Taking Charge

Retailers mull electric-vehicle charging stations, await increase in consumer demand.

By  Samantha Oller, Senior Editor/Special Projects Coordinator

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Which came first: the electric vehicle (EV) or the charging station? That’s the question c-store retailers may be asking themselves as the buzz on EVs intensifies, thanks to the introduction this fall of Chevrolet’s Volt hybrid and Nissan’s Leaf EV.

Kum & Go L.C., West Des Moines, Iowa, was one of the first c-store retailers to install EV charging stations. CEO Kyle Krause has said that Kum & Go owns 50% of the EV charging stations in the state of Iowa—or two out of a grand total of four. “The distance between the two sites is too great to drive on a full charge,” he said during a panel at the most recent NACS Show.

Krause described the market as “evolving,” and that Kum & Go is still figuring out its approach. Both of its locations are LEED-certified, and the charging stations provided points toward certification. Meanwhile, many of the retailers that already have LEEDcertified sites, including Rutter’s, Quick Chek and The Pantry, have not installed charging stations, largely because of the cost and lack of a market. But with the 2009 launch of the U.S. Department of Energy’s EV Project, which aims to establish an infrastructure of 15,000 charging stations in 16 major cities in six states and the District of Columbia, other c-store retailers have announced plans to enter the market.

In Tennessee, Murphy Oil USA will be testing DC Quick Charger EV charging stations from Eaton Corp.

Beginning in March 2011, DC Fast Charger charging stations from ECOtality will be installed at BP and Arco locations around pilot markets in Arizona, California, Oregon, Washington and Tennessee.

The Spinx Co. is installing charging stations from Coulomb Technologies at five locations in South Carolina, including sites in Greenville, Columbia, Moncks Corner, Greer and Spartanburg. The installation is being overseen by distributor Thurso Power Systems. As Melody Hudson, Spinx advertising and public relations manager, explains, the installation “was another way for us to serve our customers. Our entire platform is built around ‘making life easier,’ ” she says, referencing the retailer’s tag line. “This was an opportunity for us to service additional customers’ needs.” Fueling the opportunity is $230 million in grants and generous state and federal tax incentives. A federal tax credit on 50% of the installation cost for an EV charging station is available until the end of 2010. For large installations, businesses could take tax credits of up to $50,000. And buyers of electric- drive vehicles can earn tax credits of $2,500 to $7,500, depending on the size of the battery.

EV proponents are hopeful these incentives will be extended to keep the deployment rolling. But they acknowledge that, for the technology to be competitive, it needs to make economic sense without the support of grants and rebates.

THE DEMAND

The Obama administration aims to have 1 million EVs on the road by 2015. While there are no official figures on the number of EVs on the road today—most DMVs do not track a vehicle’s propulsion type, and many EVs are conversions—they number “a few thousand,” according to Plug-In America, a San Francisco-based coalition of EV drivers and advocates.

This number will jump with the November launch of the Nissan Leaf and Chevy Volt, which stack up well competitively, says John Gartner, senior analyst for Pike Research, a Boulder, Colo.-based market-research group that specializes in renewable energy. The Nissan Leaf is 100% electric; while it has a shorter driving range, it also has the marketing advantage of zero emissions. The Volt is a plug-in hybrid, extended-range vehicle, and because it has a gasoline engine, it offers more of a familiar driving experience.

“Both have been well received and well reviewed, and are having no problems getting customers to sign up and pay a reservation fee for the vehicle,” says Gartner. “It’s going to be a definite demand-side market in the near term, at least for the first year or 18 months.” Nissan has reported 20,000 reservations for the Leaf and was not accepting any more as of press time. The Chevy Volt, which will not be available nationally until 18 months after its November launch, reportedly has a waiting list of 50,000.

 The appeal of the technology for EV enthusiasts is multi-dimensional.

 “For me, with an engineering background, it’s rare that I find a solution that solves a whole bunch of problems at once,” says Chad Schwitters, a director on the board of Plug-In America and a former mobile-software exec who owns a Tesla Roadster EV, an older-model Toyota RAV4-EV and a converted Toyota Prius.

“I get environmental and economic benefits, and benefits to U.S. energy security,” he says. In addition, he claims a more pleasant driving experience: The EVs are quieter, have a smoother acceleration and emit no smelly exhaust. “And having a full ‘tank’ every morning, so to speak—not having to go to gas stations—I sure don’t miss that.”

 A growing group of EV drivers is also drawn to the economic benefits of the technology, including lower maintenance costs and the fact that electricity is cheaper than gasoline. The simpler design of EVs—which have about one-tenth the parts of a gasoline-powered car—mean they tend to break down less often. Schwitters’ 8-year-old RAV4- EV, for example, has needed only to have its tires and wiper blades replaced. The five-year operating cost for a Nissan Leaf, meanwhile, is estimated at around $1,800, compared to $6,000 for a gasoline-powered vehicle.

That second selling point—cheaper fuel—is not as compelling an argument, Schwitters concedes. While a full charge may cost an EV driver only $2 worth of electricity, compared to a $30 tank of gasoline, it is tough for some consumers to get past the higher upfront cost of the vehicles. Indeed, interviewees say the current relatively low price of gasoline is keeping faster EV growth in check. An October 2010 report by J.D. Power and Associates projects that electrified vehicles, including hybrids, will total only 7.3%, or 5.2 million, of the 70.9 million passenger vehicles sold in 2020.

