Fueling the Future: Charging Station Growth Options Part 2…Rural and Highway Solutions
Part 1 of this article covered the challenges with EV charging, and solutions for urban areas that entrepreneurs can profit from, especially during the transition from ICE to EVs. Those solutions cover most of the actual EV range and charging challenges, but leave an expectations gap with customers for a rarer event: the long distance trip.
While I cannot account for every use case, generally long distance trips use the highway system where drivers attempt to safely maximize speed and minimize stops to reach a destination, change to a slower road, or exit to a scenic drive. Our highway system accommodates this by providing exits in cities and towns, with signs to food, hotels, etc. For these areas, the urban solutions described in Part 1 apply. In remote areas where urban centers are not near highways another solution is needed.
The US highway system already has an excellent set of rest stops, usually consisting of parking with picnic tables, toilets, water, and power. Installing charging stations at these locations, starting with the most isolated sites first, would enable EV owners greater flexibility and security, reducing their “range anxiety”. These sites are generally State property, but templates exist for public/private ventures at rest stops. If all highway rest stops had EV charging stations, this would support the ability of drivers to charge their vehicles in the longer stretches between urban areas while taking short breaks from driving.
Two examples that demonstrate State government flexibility in managing rest stops include vending machines and charity group coffee sales. In the first example, semi-permanently installed machines are bolted into the concrete and powered through existing lines. Various models exist for States to profit, including site rental fees, power fees, and profit sharing. In the second model, some States permit various organizations to sell coffee/snacks at rest stops. This establishes a model that EV companies and charging station entrepreneurs can copy to partner with States to rapidly grow their charging networks.
Many States are already enacting green regulations due to popular opinion, so providing States with an additional revenue source from charging make will make this pitch possible. Plus, during the COVID-19 economic crisis government tax revenues dramatically shrank, leading States and National leaders to seek ways to reduce budget shortfalls. Additionally, with record low interest rates (potentially negative with inflation), the first half of 2021 seems an ideal period to invest in infrastructure and gain favorable terms for partnerships with government agencies.
Outside of the highway system there are other ways to profit on extending the reach of EVs. Key to this is to look at where people are driving. Frequently the answer to that question is public land managed by either the National Park Service or the Bureau of Land Management. State and county level park systems also offer entry points into the EV charging market. While private parks and other locations also attract long distance visitors, for EV companies and charging station entrepreneurs, partnerships with State and Federal agencies will enable rapid scaling vs negotiating with numerous smaller organizations.
EV charging stations align well with the National Park Service’s mission, and allow the Federal government writ large to demonstrate a commitment to green technologies. The Park Service also has numerous public/private ventures with various forms of profit sharing. These include hotel management companies, concessions, and gas stations. This shows a model exists for rapid growth on National Park managed land.
BLM’s “Multiple-Use and Sustained Yield Mission” is different from the NPS, and many more of the locations are austere, making BLM a secondary target for those looking to blitz scale a new business. State parks (dated but good overview covering the 800 million plus visits per year, and a statistical overview) may make a better entry point for companies wanting to take advantage of this current gap due to the number of visitors, geographic proximity, and State regulations.
Adding EV charging stations at highway rest stops and at popular destinations will go a long way to mitigate “range anxiety”, leading to faster EV adoption. The Federal government and State governments benefit through increased revenues, burnished environmental credentials, and improved infrastructure. Companies providing EV charging stations and EV manufactures benefit from network effects as well from the direct profits. The timing is right for an EV charging company to break out and become the next generation Exxon/Shell/Mobile/BP, establishing a moat that will be hard to overcome by second movers…and right now Tesla appears best positioned to dominate the field.
Thanks for reading and I look forward to your comments.
-Red
