Electric Vehicle Installation: New Business Models Emerge with the Infrastructure LawÔøº

The Bipartisan Infrastructure Law has a goal of developing a national EV charging infrastructure of 500,000 chargers by 2030, and it includes up to $7.5 billion in dedicated funding to increase EV charging accessibility; money is distributed based on the state's federal highway funding formula. There is a $2.5 billion discretionary grant program and a $5 billion formula program. These are applied along Alternative Fuel Corridors (AFC), a U.S. DOT designated network of plug-in EV charging (and other fuels) along national/state highway systems.

Each state department of transportation is tasked with making sure that the funding is disseminated thoughtfully with plans for how to spend the money are due to the U.S. DOT by August 1st.

Opportunities for Charging Businesses

With this large investment in EV infrastructure, new business models will emerge. Currently, ChargePoint is the largest EV charging network with 30,000 stations with over 47,000 individual charging ports. Tesla, the next closest in number, has fewer than 6,000 station locations and about 25,000 charging ports. While the majority of Tesla's charging ports are DC Fast Chargers, most ChargePoint locations are Level 2.

With the rise of EV charging in the next couple of years, there will be many ways to deploy options for ownership, financing, and serving customers (see examples in the Figure below). Until recently, companies used one of only two business models. Under the first, an EV charging provider sells electricity from public charging stations it owns and operates. Under the second, the provider doesn't get paid for the electricity, but instead collects service fees for installing, operating, and maintaining charging stations at locations like shopping malls and parking garages. But now, there are so many other options because of the large federal EV investment and one of those is highlighted below.

Service Aggregator as a One New EV Business Model

Consumer vehicles are parked most of the time and a parked EV can connect to the power grid with opportunities for charge coordination and energy management. A connected EV offers flexibility on how and when energy is delivered.

To that end, increased numbers of parked EVs may facilitate a business model for service aggregators. An aggregator is a group in a power system such as energy storage providers, rooftop PV solar, or EVs that act as one entity when they engage in the power system or sell services. It is possible to aggregate on several levels: (1) the first is on site where EV charging infrastructure is installed and connected; (2) the second is to aggregate locally such as in a neighborhood or an industrial site that spans several miles; and (3) the last is serving a company that operates as a virtual power plant (VPP), aggregating different distributed energy resources to provide grid services. In this way, an aggregator acts as a middle man between the system operator and the EVs. It can be seen as a large generator source that provides ancillary services such as frequency and regulating reserve. Currently the large EV charging companies like ChargePoint can serve as an aggregator or an entirely new company may enter the market and provide those aggregation services.

The rapid growth of clean energy technologies like solar also presents an opportunity for EV chargers to integrate with existing or new clean energy infrastructure. Tying solar, storage, and EV charging together in a microgrid that can be islanded from the larger electric grid is another technological solution that is likely to be seen. It will make a facility resilient and self-sustaining in the event of power failures or forced outages.

Predictive analytics is another business opportunity with the EV infrastructure growth. An EV car can generate terabytes (1 trillion bytes) of data. Within that data are answers to questions about the patterns and the potential for monetizing connected car data is massive.

Leyline is monitoring the EV charging infrastructure environment to see where and how lending may provide value as this space evolves. Stay tuned for more updates as they unfold.

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