CarCharging Group Announces Acquisition of Ecotality’s Blink Network

By · October 10, 2013

Ecotality Bankruptcy

CarCharging Group emerged today as the winner of an auction for the rights to Ecotality’s assets following the defunct company’s bankruptcy filing last month. The amount of CarCharging Group’s bid was not formally announced but it is likely in excess of a $3 million opening stalking horse bid by Irvine, Calif.-based Tellus Power. Stalking horse bids are often negotiated by a company entering bankruptcy to ensure a floor price for its assets and ensure that lowball bidders aren’t able to win the auction in the absence of a serious contender.

Thankfully for Ecotality stakeholders—including the municipalities and thousands of plug-in vehicle drivers throughout the country—Ecotality not only found a serious buyer but one with an established EVSE network. CarCharging Group is a publicly traded company based in Miami, Fla. with a network of at least 1,000 public chargers. Last year, CarCharging Group acquired another failed charge provider, 350Green. Ecotality will make the fourth such acquisition of a competitor undertaken by the company since its founding.

CarCharging Group is scheduled to file papers with the bankruptcy court tomorrow explaining which assets it purchased and plans to maintain, but in a press release today the company announced that the acquisition would include “more than 12,450 installed electric vehicle Level 2 charging stations, the 110 DC Fast charging stations, and the Blink network.” The sale will not include Minit-Charger or ETEC Labs, two Ecotality subsidiaries involved in the manufacture, design and distribution of charging equipment.

Help May Be on the Way for Broken Blink Chargers

In a conference call hosted by the Los Angeles Economic Development Corporation and Southern California Association of Governments today, Howard Steinberg of Greenberg Traurig, an international law firm, said that Ecotality “had technical problems which resulted in damage to vehicles that they reported to the Department of Energy and the Department of Energy cut off further funding.”

Participants in the call included stakeholders and municipalities, many of which were concerned about whether Ecotality’s new owners would continue to honor agreements with public charge hosts after the acquisition, including the responsibility to service a growing number of broken and malfunctioning chargers in the network. Steinberg informed them that any purchaser that takes possession of those chargers would indeed be liable for servicing agreements, a condition that is likely to apply to home chargers in the Blink Network as well.

That could be good news for numerous EV Project participants that have been without home charging service after a recent flaw tcaused a number of Blink charge cables to effectively melt due to higher voltage charging. As Ecotality itself melted down over the last few months, those plug-in owners have been unable to get service from the company. How soon CarCharging Group is be able to remedy the situation remains to be seen, but expect to hear more from the company soon.

Is There a Future for Privately-Owned Public Charging Networks?

The cause of Ecotality’s downfall can be linked to a number of factors, but there's a basic reality underlying the bankruptcy: there is no demonstrated model under which public charging can be profitable. Ecotality received more than $100 million for the Department of Energy in addition to private capital from investors, but burned through that money quickly while bringing in minimal revenue.

CarCharging Group itself reported quarterly revenue from charging fees of less than $33,000 for the first quarter of this year, while shelling out millions of dollars for the depleted assets of Ecotality and 350 Green. Does the company have enough money to keep its rapidly-expanding network operational until it reaches profitability? With a share price of just $0.89 off a high of more than $6 two years ago, the market appears to have a clear answer to that question.

UPDATE: According to Dow Jones, Blink Acquisitions (presumably an investment vehicle set up by CarCharging Group for the purpose of the auction,) bid $3.3 million for Ecotality. The two Ecotality subsidiaries were also acquired in the auction. Minit-Charger was purchased by Access Control Group LLC for $250,000 and ETEC Labs was purchased Intertek for $750,000, bringing the total auction value of Ecotality's post-bankruptcy assets to $4.3 million.

Investors responded positively to the news, boosting CarCharging Group's stock value by almost 10 percent by day's end.

Comments

· · 1 year ago

Thanks for covering this story Zach.

· · 1 year ago

"That could be good news for numerous EV Project participants that have been without home charging service after a recent flaw tcaused a number of Blink charge cables to effectively melt due to higher voltage charging"

Huh!? Numerous? Home service? Cables effectively melt?? Voltage??
Were you trying to refer to the sub-0.1% of handles that demonstrated an ability to overheat when charging RAV4s at max (30A) current, which Blink mitigated, apparently successfully, by limiting said current in those units?

"there is no demonstrated model under which public charging can be profitable"

With drivers ready to pay $15+ for a quick-charge (yes I'm among them), L3 not only can be profitable, but actually is e.g. in Belgium: http://www.imsresearch.com/press-release/Electric_Vehicle_Charging_Stati...
One could also look at Tesla and its proprietary charging stations as another so-far successful business model...

