Lou Del Bello

ImpactAlpha, June 1 – Battery-powered cars are the new cool for car owners. Sales of electric cars are climbing thanks to longer-range batteries and better capabilities, a growing selection of stylish designs, and yes, government incentives. But good looks, zippy performance and rebates are not enough to turn electric vehicles (EVs) into a mass-market success.

For that, the industry will need to focus on something far less glamorous: charging stations. A Reuters analysis earlier this year found global carmakers are investing over $90 billion to break free from gasoline. Morgan Stanley estimates that if Tesla’s projection of 526 million electric cars hitting the road by 2040 is going to come true, the charging-station infrastructure to keep those cars on the road needs an injection of $2.7 trillion. A poll by Axios showed that concern about charging stations is the number-one reason people shy away from EVs. Hello investment opportunity.

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Michael D. Farkas, Executive Chairman of EV charging station company Blink Charging, says charging stations will become a massive business. “Anyone who owns a building or a parking lot with public access can invest in EV charging,” he says. From giants such as IKEA — which has equipped 69% of its stores with charging points — to garage owners, some have already seized the opportunity to add environmental and monetary value to their infrastructure. Here’s are some of the most promising plans out there for property owners:

  • Sharing works… SP+, the biggest parking garage operator in the U.S., is working with Blink to offer EV charging options to the owners of the buildings it manages. Property owners can buy the hardware, which costs between $2500 and $25,000 depending on its power output, handle the installation and keep most of the revenue minus connectivity and processing fees. The most common model is the so-called “hybrid,” under which revenue is shared based on each party’s contribution to costs.

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  • Corporate venturing… BP Ventures, the venture arm of British oil giant BP, has invested in StoreDot, a Tel Aviv-based electric vehicle batteries firm and FreeWire, a separate fast-charging battery company. Shell late last year bought NewMotion, a European electric car-charging network, and enlisted Ionity to put fast, high-powered electric car chargers in 80 busy highway service stations in 10 countries. Auto tech investment deals from corporate VCs doubled last year to 45.
  • China rising… In China, EV sales are getting out ahead of charging infrastructure expansion. Beijing is prepared to hand out incentives to equip China’s roads with 12,000 charging stations by 2020, enough to serve five million electric cars. Local and provincial governments could receive millions of dollars to build out infrastructure. China has also signalled it may soon be removing some of the barriers that currently discourage foreign investment in EV manufacturing.
  • State action… A growing number of U.S. states offer grants, rebates and tax credits for those who want to buy and install charging units. California alone counts over twenty incentive plans, including grants to purchase EV charging stations. Electric utility PG&E will pay for prepping sites and installing charging points, equivalent to around 60-80% of a new station.
  • Government fund… The U.K. government has budgeted for a £400 million ($542 million) charging infrastructure fund, plus £40 million in charging R&D. The fund, which should be up and running in 2019, will include a £200 million investment from the government matched by private capital. All elements of the charging infrastructure are eligible for support, although the U.K. wants to focus on the deployment of charging points rather than on alternative charging options.