Plugged In: The Last Mile
Who will build out and pay for electric vehicle public charging infrastructure?
Utilities believe the utility infrastructure is well prepared to meet charging electric vehicles (EVs) across the country as shown in 2012 report, Charging Ahead: The Last Mile — Is the U.S. electric infrastructure ready to support one million electric vehicles? (Charging Ahead)
The next questions have become, "What can, or should, utilities do to prepare for the future; and what role should they play today in driving EV adoption?"
Plugged In: The Last Mile
This new report demonstrates that EV charging infrastructure can be effectively rolled out, with future earning opportunities available to utilities and other third parties willing to invest in public charging stations. The research indicates that the key to profitability depends on various pricing models and the level of EV penetration. Present trends draw into question whether adequate levels of penetration can actually be achieved, absent subsidies, to offset infrastructure investment cost.
The build out of public charging stations is important to help allay "range anxiety" — the EV drivers’ fear that the range supported by their battery’s charge is inadequate to support their driving patterns. The availability of grants and seed money from federal, state, and local municipalities has increased the number of installed chargers in recent years. However as these funds are slated to run out in 2013, it is now time to address the question of whether there is enough incentive for private sector participants to keep expanding and maintaining charging stations in the absence of government grants.
- For the EV infrastructure investor, what is the single most important factor influencing the amount of revenue required for payback on an EV charger?
- How are retailers, employers, and other organizations working with the electric charging station manufacturers? What are the drivers motivating them to make EV chargers available to the public?
- What are the important elements to consider when choosing a pricing model to use for public EV chargers?
- What lessons can be learned from California, which is leading the nation in building out the public EV infrastructure?
- Should utilities be more involved in the business of building out the public charging infrastructure?
In summary, there are a number of good business reasons to charge ahead in completing the last mile of EV charging infrastructure, and utilities would do well to take notice. The investments and decisions being made by the private sector and municipalities in building out this infrastructure will someday affect utilities’ systems. Alternatively, they could be missing out on opportunities to grow their business and diversify their revenue streams as more EVs are sold in the U.S. passenger fleet.
Plugged In: The Last Mile and Charging Ahead: The Last Mile consisted of primary interviews as well as an online survey targeted at utilities regarding their preparations for EVs. More than 70 entities, including utilities, retail businesses, electric vehicle equipment suppliers, state and local government agencies, and trade associations, participated in the overall study. The study was supplemented with secondary research, including academic studies and publications. The study follows a report Deloitte published in Fall 2011 on consumers’ attitude toward EVs and their likelihood of purchasing them, titled Unplugged: Electric Vehicle Realities Versus Consumer Expectations.
Learn more by downloading the full report available above.
As used in this document, ‘Deloitte’ means Deloitte LLP (and its subsidiaries). Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.