The Race to Lock Down Electric Car Charging Real Estate

By · August 21, 2011

Mall of America from above

The Mall of America, in Bloomington, Minn., is the country's largest mall in terms of retail space—and has nearly 15,000 parking spaces. Today, four of those spots provide EV charging. Car Charging Group is prepared to add a lot more charging spots when electric cars become popular.

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.

Assumptions, Courage and Vision

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.”

Riding the Cost Curves

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.

Electric car charging at Walgreens

When Walgreens starts to offer EV charging, it could cost $3 an hour, a lot more than the cost of charging at home. It's uncertain how those prices will change over time.

“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.

Comments

· Leaf Owner (not verified) · 3 years ago

Since electric cars can easily be charged at home, I don't see drivers paying for Level 2 charging. I believe Level 2 charging will be mostly free and used to attract customers. I can see individual businesses providing free charging to customers and considering it to be an advertising expense. Much cheaper than all the coupons sent out now. Malls and shopping centers may provide free charging all the time and divide the costs among the tenants. After hours, they may charge a nominal fee, but nothing like $3 per hour. I believe the only business model for a pay-for-charge service will be for Level 3 quick charging. People will be willing to pay for the convenience of a fast charge far beyond the cost of the electricity.

· · 3 years ago

I might pay $3 to charge up, if it were a solar powered fast charger. One day there will so many L2 EVSEs available free to use, at a variety retailers, that I don't think the "for fee" model will work in most situations.

· · 3 years ago

I have to agree with CCG’s bet. I don’t see a sustainable business model for QuickCharge, unless the utilities reform demand charges. Unlikely without a cheap power storage capability. I think you will see public L2 charging develop as a pay-to-charge convenience, abundantly available, infrequently used. If this turf contracting eliminates competition, the price will be high.

· 54mpg (not verified) · 3 years ago

"the lion’s share" is actually 100%. :)

· Tom K (not verified) · 3 years ago

I would only be interested in paying for quick charging. Level 2 is not worth the wait if I have to pay for it. An example would be spending my time and money at the mall. The juice should then be free...

· Anonymous (not verified) · 3 years ago

I'm making plans to move to a third world country where public transportation is available and purchasing a bicycle. Property taxes are lower, healthcare is good seems like Costa Rica or Ecaudor is on the radar

· Philaphonic (not verified) · 3 years ago

No one in their right mind would pay $3 an hour for routine car charging, but Murphy's Law virtually guarantees that sooner or later, all electric car drivers will have a critical need to charge up when they are too far away from home. In that situatoin, I would certainly, if not happily, pay the price. How often these critical situations arise will determine whether their business model will succeed or fail.

· · 3 years ago

For us, $3/hr. would be worth paying on those regular occasions when we are "stretching" the range of the LEAF and need just a couple of hours or less of extra charging to make it home. The overall economics would work out for us because the bulk of our charging would still be done at low rates.

I'd rather pay $3/hr. to charge in front of Trader Joe's or a good Thai restaurant, for instance, than charge for free at a Nissan dealer (much as I am thankful to be able to do the latter).

On the other hand, $3/hr. is a lot to pay if you are staying in one place and need to charge for several hours. Driving a fuel-efficient gas car would certainly be cheaper.

· · 3 years ago

I tell you what, if it makes a difference of getting home of not I think just about everyone will pay. It's like buying a quart of oil at a gas station. You pay double what you would pay for it at an auto parts store, but you need it.

I don't think most people will be looking for public charging as a means to get through their typical day. If once in a while you have pay an extra $10 for some juice, so be it. You are still way ahead in fuel costs in the long run.

· · 3 years ago

Where this would make a difference is when someone wants to regularly charge at work. For them one option would be to park in a nearby place to charge 8 hours. That would be possible only of the charging isn't $3/hr at L2 rates.

· Bubba (not verified) · 3 years ago

While normal charging would be nice, I think what I would really be willing to pay for to charge my Leaf is a quick charge while traveling. I am in the phoenix area, and if someone were to put quick charge stations in casa grande, and in black canyon, I would be able to take the car to Tucson, and also to Prescott and Flagstaff. Now that would be adding a lot of usability! And it would only take 2 stations to do it.

Somebody should push starbucks to add these. Makes perfect sense. Charge up the battery while you get and drink your latte.

· Tom (not verified) · 3 years ago

Wired Magazine article asks "where will we plug in?"

http://www.wired.com/autopia/2011/08/ev-charging-infrastructure/

· · 3 years ago

@Tom,
From the article, "Most of these vehicles will be located on the coasts, but here too EVs do not pose a threat. An electric vehicle draws about 700 or 800 watts, which is roughly what two flat-screen TVs require."

This guy is a bit off on his numbers.

· · 3 years ago

@Michael,
700 - 800 watts isn't too far off of the average draw of an EV if you assume 30 miles driven per day.

30 mi/day / 3 mi/kwhr / 24 hr/day = 416 w. This means that 700 to 800 watts is a bit pessimistic.

However, note that this would assume the car is always plugged in and drawing this current. The peak draw would be much more. This amount could be used to predict whether transformers can cool enough overnight.

· Mike Salkin (not verified) · 2 years ago

Not all countries have these kinds of cars but it would be more convenient for us to not depend on fuel. Through this type of cars we can save a lot of money and more environment friendly. The bad thing about these cars is they are high priced and only the higher class can afford to buy one of these. - Mike of http://www.mikesalkin.com/

· Jason 1 (not verified) · 2 years ago

It is the cost saving plan and I would like to accept it.

· serviced office (not verified) · 1 year ago

The charging of electric cars is having a deep impact on the real estate. Read the post to now more

· Bill Howland (not verified) · 1 year ago

Didn't "Mall of America" just go bankrupt?

· Real estate attorneys Costa Mesa (not verified) · 1 year ago

Real estate laws cover the rights to own, lease, use, and enjoy land and the permanent manmade additions attached to it - homes, barns and other buildings.

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