Patient capital is essential for anyone wanting to take on the uphill task of building electric vehicle (EV) infrastructure in a country with no formal EV policy.
The installation cost is high with Evie Networks CEO Chris Mills estimating more than $750,000 is needed to set up an ultra fast-charging two-head station, while a six-head charging point would cost around $1.5 million.
Compared to more than one million new cars sold in Australia last year, the Electric Vehicle Council estimates just 1,277 EVs were sold in the first half of 2019 (excluding Tesla, which does not release country data).
Mills calculates there would be less than 12,000 EVs all up nationally at the moment.
According to EV Council data that means there are only six EVs for every station built to date, but Mills clarifies the vast majority are very slow-charging stations; the equivalent of "a power socket in the wall".
So even though more models are available for less than $60,000 and the EV Council is hopeful for strong sales growth in 2020, it's logical that Evie Networks doesn't expect to turn a profit from its charging sites - all powered with renewable energy - in at least five years.
"The take-up of electric vehicles forecasted by the government just doesn't show that there will be a sufficient volume of sites where you would necessarily get a great return on your investment, and interestingly that's why big industries - ASX-listed companies - aren't doing this," Mills tells Business News Australia.
"The ROIs (returns on investment) don't stack up. You need people who have patient capital, who see the long-term picture, are prepared to invest for the long term and are happy to wait a decade to see any return."
This vision is shown by Evie Networks' backer the St Baker Energy Innovation Fund, established by Trevor St Baker who built ERM Power from the ground up before it was recently sold to Shell for $617 million.
A philosophy of "Build it and they will come" pervades the corporate mindset at Evie, which opened its first highway EV station at Coochin Creek on Queensland's Sunshine Coast late last year.
The executive says feedback has been positive though far, with utilisation averaging between 3-5 per cent since launch through 400 charging sessions from mid-November until mid-January.
The executive, whose background is in building telecommunications towers around Australia and worldwide, says the average session lasts 20 minutes with 20kWh drawn, allowing for 100-120km of travel.
However, Evie Networks' chargers built by Brisbane-based Tritium have been future-proofed to be able to deliver 350km worth of charge in just 10 minutes. But EV manufacturers still take a more cautious approach to maximum loads in order to protect the battery.
"The battery management systems in those cars will actually limit the speed to protect the battery; most cars will take 50-75kW before the battery will kick in and slow it down," says Mills.
"The most expensive EV that's out there, the Porsche [Taycan], will take a 290kW charge at peak."
Mills expects to open 15 to 20 new EV charging stations in 2020 across both highway and metropolitan locations. This will hopefully help give Australia a fighting chance to keep up and potentially thrive while the world's automotive manufacturers phase out petrol-based cars.
It's an effort that goes beyond just capital, convincing stakeholders such as landowners and utilities operators of the future benefits.
"You've got to bring the landowner along for the ride with you. Many of them are owners of land that have petrol stations, or they're petrol retailers themselves or they've got some affiliation," he says.
"What we do is we sell them the opportunity of being able to participate without necessarily putting any capital into it, so it allows them to have a finger on the pulse of the take-up rates - they can get a sense of driver behaviour and charger behaviour.
He expects the next sites to be built will be in Far North Queensland, Brisbane, by the Pacific Highway near both Tweed Heads and Taree, between Canberra and Albury, north of Melbourne and in Melbourne itself.
But there isn't a clear geographical structure for the timing of these launches.
"We call it a pop-corn roll-out - whilst you start all the sites at the same time, they progress through a candidate evaluation, the selection process, negotiation with the landowners, the securing of the consensus with local councils and then getting the power to the site from the utilities," says Mills.
Evie plans its stations to fit into the existing patchwork of stations built by the likes of NRMA, Chargefox, Mirvac, Stockland, Tesla and the Queensland Government's Electric Superhighway.
"We tie into it, but we don't overlap," says Mills.
The group has three main criteria when it selects a highway site: ease of access, security and access to amenities.
"We have a really simple philosophy and that is: Would you let your 17-year-old daughter charge there at two o'clock in the morning? If the answer is no, it's probably not a site we're going to progress," he says.
"We purposely look to find locations where they have nearby amenities - fast food outlets, restaurants, that sort of thing so that families can take a break, get something to eat, have a bathroom stop, and they can do all that while the car is charging."
Plugging in to future profit?
The heavy lifting being undertaken by Evie Networks and others along Australia's highways is to address one of the public's biggest concerns when it comes to electric vehicles - the lack of infrastructure.
"Whether the highway network ever makes money, I'm not sure, but the highway network is a necessary investment because if you don't connect the capital cities you'll never get the take-up," says Mills.
"You'll never breach that range anxiety that everyone talks about."
He describes an oft-discussed EV trifecta or "three legs to the stool" for the sustainable take-up of electric vehicles: price parity, availability of models and availability of infrastructure.
Evie Networks aims to tackle the latter through the highway nodes, but ultimately the real money is to be made in urban charging stations to service the public and particularly professional drivers.
Mills looks to the Californian example where there has been a strong take-up for EV and around 30 per cent of out-of-home charging station is for ride-sharing services, and he is emboldened to believe this could be Australia's future as well.
"We are also going to be rolling out a metropolitan fast-charging network - one based on 50kW chargers - in Sydney, Melbourne and Brisbane as a Phase 1 metropolitan build. We were given board approval for that late last year," he says.
"We're in the planning and early site acquisition phase. The aim is to have a publicly available fast-charger within 15 minutes of driving wherever you are in the cities.
"What we'd like to do is see how we can assist in the transition of ridesharing and ride hailing to electric vehicles."
He says an Uber driver will generally travel around 2,000km a week depending on how many shifts they do, and this helps tip the cost-benefit equation in EVs' favour over conventional vehicles.
"When you look at the total cost of ownership of a car, when you consider the fuel costs and the maintenance costs and the like, at those sorts of kilometres it's about the same," he says.
"The maintenance costs of an electric vehicle are far cheaper than a petrol car, yet you won't get Uber drivers making the change until they are comfortable there is a network of infrastructure that's out there to support them."
"They'll plug it in at home at off-peak rates at 18 or 19 cents a kWh and they'll go. The [EV] cars today, the Nissans or the Hyundais, they typically have a 300km battery size, and so if they're doing between 300-400km a day they need a top-up."
The EV Council's 'State of EVs in Australia 2019' report stated that while electric vehicles currently have a higher purchase price relative to fossil fuel vehicle (FFV) counterparts, the average annual cost saving from making the switch would be about $1,299.56 per year.
"Total lifecycle savings from electric vehicles will become even greater within the next five years," says the council, which offers a cost of ownership calculator to potential EV buyers.
"While electric vehicles currently have a higher purchase price relative to fossil fuel vehicles, their upfront cost is expected to reach parity from 2024, mostly due to falling battery costs."
Mills says the future of metropolitan vehicle stations will be based around what the driver can do in their break, combining retail or cafés or restaurants.
"Petrol retailers will change the land use and they will become small convenience stores with charging, so you can get your coffee, read the paper, do your dry cleaning while you're getting your 20-minute top-up," says Mills.
"We don't necessarily believe that the majority of Australians will charge their car from nought to 100 per cent at one of our chargers. We believe the majority of Australians will do that at home.
"That said, there's a fair whack of people out there who don't have off-street parking and as a consequence will need to have available charging if they want to make the transition."
Business News Australia
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