Sunday, December 17, 2017

The Ultimate Range Answer? The Distance To The Next Station!

Summer 2017

"I no longer need to stop and charge"

"Who cares what they charge, now that I have my Bolt, if I don't want to pay their rates, I simply won't stop"

"I can wait for the stations to come. In fact, I doubt I will use them when they get here anyway but it would be nice to have just in case"

Winter 2017

"More and more of these cold weather stories will push EV manufacturers to have larger batteries and dcfc as standard, and more charging stations, much like Tesla. The next big EV will be the first Camry size sedan from a major manufacturer that has a 120kwh battery and the ability to charge at 800v ( 250kw ish charge ) for around $40k. This is the car that GM, Ford, and Toyota should be looking to sell in 3-4 years. The next gen bolt should have at least a 90kwh option."

We spent years asking for 200 miles. Saying this is all we need, etc.  I said from Day One and will say it again; There is no range that will minimize the need for effective public charging.

On the Bolt Forum, the predictable pattern happened. Summer it was all about posting screenshots bragging about how far one went beyond the 238 mile standard. There were many including several over 300 miles. Life was good.  Who needed public charging?

But just as I expected, now we are seeing people struggling to attain  ¾ of EPA with a few in the Northeast barely getting half.

**This is not a "Bolt Bashing" post. I use them as an example simply because the Bolt has been out only a year and far too many underestimated the need for public charging because you see, this post has NOTHING to do with range. After all, as mentioned several times before, range is adjustable. 

Recently Tesla made it known that SuperCharger is available for lease doing it by restricting its usage for businesses but also mentioning they do offer private SuperCharger network options.  So what appears to be a ban on commercial use can also be looked at is a public relations win to reduce congestion for private owners and another avenue of revenue for Tesla that could lead to special licenses for SC use for businesses that might even include monthly rate plans.

But is this simply step one towards a pay network?  Possibly.  Granted a lot of Tesla's on the road now will be free but how long will they last?  Accidents will eventually pull some off the roads. AP might prevent one from causing an accident but there is little that can prevent one from being in an accident caused by someone else. The Urban SC buildup would more than take care of "lifetimers" anyway.  Either way, the SC buildup continues at a frantic pace. Every day, I read about how Musk is running Tesla into the ground. But everything I see Tesla doing today is building towards a future that is much brighter than any auto manufacturer.

 I blogged a few weeks ago about how I see Tesla making a ton of money providing networked charging services to the trucking industry and I still see that as happening. Yes, it will take Billions to put in bare bones network but Tesla has already proven that they can build a network and at quite a good pace. The success of the current SC network will give Tesla the ammunition to get the financial backing needed to build the trucking network and the initial cost will pale in comparison to any project Tesla has taken on so far including the Gigafactory.

But this is inline with Musk's grand plan for Tesla.  The current dealer network reminds me of why drugs are so expensive.  As an auditor, I perform audits for several major Pharmaceutical Companies and a large part of those audits are on Drug Reps. This generally includes inventorying samples, inspecting storage and product handling, etc.  Very few market more than handful of products with just over ¼ of them only handling only ONE PRODUCT at a time.

Despite all this, I have yet to see a drug rep who did not make a lot of money. Granted I don't see it all but the huge money potential seems quite common.   The houses some of these people live in is amazing to see. But also gives insight to why drugs are so expensive. Simply too many hands in the cookie jar.

The auto industry is the same way.  Car salesmen are paid on commission.  Really crappy salesmen make minimum wage and most don't last more than a few months.  Now for nearly every sale, the profit is split between the salesman, his team leader, closer (which can be team leader in some cases) Manager and Assistant Manager of Sales, Finance (which also pitches upsells like GAP,  window etchings, extended warranties, etc.)  and the General Manager.

Now, not all cars sell for a profit so sometimes the "farther ups" get nothing. In my case, I could not make less than $100 on a sale no matter what the profit margin was and surprisingly enough, most dealerships do sell cars at a loss or least break even which means a loss since the $100 I get has to come from somewhere, right?  This is not uncommon but generally only applies to used cars.

On new cars, there is more than enough profit built in where everyone gets their piece which is generally very lucrative.  Top Salesmen easily make 6 figures with managers doing even better in most cases.   But all this means that manufacturers have to cut profits in order to entice dealerships to sell their cars.  This doesn't always work well especially when volumes are not high. So many dealerships rely on service departments to bring in enough money to keep the lights on during the slow periods.

But Tesla realized that dealership overhead would not allow them to make a profit and the dealerships would suffer as well since EV support on service revenue would pale even against the support trump provides for his detractors.

So providing ongoing support in the way of Public charging simply makes sense. Right now, the network does not collect enough revenue to pay its ongoing cost, much less the cost of installation but realize that electricity costs may not change much but the percentage of power SC stations will receive from Solar is likely to rise insuring long term operating costs dropping. 

But that is Tesla and as we all know, Tesla SC can't be used by anyone else.  Chevy has stated several times they won't contribute a dime to build public charging and it shows by the comment above which was made in response to a NEer who had to manage a trip with a Bolt range under 140 miles. Well, we all know that Northeast Winters can be brutal so this was at least partially expected.  Now part of it was the Bolt's 6 KW resistive heat taking up nearly ¼ of the juice but hard to fault the driver especially when temps are in the danger zone.  So in barely a year, we already have people crying for more range. My how quickly we change.

A while back, I was part of a survey asking about EV wants and dreams and yes, I was one of the majority that wanted an EV that would do a "real 150 miles" for around $25,000.   Now am I to blame for Nissan putting out a 40 kwh LEAF as opposed to the expected 60 kwh LEAF?  Despite being only a few years ago, 150 miles seemed like a dream come true and it would be had public charging infrastructure continued to expand.

Yeah, blame me but realize it was a majority selection and it wasn't even a close one. At the time there was no indication of who was sponsoring the poll but I felt it was Nissan.   The next most popular selection with almost ¼ was a 200 mile EV for around $35,000.  The prices I don't remember exactly because it was one of those polls that had several different pricing structures and some questions you could only pick one with others you could order your selections by preference but its in the ballpark.  But it was clear that we all thought EVs were simply too expensive.

Now another question was selecting what was more important and naturally it was range verses public charging and I took public charging and it lost BY A TON.  People poo pooed the public charging idea citing the lack of stations in their area along with the unreliability of the one that were there. Of  course, this was back when Blink dominated the landscape in many areas. Thankfully that is much less true although I will say that Blink has stepped up a bit in our area with all but 2 DCFCs fixed and running. Something that hasn't happened since the VERY early days!

But what we have now is the opportunity for Auto manufacturers  to get into the public charging arena which can boost their sales and provide an ongoing income for years to come. Right now its hard to see the model working because start up costs are high and the revenue is low but that will change. As more people adopt EVs, public charging costs will rise making a profit model more likely.

The cost of the charge itself might not rise but the volume of people charging means the ability to generate revenue from other sources will increase whether its food or advertising; when there is that many people out there; money will flow.  So will charging stations become the next Starbucks?  Tesla is betting on that.

So Chevy, Ford, VW, Nissan?  Get with the program before its too late and make sure your stations work for everyone.  Don't take too long because if you do, Big Oil might just beat you to the punch.


Receiving feedback that the SC network is much more profitable than my implication due to very low utility costs.  I am not finding any info on that so if anyone has some insight, please post your thoughts below!

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