“Today, with the cost of fuel in North America, it’s too low to have the savings for electric driving to pay for itself in any short order,” says Gartner. “In the long run, for EVs to grow from a niche market to a mass consumer thing, it would take the cost of fossil fuel, petroleum, to go up significantly to get a higher penetration rate.” The EV market in Europe is much more developed because of this reason, he says.

THE SUPPLY

Another stumbling block to greater EV growth is the lack of public charging stations. However, at face value, it’s not a big one. That’s because an EV isn’t charged in the same way that a conventional vehicle is fueled.

“You’d charge it like a cell phone,” says Schwitters. “Charge it at night, and use it during the day.” According to Plug-In America, close to 90% of EV charging takes place in the home. The exception is an EV driver on a long com- mute or road trip, who would need to power up after the vehicle gets close to exceeding its range.

And here is where a chicken-or-egg situation arises in terms of charging infrastructure: Much of the public and private sector do not want to install charging stations for lack of demand; many consumers, meanwhile, may avoid EVs because of the lack of public charging stations, which can provide a security blanket of sorts to those who are nervous about the range limitations on the vehicles.

To give the market a push, the Department of Energy (DOE) awarded ECOtality North America a $99.8-million grant in 2009 to begin developing a charging infrastructure in the United States. Kevin Morrow, executive vice president of the Phoenix-based charging-station manufacturer, says his team is taking a “holistic approach” to this task and is currently in the planning phase, with hardware installation to follow.

ECOtality has set up regional offices in the markets targeted by the DOE and Nissan for development. It has created a document that addresses the requirements of the EV charging infrastructure, from permitting issues and standardized signage to lighting and security.

The next phase creates a 10-year plan for the rollout of EVs in each region. A third phase will address where the more than 15,000 charging stations should be located in each region. The bulk will be earmarked for home installation, with approximately 900 to 1,200 stations per market reserved for public and commercial locations, or one charging station every 3 to 5 miles.

Charging stations also are planned along major transportation corridors, such as Interstate 5 on the West Coast. The EV Project is focusing on national accounts such as BP and the electronics store Best Buy for installations, in addition to smaller businesses, including restaurants.

At BP and Arco sites, ECOtality will be installing its Level 3 Blink DC Fast Chargers, which can fully charge an EV in less than 30 minutes. The charging station has a color touch-screen interface, a 42-inch LCD that can display promotional messaging, and smart RFID technology to accept payment. It is currently priced in the mid-$40,000 range, although that price will likely fall as the market grows, says Morrow.

The Spinx installation uses Level 2 chargers from Coulombe, which cost from $7,500 to $10,000 installed, not including any tax credits, according to Brian Edens of Thurso Power Systems. They also feature display screens and a credit-card reader. Thurso and Spinx chose an area away from the gasoline island, on the periphery of the property, to install the charging stations, while ECOtality is placing its chargers on the side of BP and Arco stores. (See “Charging on the Level,” p. 142.)

The question of whether or not to charge for a charge is one that The EV Project and retailers are still mulling. While the initial public charging stations will be free at first, the DOE hopes to create a business model to make it profitable. “We don’t believe free is a sustainable model,” says Morrow. Different options can include a pay-as-you-go plan, a membership model, and ECOtality’s own Blink network, in which the company would manage the charging stations and share revenues with retailers, he says.

“The benefits to the host is you’re drawing people, and you’re seen as green and proactive,” says Morrow. “We also want to minimize the cost of maintenance of the units. In the end, we want to see it proliferate without a large grant.”

According to Hudson, the five Spinx charging stations will likely handle pricing differently, with some offering the service on a free trial basis, while others may charge based on the cost of electricity.

As an EV driver, Schwitters says he would be willing to pay for using a fast charging station, especially while on a long road trip or in a hurry. “That’s somewhere where c-stores make a lot of sense,” he says.

Meanwhile, those on the supply side of the equation are waiting for the demand to grow before they take a greater leap into the EV opportunity. Spinx will be monitoring consumer demand and feedback, says Hudson, before it plans to roll out additional sites.

“In some respects, we’re reliant on the number of vehicles sold,” says Morrow of ECOtality. “We’re somewhat at the tail of the dog. We have to go to cities where the vehicles are being deployed.”  —Linda Abu-Shalback Zid contributed to this story.    

The Consumer Landscape

A survey of 1,041 consumers by Pike Research in third-quarter 2009 discovered the following attitudes about plug-in hybrid electric vehicles (PHEV):

48% said they would be “extremely” or “very” interested in a PHEV that had a 40-mile range and an electricity cost equivalent of 75 cents per gallon.

The interest level in PHEVs was “not dramatically different” based on a consumer’s age, gender, income or level of education. However, younger consumers and those with higher levels of education are “somewhat more likely” to show an interest in PHEVs

“The “green consumer” was “significantly more interested” in PHEVs than the average respondent. This group includes those who identify as environmentalists and who regularly purchase organic and environmentally friendly products.

About two-thirds of survey respondents were willing to pay a premium price for a PHEV, or an average of 12% higher than a conventional gasoline-powered vehicle. 


Growth Corridors

The Department of Energy’s EV Project is funding the development of an EV charging infrastructure in the following major population areas:

Arizona: Phoenix, Tucson

California: San Diego, Los Angeles

Oregon: Portland, Eugene, Salem and Corvallis

Tennessee: Nashville, Knoxville and Chattanooga

Texas: Dallas, Fort Worth and Houston

Washington: Seattle

District of Columbia

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