350Green Acquisition Shows Path of Public EV Charging Industry
CarCharging Group announced yesterday it has plans to acquire 350Green LLC, a rival public charge provider with roughly 600 stations spread across 20 markets. Together the networks would combine to create the largest public charging network in the United States, with more than 1,000 total stations encompassing most major domestic plug-in vehicle markets.
The two companies have found their greatest success in forming private partnerships with properties ranging from malls, to apartment complexes, to pharmacies. Both companies have agreements with Walgreen's to provide charging for of the drug and retail chain, which announced plans last year to install public stations at 800 of its locations nationwide.
"This partnership will be highly advantageous to the EV charging industry and will contribute significantly to the overall growth of the market," said 350Green CEO Mariana Gerzanych, in a prepared statement.
Slow to Take Off
Prior to yesterday's acquisition, the public charge network market was crowded by a list of players including 350Green, Car Charging Group, Ecotality, NRG Energy, Coulomb Technologies, and Better Place. These six main providers employ a variety of revenue models, including pay-per-minute, subscription, and free charging (offered as a form of promotion for local businesses).
In most cases, plug-in drivers are offered the option to pay on the basis of how long they remain connected to the charger, costing as much as several dollars per hour. But since most electric vehicle owners do the vast majority of their charging at home, the cost proposition of using a public charging station can be discouraging, particularly for drivers who rarely test the lower end of their cars' battery capacities. In some cases, the cost of charging at a public station can be as much as 10 times higher than charging at home during off-peak utility hours―making an EV more expensive to drive than many fuel-efficient gas cars.
The two publicly-traded companies in the market, CarCharging and Ecotality, have both seen their stock fall precipitously since debuting in 2010. Ecotality has fallen from a price of more than $6.00 per share to a low of less than $0.50 this week, while CarCharging has fallen from a high of $7.00 to its current price of $1.30 per share―and there's little evidence to suggest that the rest of the industry is doing all that much better.
The Case for Consolidation
If there is a promising path ahead for the for-profit public charge industry, it may come after a series of mergers and acquisitions like yesterday's. A lack of uniform charging rules and fee systems can be a deterrent to drivers who already see public charging as useful, but not entirely necessary to the daily use of their vehicles.
At this stage, many EV owners have to navigate multiple charging networks, each with its own membership plans, rates and RFID cards. Lack of standards and interoperability can create obstacles for EV drivers. As one example, a recent Ecotality study posited that the lack of standard public charging station signage deters usage. The equipment employed by the various charging networks can vary. Last week's report that GE's Wattstation chargers can do damage to Nissan LEAFs led to calls for a more standardized charging experience in general, and could hurt some drivers' confidence in plugging in anywhere but the familiar confines of their garages.
Strength in Numbers
The silver lining for the public charging industry is that despite somewhat disappointing sales so far this year, the plug-in vehicle market is almost certain to grow for the foreseeable future. That growth will bring a slow and steady stream of new drivers—an expanding market of customers wanting more and better public charging opportunities. These circumstances may require a shift, from a relatively large field of struggling companies trying to find a workable business model, to a shorter list of companies who have the scale and resources to make it easy and cheap for EV drivers to charge in public.
New to EVs? Start here
Seven Things To Know About Buying a Plug-In Car
A few simple tips before you visit the dealership.
Incentives for Plug-in Hybrids and Electric Cars
Take advantage of credits and rebates to reduce EV costs.
Buying Your First Home EV Charger
You'll want a home charger. Here's how to buy the right one.