Battery-electric vehicles might make up barely 1% of the U.S. new car market right now, but the expectations are that sales will grow exponentially this coming decade.
Automakers are investing tens of billions in new products like the Tesla Model Y, the Cadillac Lyriq, the Ford Mustang Mach-E and the Volkswagen ID.4. But, hoping to solve the chicken-and-egg problem, there’s plenty of money going into the public charging infrastructure, as well.
Late last month, General Motors announced it was teaming up with EVgo to triple the number of public chargers that company operates. Days later, charging network company ChargePoint secured $127 million in new funding, one of the largest investments it has yet lined up, to boost its own charger roll-out.
These developments should make owning and operating an electric vehicle far more attractive to both consumers and fleet operators, according to Pasquale “Pat” Romano, president and CEO of California-based ChargePoint, which bills itself as the largest operator of independently owned charging stations. He spoke with Business Insider about his company’s plans and the future of the EV market.
Portions of this interview have been edited for clarity and brevity.
Business Insider: This is a pretty big round of funding, one of your largest, isn’t it?
Romano: It’s about half the size of our last round, but it means we’ve raised about $667 million to date over 13 years, most of it in the last four years. That says investor confidence in the segment is going up.
BI: It seems to be happening as a lot more automakers are getting out there with new EV products – and as your competitors are also raising more money.
Romano: I don’t if you’d call it a groundswell, but there seems to be a perception that what we’re chasing after isn’t tilting at windmills, a dream that may never come true. This seems to suggest people are taking (the EV market) seriously. Even 13 years ago we were very confident this was going to happen. It just took the rest of the world time to see the evidence. The thing about ChargePoint is we’re now almost an index fund for the electrification of mobility because we’re broadly exposed to the whole market.
BI: What do you mean?
Romano: We’re not dependent on any one auto OEM, or any battery chemistry or anything like that. We’re in every segment. We do home, multi-family, workplace, retail, hospitality, airports, parking operations, highway fast-charge fleets, and we do it in Europe and North America, so we’re as broadly exposed as you could get.
BI: The EV market is still small, though, barely 1% of overall U.S. sales, but you’ve said before that you think we’re closing in on the tipping point, and that growth will come faster than many people expect.
Romano: Yeah, you’re seeing that. I think Tesla has gone a long way to setting up in the consumer’s mind that electric transportation is actually superior. It’s a better way to drive, even if it weren’t less expensive. And it’s cool. (But) up til now, the market has been vehicle/make/model limited, meaning that while a lot of consumers had the desire to buy electric they couldn’t find a car in their price range that fit their lifestyle. Now, you’re starting to see some significant battery-electric vehicles with good features targeting the mainstream and, as that happens, you’re going to see a massive uptake of those vehicles.
BI: Many people point to the lack of a public charging infrastructure equivalent in size to today’s gas refueling network. But is that really necessary?
Romano: Most of the gas stations out there won’t…have a purpose, unless you’re talking long-haul corridors where you are driving, say, between cities, or on your way to a vacation destination. Those are the only times you’re going to go to a (public) location to charge your vehicle. Most of the time you’re going to (charge) at home and at work, and maybe when you’re shopping or at a movie.
BI: What about for apartment dwellers who might not have access to home charging? That was a target that General Motors CEO Mary Barra said she was looking at with GM’s new deal with EVgo.
Romano: You may have some major cities where that’s the case, but I think it will become a required amenity to have charging in the parking lots in apartment buildings. Where it may be needed is with ride hailing services that have to charge up frequently.
It’s the long-haul network that’s different. You have to be able to prove to someone they can drive for vacation, even if they do it infrequently, get a charge on the way, so they don’t have to own multiple vehicles or rent a car. People buy vehicles based on their most infrequent use case, to make sure it will handle everything.
BI: ChargePoint is different from some companies because you don’t really care if you provide a charger for home, office or a quick-charge station, do you?
Romano: We’re very different from companies that sells energy to a driver. We just want to put more chargers in. We consider companies like EVgo or Electrify America potential customers. Right now we have 115,000 places to charge publicly, if you include workplaces.
BI: While much of the conversation focuses on retail automotive buyers, there’s a lot of growth on the commercial fleet side, isn’t there?
Romano: We just did an announcement with the National Association of Truck Stop Operators. (ED: the $1 billion project aims to put chargers in at 4,000 U.S. truck stops and travel plazas.) Some of the latest round of fundraising will be used to address increasing demand in Europe and to accelerate some product development. But also to address the fleet portion of our business that’s growing faster than we originally expected.
The different between a fleet customer and a consumer is that fleet buyers are completely unemotional There’s no fashion or lifestyle to their choice. They have a particular need in very controlled environments. They know, very predictably, what the route mileage is, so they know what the cost structure is and they’re going electric because it’s so economically advantageous.
BI: We’re seeing all the major truck companies, as well as car companies like GM and Ford, bringing out electric trucks and vans.
Romano: My prediction is that while this is starting later due to vehicle availability, (fleets) will fully electrify faster. The pandemic has actually accelerated fleet operators’ consideration of going electric. The decline of traditional brick-and-mortar retail raises the urgency of the logistics providers and makes them all the more want to go electric.