One of the challenges of building a new business is to understand the size of the investment needed. This is even harder in a completely new business such as electric vehicle charging. There are very few facts for the investment planning as demand for the service is hard to estimate and revenue projections are anybody’s guess.
Therefore one would tend to err on the side of caution and minimize the investment. However, going with the minimum investment rarely produces the optimal solution in terms of customer satisfaction. And since early adopter satisfaction is crucially important for the proliferation of the use of EVs and the charging services, erring on this may prove costly for revenue growth in the longer term.
At AC2SG Software our approach in practice has been based on two principle criteria: 1) designing the service coverage based on projected customer use and once that has been done 2) minimizing the engineering and civil works costs for the planned infrastructure. Both of these steps require a slightly different point of view and set of skills, therefore team work is crucial in achieving the best possible results.
Service coverage design should encompass things like planned initial capacity of the infrastructure, distance to the nearest pole (measured in terms of time, not pure geographical distance), access to the infrastructure and service access in locations where people are likely to park their cars in any case (supermarkets, places of employment etc). One of the key things to remember is that EV charging is not comparable to filling an ICE vehicle with gas, in our opinion the charging service should be offered as a part of normal daily travel patterns rather than as a separate action that happens once a week. This part of the planning process should target at providing sufficient coverage and capacity for the initial set of EV drivers without considering the cost.
The second part of the planning process is based on the results of the first part. The approximate pole locations need to be reviewed against the current electricity grid plan and distances from transformers, lengths of cable and civil works should be minimized by moving the poles to the most appropriate locations. The savings here can be very significant since in a typical case the cost of the pole itself might be as little as one third of the overall investment. Ideally the poles can be placed in locations that require very little civil engineering, thus saving significantly on the cost without sacrificing the service level.
To help with this work, our EVPlanner software can be used throughout this process. The use of a tool to co-ordinate the work and share the results allows iterative development of the plan, the use of multiple different skills as a part of the planning process and increased flexibility of the planning process. The ultimate results is that the plan is of better quality, the investment is optimized and there is a clear baseline for the investment decisions.
This approach will help with the assumptions and discussions related to the investment decision as well as reducing some of the cost. The key is to focus on the service launch, how things move on from there is worthy of another blog post as the focus shifts from optimizing the investment to maximizing the revenue. Stay tuned!