How do you know that electric car charging is hitting the mainstream? Because high-profile places like Walgreens and Mall of America are installing EV charging units . These locations are taking an intriguing approach to EV charging infrastructure: outsourcing.
Instead of buying and operating electric car equipment, property owners hand over parking spaces to companies that own and operate all the equipment and services. The drugstore chain is working with Car Charging Group, 350Green, and NRG Energy to handle EV charging services—including setting and collecting fees—for 800 spots.
To get a better understanding of how these companies work—compared to more well known charging infrastructure and equipment companies, such as Coulomb Technologies and Ecotality—I spoke with Michael Farkas, CEO of Car Charging Group (CGG).
“We’re technology agnostic. Today, we use Coulomb Technology’s product. When something changes or develops, or charging times get faster, or someone comes out with the next charging gadget, we’ll be there,” said Farkas. “That’s what differentiates us. We’re not here to pitch a specific product.”
The company is barely known, despite the fact that it’s nearly two-years-old and has invested about $3.5 million. Car Charging Group’s main value proposition is allowing its customers to start offering EV charging without making a capital outlay. The company pays for the equipment. It maintains, services and upgrades that equipment. Then, it provides monthly reports to the property owner and sends them a check based on a small percentage of the charging fees, currently charged at about $3 an hour. “Car Charging Group keeps the lion’s share,” said Farkas.
Car Charging Group gladly pays the upfront costs, while earning relatively low pay-for-charge fees, in exchange for locking up seven years of rights to parking spots, with multiple potential renewal periods. “Our game today is locking the locations down, and sprinkling units all over the place to alleviate range anxiety,” Farkas told me. “As more cars are sold and more units need to be installed in those locations, we’ll start installing them. That’s our model.” For example, CGG installed only four units at the Mall of America, but that site has nearly 15,000 parking spaces.
In other words, Farkas is securing rights to some of the best parking real estate in the United States first, based on the assumption that at some point in the future, all the uncertainties about EV markets, technology, and infrastructure will be sorted out—and fall into the company’s favor. I asked him if that took courage. “It doesn’t take courage. It takes vision,” he replied. “The capabilities of an electric car, once all the components are mass produced, are far superior to an internal combustion engine.”
Beyond a faith in electric car technology, CCG’s model is based on the assumption that the size of the EV market will grow well beyond forecasts calling for electric cars to represent 4 to 5 percent of new car sales by 2020. “I believe those are conservative numbers. If auto companies can put out products, such as the Tesla Model S or the Fisker Karma, even the Ford Focus Electric, I believe they’ll sell a lot faster than we think. Not to say that I’m a prophet, but I see how automotive markets work and go. And I believe that you’ll have a lot more electric cars than the current estimates.”
Today, CGG charges roughly $3 an hour—regardless of how much energy any specific car is able to receive. In these early days of the EV market, many other public locations still offer free access to relatively inexpensive electricity . But Farkas believes that free public charging, and even subscription-based services for public or home charging, will be short-lived.
“Today’s pricing structure is $3 an hour, but it’s not going to be like that in the future,” Farkas said. He believes that EV charging will become more like gas refueling. “When you go to a gas station and buy a gallon, you know exactly how many gallons you get and what’s in that gallon. I believe a fair measurement system, like a gallon or liter today, that’s ultimately the same type of system will use for electricity and charging your cars.”
Farkas also believes that EV drivers will pay for convenience. “When you go into a supermarket, you get a can of Coke for 50 cents, but when you go to a machine in public, it might cost you $2. We’re used to that,” he said. “You’re paying for that Coke to be cold and available to you.” He believes there’s a “happy medium” to be found for how much EV drivers should be charged at public locations. "The industry will work it out."
If and when that happens, Car Charging Group could be operating one of the largest networks of electric car charge points in the United States. If Farkas’s assumptions pan out—multiple millions of EVs on the road and the ability to charge decent rates, especially in urban areas where many people don’t have access to a private garage—the numbers will align. “It’s going to take some time,” said Farkas.