The limits to the demand for public charging stations

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Since the electric vehicle issue returned to the public debate a little more than ten years ago, the question of public charging stations has been a recurring one. Whereas, in ten years, it has been noted that recharging is mostly done at home or at the workplace and that recharging at these terminals is very marginal and therefore very difficult to ensure under defensible economic conditions, it continues to be made a sine qua non for the development of the electric vehicle. It is time to mature this debate and to move away from this sterile rhetoric in search of sustainable models in which the manufacturers would take their responsibilities and stop deferring to the public authorities.
 
It was thought or hoped that the old strings of anti-EV lobbying would be put away this year and that, accompanying the forced take-off of demand, manufacturers would be content to rejoice in the massive aid they have received (and will continue to receive) to make this happen.
In fact, when they wanted to show that customers were not mature, it was only fair to insist on the scarcity of charging solutions on the public highway: in the chicken and egg debate, they demanded that the hens that the terminals are for them be installed with public funds before they decided to put eggs in their catalogues. The European Union had set a target ratio of 1 "public" terminal for every 10 EVs, and in France, in 2018-2019, we were there and we were even doing a little better.
 
Today, we are no longer at this stage and all the stakeholders must stop passing the quid and take a serious look at the issue. ACEA is not there yet and seems determined to stay in the old world.  
 
The fact is that during the first few months of this year, we have heard much less from manufacturers about the insufficient number of terminals: in 2020, since it was imperative to bring their average emissions below 95g, they have somewhat zapped the argument and, rightly so, the salesmen praised the economic and practical interest of home recharging and told customers that terminals were not so rare and often under-used and, therefore, easily accessible.
 
They were quite right, because out of the 30,000 or so kiosks installed, the average number of recharges carried out annually remains very low and makes the return on investment more than improbable, even if we look ahead 5 or 10 years.
 
In the very large work carried out by Coda Stratégie in 2018-2019 for the DGE, the Ministry of Ecological Transition and the Ademe on recharging infrastructures for electric vehicles (IRVE), the average for 2018 was given at 86 and the authors noted: "The majority of the sample shows between 20 and 50 recharges per terminal per year, but this relatively low figure hides significant disparities between particularly used terminals (in some cases less than 20% of the total fleet) and terminals with a very low rate of use. In all cases, the figures are likely to rise: no respondent reports stagnation or a drop in the use of recharging infrastructures and in most cases, the growth in usage is significant". It is conceivable that, under these conditions, those responsible for the proliferation of the hens may have been slightly scalded and curbed their ardour while waiting for the eggs.
 
In fact, according to the same report, in economic terms, those responsible for these IRVEs can generally, at best, dream of achieving what they call the "small balance" - which would consist of covering operating costs or Opex by paying for the refills - but it is very difficult to achieve the real balance which would also allow investments to be financed (Capex).
 
This is already true in a context where it is mainly "normal" charging stations that are or have been installed. This is even more true, of course, for the fast charging stations, which Coda tells us represent five times higher investments (25,000 euros compared to 5,000). As the managers of such infrastructures for the department of Maine et Loire testified in December 2018 during a round table organised as a follow-up to the OPECS report, the economic balance in this area seems impossible to find. 
 
Jean-Luc Davy, President of the Association of French Mayors of Maine-et-Loire and of the inter-municipal energy syndicate of the same department (SIEML), drew up the table as follows: "On the one hand, 2.3 million euros of investments, from which the subsidies of the PIA (50% for the 22 kW terminals and 30% for the fast terminals) and of the Pays de la Loire region must be deducted. In addition, there is an annual operating budget: 100,000 euros for operation + 50,000 euros in communication costs. On the other side of the balance, no more than 30,000 euros in revenue for 2018". 
 
For his part, Emmanuel Charil, SIEML's Director General of Services, was surprised by the difference between the situation on the ground in 2018 and the estimates that had been made, in 2014, for 2018: the number of electric vehicles increased during the period from 400 to 2,000 units (compared to the expected 2,600). The forecast error was not major at this level and Emmanuel Charil noted that the installation of the terminals was justified in this way : "The development of sales of electric cars, he noted, is correlated with the pace of network deployments. The highest penetration rate corresponds to the first territory to have inaugurated a terminal, the lowest is in the last". On the other hand, what shocked him the most was the number of subscribers, which is not there: in its projections, the SIEML had estimated that all the electromobiliens of the department would have become subscribers to the network, that is, according to the number of EVs currently in circulation in the department, 2,000 badges to be delivered. In September 2018, only 386 users had registered with the Maine-et-Loire energy union. 
 
This is a measure of the difficulty. People talk so much about the bollards and believe they are so badly needed that their existence is willingly presented as a necessary condition ex ante. On the other hand, their actual use is marginal and is so marginal for a large proportion of EV owners that they seem content to look at them. One wonders whether it would not be enough to install dummy terminals to achieve the desired effect.
 
Faced with such a situation, the first temptation is to try to stimulate ridership by charging very low prices, otherwise the rate of use could well be even lower. If this does not lead to a boom in usage rates, and the operators are not able to achieve a "small balance", then the operating costs are cut and the dummy kiosks are likely to be defective.
 
At a time when the growth in registrations is accompanied by a call for the multiplication of recharging points, these questions remain unresolved, and simply calling for public investment for the installation part and public financing of a recurrent operating deficit is a rather short answer from the manufacturers who, moreover, are the champions of liberalism and do not lose an opportunity to crack the "fiscal bludgeoning" of which motorists would be victims. 
 
The debate over Ionity's pricing policy when the consortium announced its increases for early 2020 at the end of last year could help to mature both sides.
 
Rapid charging on motorways requires very heavy investment and high operating costs to maximise the rate of service and deliver services that meet motorists' expectations.
 
Given that this is only a very small part of the annual recharging that an electric vehicle owner will carry out, and since this market is rather captive and currently corresponds to "lead users" who are not recruited from the "top deciles" of income of the population - who do not use the motorways - it is not absurd that recharging is then expensive. It is just as coherent that the manufacturers who wish to make it a sales argument believe that they can and must participate in the balance of the business model and seek to improve it.
 
The same reasoning can be applied to normal and quick refills on the public highway: they are marginal and involve much higher installation costs than those associated with refills at home and/or in the workplace or at the place of consumption. It is therefore logical that they should be managed as marginal or exceptional, and it is absurd to demand that, for a few households that do not live in single-family housing and have no alternatives to work or co-ownership and are therefore deprived of access to EV, a model that consists of multiplying the number of under-utilised terminals and charging for top-ups so that these households can electrify their mobility and benefit from the same TCO as the others is preferred.
 
If it is a target that the constructors believe is a priority, they must be able to offer packages that include in the monthly payments access to public car parks equipped with terminals and with the operators with whom they will make agreements. There is enough to be done so that the other targets electrify their mobility so that we do not get bogged down with these problems, which are, after all, marginal. If manufacturers think differently, then they will only have to structure sedentary recharge Ionity species.
 
ACEA's attitude, reiterated in early November, once again appears to be in line with the positions of the more conservative or less proactive manufacturers.
 
It comes at a time when a player such as Hyundai has announced its support for Ionity and when private operators such as Total are asserting their desire to make recharging a core business.
 
On the one hand, some people cling to an analysis which consists in considering that electrification has been imposed on them against their will and gives them arguments to argue that it is not up to them to facilitate its development. On the other hand, we are dealing with actors who consider that competition requires them to propose solutions to their actual or potential customers that will provide opportunities to recover value. There is good reason to believe that the latter will be right against the former.
 

The weekly column by Bernard Jullien is also on www.autoactu.com.

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