7 Major Carmakers to Launch New EV Charging Network In North America!

[milepost1]

Think ford was on right path to have all for dealers as a charge station. Problem cant get them in fast enough and a lot of ford dealers not convient for road trip. Tesla renaming NACS (north american charging standard) was brilliant as it was NOT the standard. American companies didnot get involved nor did govt such as in the EU or Canada. Now with free market only reliable expandong network is Tesla. Ask any EV driver of any other EV brand. biggest issue is charging network. And in 4 years it has improved almost 0. Now even thouh not really all Tesla stations open to everyone. Just 4th gen. Everyone thinks charge network is solved. If you look almost ALL tesla chargers that will be open to all have yet to be built. The "magic dock" is going no where. All markrting but Tesla wins by now having NCAS (North American charging Standard) as the "standard". Interesting reads in how we got here. And very interesting in most other countries charge networks and plugs already established. Even canada is way ahead of the US. Not sure why the US was never able to make a reliable charging network.

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[Garbone]

Well, we stopped at a Harley Dealership in Tennessee that had EA in its parking lot. Loved that stop looking at the bikes and shopping the swag was so much a good change from Walmart... Wandering around a dealership with shiny new cars could be dangerous but does seem to be a good idea to get folks in the door.

 

[Guss-E 2021]

That seems very different from losing, say, 3-6 cents on every kWh sold. Do you think such a business model is going to be viable for electric?

My comment was not about the viability of replacing gas pumps with DCFC. It was to correct the assumption that one entity owns the store and the other the refueling. I edited that post for clarity.

 

[phil]

My comment was not about the viability of replacing gas pumps with DCFC.

True. I asked because the question interests me, and you seem to be knowledgeable.

 

[Guss-E 2021]

True. I asked because the question interests me, and you seem to be knowledgeable.

OMG LOL, I'm sorry @phil I honestly thought the question was rhetorical. So as for my opinion on the viability of DCFC vs. gasoline pumps. That's a tricky one.

So I did recently underwrite a used car dealership specializing in only BEV and PHEV sales. The owners bought and converted an old NIssan dealership. The owners are very much BEV evangelists/enthusiasts. As part of the project, they are installing chargers. However, I believe they are Autel Level 2. Likely far less expensive then Level 3 EVSE. I could still reach out to them about ROI (return on investment).

That's the catch I guess. I know Tesla's EVSE cost much less to build and install than the competition because both the unit and the installation are modular. (EVSE: that's electric vehicle system equipment; overly wordy way to describe a BEV charger - I never assume everyone knows what all these acronyms stand for). At that point, it boils down to what you pay for the electricity you sell. In theory, if you have on site solar or access to solar and/or wind at a reasonable fixed rate, you may actually be able to eek out a small profit on the charging. That would still depend on annual operating costs (maintenance, depreciation, etc.). You do not factor in the initial capital outlay (capital expenditure or CAPEX) into your operating profits. Investments in fixed assets are a balance sheet and cash flow item not a profit and loss item. Everybody gets that wrong.

So long answer long: I think it is possible to make a profit on charging but I am going to guess it really has to be at scale so for a small, independent DCFC with a C-Store, it will likely be a loss leader. This is the future so I'm sure a lot more data on the subject will come out over time.

 

[dbsb3233]

You do not factor in the initial capital outlay (capital expenditure or CAPEX) into your operating profits. Investments in fixed assets are a balance sheet and cash flow item not a profit and loss item. Everybody gets that wrong.

As an accounting technicality, yes, but capital outlays still have to be paid back. All expenses do, whether operating or capital. You just get more time to spread repayment out by depreciating capital expenses.

 

[AZBill]

And there are exactly 0 of this new consortium's chargers anywhere in the world at this time. Your point being?

There are many

800V CCS chargers in the US, that support these vehicles.

FYI, GM has already deployed Ultium chargers in the US in conjunction with EVGO, here is a site near me.

 

[VegasWeezy]

As an accounting technicality, yes, but capital outlays still have to be paid back. All expenses do, whether operating or capital. You just get more time to spread repayment out by depreciating capital expenses.

You have to spend the capital outlay yes, and that may mean taking on debt and repaying the cost over time. But Guss-E 2021's point was that the full initial CAPEX cost does not factor into the profit & loss immediately. That is precisely why you have the depreciation expense (and interest expense if you took on debt) calculated over time, so you can see a much more accurate reflection of the operating costs and profits/losses on a year to year basis.

 

[dmastro]

There are many

800V CCS chargers in the US, that support these vehicles.

FYI, GM has already deployed Ultium chargers in the US in conjunction with EVGO, here is a site near me.

I’m not sure EVGO has any relevance. I was commenting to confirm the specs of the upcoming Tesla v4 charger.

 

[Guss-E 2021]

As an accounting technicality, yes, but capital outlays still have to be paid back. All expenses do, whether operating or capital. You just get more time to spread repayment out by depreciating capital expenses.

Co-rrect.

