One of the biggest obstacles to getting more electric vehicle adoption in the marketplace has to do with EV charging stations. There’s a great article in the Wall Street Journal about why there aren’t more charging stations. It’s not just a matter of rollout and the number of companies putting EVs in service. There’s actually a great deal of headwind against putting out more charging stations for a variety of reasons.
For example, there’s tension has erupted between businesses such as gas stations, convenience stores, truck stops, and utility companies over who gets to sell electricity to drivers. As an example, in some jurisdictions, the electric company wants to be the one who puts these charging stations in place. So they’re lobbying to be the provider of these charging stations and have the licenses and the permits. But at the same time, there may be a gas station that also wants to do it. The problem is the gas station is hesitant to go ahead and put in charging stations because they have to buy the electricity from a competitor from a company that actually wants to also have charging stations. So it’s very difficult to put in millions of dollars of investment into infrastructure to build the chargers if you’re not sure if the partner you’re buying electricity from wants to drive you out of business by charging you too high of a rate to fund the electricity for those chargers.
The utility companies know this, there are monopolies in most markets where there’s only one electric company and they want to own and operate the chargers extending electricity sales into a new market. They have a competitive edge because they have the approval of the state utility regulators. They can pass the cost of infrastructure to all ratepayers, meaning that when they build these charging stations they can add that as an expense to their entire business and the electric rates that people pay at their house at their business. Even for electricity not used for chargers, that rate absorbs the cost of building the chargers. A private company that wants to put chargers in a gas station or convenience store doesn’t have the luxury of passing along that investment to the other part of its business.
There’s a gas station in Minneapolis that wants to build it but the utility company called Xcel has asked regulators to let it build, own, and operate 730 fast-charging sites within the next two years. That will be almost half of the market in Minneapolis. The $193 million costs would be paid by ratepayers so the electric company really doesn’t have to come out of pocket to build all these chargers. And there’s another obstacle for the private sector for example a convenience store because EV charging requires a surge of power. Gas station owners say their monthly bills are spiking by hundreds of thousands of dollars because of that surge in electricity. Electricity rates for most commercial use are done on a metered basis so the rate you pay is dependent upon how much it fluctuates. If you have big fluctuations in your electric use, your bill is going to be much higher. The last problem is, what happens in rural areas? Who’s going to put in chargers all the way out there? According to the article who will want to build and operate chargers along remote highways? They will have to operate at a loss for many years because there are not going to be a lot of people using them and paying to charge their vehicles.
So the rollout of these chargers is going to make a big difference because right now about 1% of US drivers own EVs, but wait lists are growing and automakers are expecting EV sales to keep rising. The problem is there’s already a backlog of places to charge your vehicle. There are people that have to wait sometimes half an hour or 45 minutes just to be able to plug in, plus the long charging times. So the rollout of these charging stations may seem like a no-brainer. Why not just build them? There’s a lot of regulatory red tape that’s behind the scenes. Some people are even saying that there should be government subsidies or the government should build these at taxpayer expense. Let us know in the comments what you think about how the electric vehicle charging systems should be created and how they should roll out for the adoption of the vehicles.