Expanding EV Charging – Some Practical Issues

Courtesy of Volta Charging

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.

Map Courtesy of Volta Charging

“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.

Photo Courtesy of Hardy Chevrolet Buick GMC in Dallas, Georgia – Go Visit them today!

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.

Photo Courtesy of Volta Charging

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!

In The News

Will the Chevy Bolt recall change EV adoption?

Last week GM’s CFO reassured Wall Street that the company will recover the over $1 billion cost of the Chevy Bolt EV recall, with the battery maker, LG Chem, paying GM back for the expense. While as an automaker, recovering direct costs from suppliers for warranty expenses is a routine matter, this is a high profile, high visibility situation for GM. The company has made tremendous progress moving toward an all-EV product line-up, branded their battery system the “Ultium” (which is pretty cool branding actually),  and even changed the corporate logo to be more hi-tech looking. Will this recall cause any slow-down in EV adoption for GM? I say short-term yes, long-term no, for three reasons.

First, the transition to electric vehicles is happening globally much more rapidly than most previously expected, and this will not slow down for some recall events here and there. EVvolumes.com has reported that in the first half of 2021, global EV sales were up 168% over last year. Of course, the global pandemic had a dampening effect in the first half of 2020, but this is still much more growth than the mainstream auto market. It seems like we are finally “crossing the chasm” as technology adopter guru Geoffrey Moore famously put it in his seminal book of the same name. There is no looking back now.

Second, automakers have had many brushes with bad PR due to perceived safety issues and always gotten beyond them. Ralph Nader made his name by attacking a GM vehicle, the Corvair, in the 1960’s, and GM overcame this issue. Audi in the 1980’s suffered sales declines due to perceptions of “sudden acceleration” in some of its models, and now Audi is a very strong brand in the US market. Toyota even had some of the same issues with perceptions of sudden acceleration a few years ago, and this does not seem to be an issue for consumers who are still buying Toyota’s. Overall, these kinds of issues do affect the short-term sales of a model, and the brand as a whole, but longer-term they are soon forgotten. The global chip shortage will probably have more effect on GM’s EV sales near term.

Finally, consumers are changing and their expectations will need to be met by progressive companies, and offering EV’s will be a requirement. Tesla has had some bad press a few times along the way but overall they have built a very positive and favorable image for themselves among consumers. Customers like Tesla’s large touch screens, over-the-air-software updates, and “autopilot” automated driving technology. They are looking for similar features from all other EV choices, and the winners will be those that provide the best value which can be thought of as the Total Experience divided by the Total Cost. Savvy consumers will continue to drive the automakers to supply EV’s loaded with hi-tech features and that need little maintenance.

In the end, yes, this is a stumble GM could have lived without, and it is great that they will recoup some costs from their supplier. But consumers now have a taste for the future of “mobility” and EV’s are a critical part of this. More EV’s for sale by more OEM’s will be required, and GM will continue to drive much of the progress. Let’s help them change the planet!

News Source:  https://www.thestar.com/business/thestreet/2021/09/10/general-motors-stock-jumps-as-cfo-sees-battery-recall-cost-recovery-stable-chip-supplies.html?es_id=7968cdc9b4