· · 1 year ago

@Mr.O - Apparently there were reports of home users charging at 6.6kwh Or the full 30 AMPS on the crappy Blink J1772 plugs. I myself have had zero issues with the cord or handle. But have only charged at 16amps (3.3kWh) as my old LEAF and current VOLT only charge at that max. Most users have replaced their cords or atleast the J1772 plug/connector with another brand to eliminate the problem or reducing amperage to the unit.

------
Now On the flip side, If CarCharging Group takes over the EV Project with maintaining the units, will they extend "The EV Project" or are we null and void from the original contract? Different owners....Different deal? Guess time will tell, because I know there are many current owners who whouldnt mind selling their units if possible to get something different (in the cases they have serious issues)

· · 1 year ago

I love how that picture keeps popping up. Now that CarCharging Group bought them out, it's even more amusing.

Those EVSEs were installed by Synapse through a combination of state and federal funds. They were ripped out a few months later because they had issues, revolving around payments, and replaced with ChargePoints. Synapse then sold all of their EVSEs to CarCharging Group.

What I wonder is whether CarCharging Group might install quick chargers here, since they already own 90% of the public infrastructure.

· · 1 year ago

The underlying problem is still simple economics. My Volt is cheaper to operate on Gas than plugging in to a blink network charger. At home I pay .11 per KwH at night to charge my volt. 3.3 KwH charger, simple math, .33 per hour, and I get a real range of 11 miles per hour charging at home. The math is easy, using my average of 40MPG while on gas, at $4 per gallon, electricity is costing me about $1.20 to go 40 miles vs $4.00 on gas. That is a deal, and with the tax credits, economically justifies my selection of the volt.

Charging on a blink at $1.00 per hour minimum, rounded up has been abou the same as gas, when I can find a charger. Plugging in at the Carls Jr on my way home costs $1.00 even if I only use 30 minutes. That is the same as $8 per gallon of gas. Another "blink ism" is continuing to charge (bill) even after the car is topped off. I got a $16 bill for a single charge, with 10 other chargers sitting empty all day. Economically blink is more expensive so I quickly quit using them.

Beverly Hills gets it. Charging is free if you are there spending money. Many shopping centers are free or .20 per KWh. The city of Seal Beach is $1.00 per KWh. That is a whopping $3.37 per hour, or nearly $10 per gallon of gas to go the same distance. They don't get it.

In Europe as you cited with higher gas prices the economics get closer for private charging. The real trick like all mass reac businesses is to get the volume of use high enough that you can survive on a 3% margin like Wal-Mart. At $1.00 per hour competing with $4.00 gas it simply won't happen.

Blink needed to charge .30 per KWH, and use 15 minute increments or better 1 minute. 2 spaces for one charger would also allow the next car to remove the plug when the first car is fully charged. The rules are simple. When a car is fully charged, the billing stops. The charger then allows another person to wave their card, unplug and then charge their own car. The car manufacturers could easily change the software so the charge cord removal alarm only works with your personal 110v charger.

Until then, even Car Charging Group is going to have a tough time with profitability.

· · 1 year ago

I think Scott B has a good point . . . the free charging model (or a very low rate that is subsidized by charger installer) is going to be the one that works for slower chargers (Level 2 and less). The problem is that there are not enough EV owners for retailers to adopt the strategy to attract EV drivers. Once there are more EVs on the road then more malls & restaurants may adopt the strategy. After all, the electricity is very cheap and if you can get people to come to your attraction for several hours, they are more than likely to spend much more than that.

Perhaps combine the systems. . . . charge a fee or allow it to be free if you get validated by a retailer at the mall by making a purchase. Sort of the way some parking is handled.

Actually parking is the business model here since slow-level charging is more like parking than selling electricity since it deals with a car sitting somewhere for many hours. Sometimes you can charge for parking (ball games, downtown areas, etc.) and but very often is it offered for free to attract customers (malls, strip malls, big box stores, etc.)

Fast-charging is different . . . that is closer to buying gasoline model.

· · 1 year ago

Scott B is right. we are still 10-20 years away from the point that public charging business is sustainable.

When Nissan Leaf came out two years ago, MSNBC had an article praising it a fantastic (or Perfect) commuting car. Notice the last two words - "commuting car". for the time being, most plug-in cars are commuting cars. Tesla's not but their number is too small to make a difference.

· · 1 year ago

HXP:
I think we will see a major improvement in battery technology before 10 years. Probably 5 years or so, and ranges of 100-150 will be the norm as opposed to the 75-85 we are seeing now on a typical EV. For most people, if you can go 125 miles on a single charge, and have the ability to easily juice up on a QC unit, that would be way beyond a simply commuting car. But the point of a charging business being unprofitable, is probably valid, even if the cars have larger batteries. Level II is just not a viable strategy for making a significant profit. Level III though, just may be. If a larger battery means more electricity flowing in, and the price is based on how much electricity you actually take in(versus how long you spend hooked up), then there should be a way to profit from this.

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