This week General Motors announced plans to invest $750 million to help provide 40,000 new electric vehicle charging stations starting in 2022 through its GM dealerships, and said that 90% of all American’s are within 10 miles of one of their automotive stores. It’s terrific that GM is making this commitment to EV charging in addition to the $35 billion major product investment it previously announced. Let’s look at a couple of the issues they will need to think about to make their charging network plan deliver on the promise.
The Urban vs. Rural Experience
GM has dealers all over the country, serving rural areas most importantly. EV adoption needs to happen in rural places too, but other than home charging networks, there are just not yet many office buildings and retail locations with chargers in small communities. Shown below is a map of a major charging company, Volta, and their current and near-term charger locations. Notice that major metro areas are where these are all going. So GM can fill a valuable need by leveraging its small town dealers to fill in the gaps.
“We want to give customers the right tools and access to charging where and when they need it, while working with our dealer network to accelerate the expansion of accessible charging throughout the U.S. and Canada, including in underserved, rural and urban areas,” said GM President Mark Reuss in a statement.
But there will be a major difference between who is providing charging stations in rural places, with those in urban locations. While most urban and suburban EV buyer’s will have access to a charger in their home, apartment building, or even their office (if they are still going there), and they can now use a myriad of networks, most people may find that charging is an adjunct to a destination they are already visiting. Going to Whole Foods, or a multi-retail location to shop for groceries and other services, and plugging in to top up your car while you are there, may be the normal use case. When presented with a choice within a few miles, of a multiple-charger bank in a food or services retail store parking lot that they already have decided to visit, or a GM dealer that may have more chargers available but only has accessories and floor mats to shop for, the customer may choose the food and services retailer most of the time. So in urban locations, while GM dealers may be great locations for chargers, the customer will need a different experience that most auto dealers provide today. Free coffee is not enough.
For rural EV buyers, it may be terrific that the local GM dealership, which historically supports the town’s Little League Team, Fourth of July parade, and just about every other civic activity, is now the center of the EV charging experience. It would make a lot of sense as well, for these dealers who are sometimes on the edge of town, to partner with the local Wal-Mart or Dollar Store to provide EV owner’s with a free shuttle to these retailers while their car is charged. This saves the stand-alone retailer from investing, and provides them with some captive shoppers for an hour at no real effort. The GM dealer then becomes a mobility center in some ways within the community, and could easily expand on-demand shuttles to other users too. This may be more than the local dealer wants to do, but they will have little competition from banks of retail chargers, unlike the urban dealer. Rural dealers can leverage their facilities and locations to lead on EV adoption in the community, and EV pick-up sales might benefit the most from local dealer’s stepping up to convince traditional buyers that EV’s can be easy to live with. GM dealers have to help GM get the change to happen, one customer at a time.
Cost Differentials
Buyers of EV’s in urban and suburban locations will have many choices for chargers sooner than you think. And many of these chargers will be free for the first 30 minutes or longer. Much of this is because a bank of chargers in an outdoor retailer strip mall can be used for advertising, point-of-sale information, event, discount messaging, or even saturation with a national brand’s messaging. Retail charging locations in urban areas will have lots of ways to subsidize the cost of a charge, and will be competing with each other for visits. Finding and paying for a charger will be relatively simple for the urban EV owner.
In contrast, it will be awhile before we see many chargers in smaller and rural communities. There may be a couple of chargers, but if they are at the local Chevrolet dealer, then their advertising value accrues to the dealer, primarily, and he or she presumably has much cheaper ways to advertise. So it’s likely that the rural EV driver will be paying more directly for the charge, with less subsidy available. Smart dealers will assess the market penetration of EV’s in their area, using DMV data or other available information, to understand how they can pull in the multiple-brand EV buyers in their community, making “first 30 minutes free” charging or other draws to get the hook-ups they need to make charging successful. Will non-GM EV drivers feel ok to charge their EV at a GM store? I think yes if the experience is safe, easy, and cost-effective. But the cost will not be reduced by advertising in these situations. It will be because the GM dealer thinks creatively about how to attract and serve the community. Since this is something local dealers have been doing for over 100 years, I think they will figure it out too.
Conclusion
We see a divide in our society between urban and rural sometimes culturally. But EV buyers have the same needs wherever they live. They want to find a place to plug in that is safe and cost-effective, and if they can do it while taking care of other things it will be convenient too. I have great faith that the push GM is making to add chargers nationwide, will find great partners with rural dealers as these community leaders change rural resident views on electric vehicles. Maybe The Heartbeat of America just needs a little jolt!
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