If you use your own cash (cash on the balance sheet) which is rare for big companies, you hope to recoup it via retained profits generated by the assets. But yes, if you finance the CAPEX, either through debt or equity, you do need to pay that back. Interest on financed debt is included on the P&L so, in that way, CAPEX can affect profitably.

But typically, if a business is trying to determine if a service or revenue stream is profitable, they look at COGS and what the related operating expenses are. If it is profitable, yah then they figure out the breakeven time frame on the initial investment. Stimulating stuff here .

How all this applies to public EV charging is a conversation we are going to have for a while methinks. I for one one have no plans to start a vehicle charging business

 

[HuntingPudel]

https://www.msn.com/en-us/autos/new...r&cvid=e8f6412c2b3b4d40b7b9431b56580152&ei=20

The new consortium seems to be planning 400 KW.

 

[dbsb3233]

You have to spend the capital outlay yes, and that may mean taking on debt and repaying the cost over time. But Guss-E 2021's point was that the full initial CAPEX cost does not factor into the profit & loss immediately. That is precisely why you have the depreciation expense (and interest expense if you took on debt) calculated over time, so you can see a much more accurate reflection of the operating costs and profits/losses on a year to year basis.

Perhaps, but whether it's spread out over year 1 or 3 or 5, or whether it's cash or loan or whatever, isn't really germane to the point of overall profitability/sustainability. We're just talking about how viable of a business model DCFC is or isn't. Those 6-digit charger + install costs are all part of the total cost.

 

[VegasWeezy]

Perhaps, but whether it's spread out over year 1 or 3 or 5, or whether it's cash or loan or whatever, isn't really germane to the point of overall profitability/sustainability. We're just talking about how viable of a business model DCFC is or isn't. Those 6-digit charger + install costs are all part of the total cost.

It absolutely is germane to the point. It is by spreading the depreciation cost over the useful life of the asset, that you get a true sense of the annual cost of building/obtaining/maintaining/replacing the assets necessary for running the business.

Otherwise, you would have misleading profit and loss statements. Let's say the business required a $100k outlay for the DCFC station and the charging equipment had a 10 year useful life before it needed to be replaced. Now if you fully expensed that $100k in year 1 getting the business off the ground, the P&L for year 1 would make it look as if the business has no hope of profitability. Then in years 2-10 you would look more profitable than you truly are because you're not factoring in any costs of the equipment.

As you say, those 6-digit charger + install costs are all part of the total cost. This is correct. But it's by taking that $100k cost and expensing it $10k per year for 10 years that you have a better understanding of the profitability of the business. No one is saying you don't ever recognize the cost.

What we're saying is, when you spend the $100k to build/install the equipment you don't expense the entire $100k upfront. You would add $100k worth of equipment as an asset on your balance sheet, and then recognize a $10k expense (assuming a 10 year useful life) in your income statement each year over the next 10 years, and that $100k asset balance would decrease by the corresponding $10k each year.

By the end of the 10 year useful life, you have recognized the entire $100k of cost in your income statement, and you have $0 left as an asset on your balance sheet. Then the company likely spends another $100k to replace the equipment, and we repeat the process. Add to the balance sheet, expense through the income statement.

 

[dmastro]

I'm not sure this venture expects to be profitable initially. This is a necessary up-front infrastructure cost to support the sale of millions of EVs, and profitability to an extent will be indirectly measured by all those cars they sell.

 

[dbsb3233]

It absolutely is germane to the point. It is by spreading the depreciation cost over the useful life of the asset, that you get a true sense of the annual cost of building/obtaining/maintaining/replacing the assets necessary for running the business.

Otherwise, you would have misleading profit and loss statements. Let's say the business required a $100k outlay for the DCFC station and the charging equipment had a 10 year useful life before it needed to be replaced. Now if you fully expensed that $100k in year 1 getting the business off the ground, the P&L for year 1 would make it look as if the business has no hope of profitability. Then in years 2-10 you would look more profitable than you truly are because you're not factoring in any costs of the equipment.

As you say, those 6-digit charger + install costs are all part of the total cost. This is correct. But it's by taking that $100k cost and expensing it $10k per year for 10 years that you have a better understanding of the profitability of the business. No one is saying you don't ever recognize the cost.

What we're saying is, when you spend the $100k to build/install the equipment you don't expense the entire $100k upfront. You would add $100k worth of equipment as an asset on your balance sheet, and then recognize a $10k expense (assuming a 10 year useful life) in your income statement each year over the next 10 years, and that $100k asset balance would decrease by the corresponding $10k each year.

By the end of the 10 year useful life, you have recognized the entire $100k of cost in your income statement, and you have $0 left as an asset on your balance sheet. Then the company likely spends another $100k to replace the equipment, and we repeat the process. Add to the balance sheet, expense through the income statement.

I think you're misunderstanding what I'm saying. When I say profitability/sustainability, I'm referring to counting it ALL. I don't care whether it's operating expense or capital expense or cash or loan or spread over 1 year or 5 or 10, I'm just talking total $$ in and total $$ out over time.

You seem to have the impression I'm referring to only year 1 or something. I'm not.

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