A Recharging Industry Rises; High-voltage, superfast public devices for recharging electric cars are appearing more frequently, though some are more expensive for drivers than home chargers, or even gasoline

November 12, 2013

A Recharging Industry Rises



Michael D. Farkas, co-founder and chief of the CarCharging Group, which is buying up high-voltage recharging networks.

WASHINGTON — Tens of thousands of new electric cars are zipping into traffic this year, and with them come a trunkful of strategies about how to recharge them. There are at least four ways to go: recharging slowly through a standard 120-volt wall socket, the type a consumer would use for a hair dryer; buying a faster 240-volt home charger, about the size of a garden gnome, for several thousand dollars; plugging into the same 240-volt charger in a public parking space but paying a price; or using a $30,000 superspeedy public charger that takes only minutes but is not widely available.The only consensus is that the more opportunities there are to recharge, the better the sales of vehicles that can generally go fewer than 100 miles between plug-ins.

Not surprisingly, the chief executive of a company that has bought up thousands of high-voltage devices thinks they are the best way to recharge. The CarCharging Group, based in Miami, has quietly purchased four companies with networks of chargers, 13,430 in all.

CarCharging has installed the high-voltage devices, some dressed up to mimic a gasoline pump, in underground parking garages, where drivers plug in and pay for the electricity through a device that resembles a credit card. But the price, 49 cents a kilowatt-hour — roughly four times what people pay for electricity in their homes — often makes the electric car more expensive per mile than the gasoline car it replaced.

The high-voltage devices, though, take less than an hour to charge a car that has driven 20 miles from a person’s home to their office, enabling garage valets who park the cars to move them around, charging several during the day.

Such public charging has an advantage over the 240-volt charger that a car owner can install in a garage or car port, said Michael D. Farkas, the founder and chief executive of the CarCharging Group, because in a private home, the charger is typically used for just one car. “We’re able to amortize it over several users,” Mr. Farkas said. The smaller home chargers typically take two or more hours to recharge a car.

CarCharging installs chargers like soft drink machines, retaining ownerships and revenue, and giving landlords a cut. Another company, ChargePoint, manufactures the devices (including some for CarCharging) and sells them, usually to landlords, to use as they please. A shopping mall owner, for example, could set up a machine to dispense electricity free for two hours and then bill at a high rate after that, encouraging shoppers to visit but not hog the charger. An employer might program the machine to provide free electricity but only to authorized users.

Strategies differ, said Dimitrios Papadogonas, vice president of marketing for ChargePoint, but “it’s not surprising that there’s some confusion, because it’s a new industry and it’s getting sorted out.”

Mr. Papadogonas and Mr. Farkas agreed that public charging was needed because some potential buyers could not plug in at home. A new study by researchers at Carnegie Mellon University in Pittsburgh and the University of Glasgow found that in the United States, less than half of vehicles have a regular off-street parking spot at a place owned by the driver, where a charger could be installed.

Stepping into this picture, last month eight states announced a joint effort to bolster electric cars, partly by requiring the installation of chargers in certain categories of buildings, like multifamily apartment structures.

But it is a tough business. Last month CarCharging bought the Blink network’s 12,450 chargers because its owner, Ecotality, had gone bankrupt despite $114.8 million from the Energy Department to help build the network. (Blink had trouble keeping its chargers in good repair. ) In February, CarCharging bought Beam Charging, which has contracts with 400 parking garages. In April it bought EVPass, with chargers in central and upstate New York, and 350Green, with 600 installations, in the Midwest and California.

But Mr. Farkas acknowledged that 49 cents a kilowatt-hour was equivalent to the cost of gasoline at current prices for a car that gets 21 miles per gallon, a substandard rate in 2013. The company is considering offering a flat monthly rate, $100 for off-peak charging and $150 for anytime charging, which, he said, mimicked the gasoline expense of a typical car. Still, the car would have to go about 600 miles a month for the driver to break even, difficult in a car that cannot make long trips.

A cheaper way to use electricity to save gasoline, said Jeremy J. Michalek, an author of the Carnegie Mellon study, was a plug-in hybrid, a car that carried a small battery pack that could be recharged from a standard 120-volt outlet, and would switch to gasoline when that charge was exhausted.

Some experts say that the 240-volt chargers are not needed, since most electric cars are used for commuting, and are parked most of the day. Standard AC outlets, at a cost in the low hundreds of dollars, would be perfectly adequate even though charging takes hours, these experts say.

Robert E. Bruninga, an aerospace engineer and instructor at the United States Naval Academy in Annapolis, Md., has an electric car that he calls “a commuting appliance.” He said it charged just fine overnight in his garage. He has been driving the car to and from his home and the Naval Academy, about 15 miles away, for years.

Mr. Bruninga, a participant in the Maryland Electric Vehicle Infrastructure Council, an advisory group, argued against the Maryland transportation department program’s spending $12 million for 80 chargers at Baltimore-Washington International Airport, train stations and other locations.

“It’s ludicrous,” he said, because the chargers were installed in places where cars park for many hours or days at a time, meaning a standard 120-volt outlet, which takes about six hours to charge a car, would have been more than fast enough. The $12 million could have paid for thousands of standard outlets, he said, in park-and-ride lots and other places that would encourage daily use.

In Annapolis, he said, he parks about six feet from a standard AC outlet, but he is not allowed to use it because the government wants him to pay for the electricity, but cannot figure out how to charge him the 50 cents. At the national average retail price for electricity, most electric cars plugged into a standard outlet absorb only about 20 cents’ worth of energy an hour.

Mr. Bruninga said that any electronic payment systems would be overkill for such small transactions and instead said he should be charged a monthly fee, in exchange for a card he could leave on his dashboard to let the parking police know he was authorized to charge.

The state of Oregon is encouraging big retailers to set up the speediest type of chargers in parking lots and offer the electricity free. Giving away a dollars’ worth of power is a good way to lure shoppers into a store, said Ashley N. Horvat, who works in the Oregon Department of Transportation and is the state’s chief electric vehicle officer.

Ms. Horvat, who drives a Nissan Leaf electric car, said the state, which has installed 34 fast chargers with grant money, was encouraging the use of the speedy chargers. (They work on DC, or direct current, which is different from the AC, or alternating current, that powers most household devices.) Some are maintained and operated by Aerovironment, a California firm with a long history in the electric car business, which for now allows them to be used without payment. Others are owned by a big-box retailer, Fred Mayer, which plans to give away the power.

“I’ve driven 438 miles in one day using fast chargers and have enjoyed spending my time and resources in these communities I’ve stopped at along the way,” Ms. Horvat said in an email.

One luxury-car maker, Tesla, has established a network of high-speed chargers just for its customers.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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