Revenue issues, Part 4: It is not worth replicating the “pumping gas” service

In the previous posts of this series (Part 1, Part 2 and Part 3) I have discussed various points that directly contribute to the revenue and earnings of the EV charging business. In the last post of the series, I will discuss an issue that indirectly has an impact on how much money the customers spend. That issue is service design and more specifically, the underlying assumptions that are used in the service design.

The norm for “charging” ICE cars has been to “pump gas” at a service station when the car’s gas tank was getting empty. The location of the service station has evolved during the course of the ICE era, starting with downtown locations, but gradually moving to service areas along the highways, partly due to the traffic moving to the highways, partly for environmental reasons.

The key issue however is the behavior that people are used to. A trip to the gas station is something you do specifically for that purpose and one tries to do that as seldom as possible. This behavior should not be the model that the EV charging service is based on. The charging service should be available at the same locations that people will visit in any case, thus completely removing the “gasoline run” to the service station. These locations may be private residences, cafeterias, supermarkets, office buildings etc.

The charging will happen when the car is parked to ensure that when it is needed the charge level is as close 100% as possible. The behavior will resemble the behavior that people exhibit with cellular phones and portable computers, you charge when you have the possibility for it, not only when you absolutely need to.

What does this then mean? In the first phase of the infrastructure design, the poles need to be placed where the customers are likely to go. Supermarkets, parking locations and restaurants may be the likely candidates for charging stations as well as service stations who are more likely to make a profit on a cup of coffee that they sell you while the car is charging, not necessarily on the gas that they sell. In the second phase, we will learn what the best locations are based on the usage patterns and utilization rate. Monitoring and analyzing customer behavior will give us a better grasp of the right locations and capacity needed in those locations. This knowledge will empower us to make the right investments, thus increasing the revenues while optimizing the investment.

So trying to duplicate the service “experience” of ICE vehicles is not the best option. Instead the customers want the convenience and comfort of being able to charge while shopping, watching a movie or doing something else while the car is parked.

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