Why the death of government subsidies will save the EV movement.
Why the death of government subsidies will save the EV movement.
by James R. Lightfoot is the CEO of RightSite
In his first week back in office, President Trump sent a collective gasp through the U.S. EV industry. With a stroke of a pen, subsidies for EV purchases evaporated and funding for charging stations became frozen indefinitely.
“Drill-Baby-Drill” Donald likely didn’t intend it, but his actions may have saved the American EV eco-system. Despite the wailing and gnashing of teeth from the EV industry, this is exactly what was needed… a hard stop on confusing and unproductive government subsidies and a move toward market-driven reality.
While good intended, government subsidies muddied the waters on how to roll out the EV revolution. Complicated grant applications slowed down charging station development by years and the large pool of cash involved invited gross overpricing of products in the supply chain.
Now with government handouts out of the way, we have a chance to make the EV roll out successful for the long haul. But it will take some dramatic, new thinking. Here are 5 things the EV industry needs to do to make EVs a long-term success—
Put charging stations where consumers, not bureaucrats, want them.
Slapping chargers into places that are politically popular but not financially viable is a recipe for long-term failure. Money-losing sites inevitably will be poorly maintained then disappear. However, new, extremely accurate location predictive services can determine profitable locations quickly and affordably. Some even guarantee their predictions.
Cut the pork-belly pricing on charging components.
Charging hardware manufacturers need to sharpen their pencils and recognize that subsidized prices just aren’t sustainable. There’s still good money to be made, just don’t get greedy.
Have site hosts treat chargers as a profit center, not a PR move.
Adding eco-friendly charging stations to your business is a nice public service, but that’s not how hosts should look at them. These can be real money makers. Get a high-quality site evaluation before you decide where to put in chargers and you’ll have a profitable addition to your business PLUS help the environment.
Simplify utility fees so developers can make predictable profits.
Electric utilities stand to be one of the biggest benefactors of EV adoption.But they haven’t done enough to help developers make money, too. Currently, utility prices are a nightmarish maze of price fluctuations based on time of day and time of year. That makes it extremely difficult for charging developers to accurately predict profitability. And if they lose money, ultimately, utilities will lose money. The utility industry would be well served to come up with a more predictable, and flatter rate structure so developers can better predict if a charging site is worth developing.
Installers should resist projects that are obvious money losers.
It’s tough to say “no” if a developer asks you to build a site where your experience tells you it’s a losing location. But that’s exactly what installers should do. Playing along with an obvious money pit will only accelerate the demise of your valuable customer. So do your developer friends a favor and let them know your concerns before you say, “yes”. You’ll sleep better at night and you just might save their business.
All of us in the EV industry need to work together now to adopt these market-driven changes so the EV revolution in America can build a long, and profitable future.
James R. Lightfoot is the CEO of RightSite, LLC, a highly-accurate EV charging site evaluation service.
