“Did you care if you filled it? No. Did you care if it was fully empty and didn't really need to charge immediately? No, you just take on some juice. And that's the way people behave when they're driving an electric vehicle.”: Pasquale Romano comparing the charging behaviour of EV drivers with that of smartphone users.
In this episode of Cleaning Up, Michael Liebreich talks to Pasquale Romano, CEO of ChargePoint.
Michael and Pasquale begin by discussing ChargePoint’s business model and how it differs from other charging providers.
They then discuss how the charging habits of EV drivers differ from the fueling habits of fossil fueled vehicle drivers.
Finally, they compare the charging businesses in America and Europe.
This is an abridged transcript of the conversation, edited for clarity.
Michael Liebreich: What does ChargePoint do and why is it different?
Pasquale Romano: I think it's a great question. I get it all the time. If you look at companies like Airbnb, for example. They become the largest hotel chain by essentially ‘platformizing’ everyone’s spare capex into one platform that's rentable by consumers. Whilst we have very different applications what we do is we make it look to the driver as if it's all one network. But in fact, every business that has a parking lot, every landlord pays for the chargers and pays us a subscription to keep those chargers on the charge point network. We look like one unified thing to drivers that can be integrated with systems, our own mobile app, other people's mobile apps, etc. But the individual business retains control of those chargers: who can use them, what the hours of operations are, is there any payment required to use them or by whom. So, one group, say employees could have things for free, maybe visitors have limited access, maybe the public can use them after hours, all kinds of things like that are possible on the platform. So what we've done is crowdsource the largest network of EV chargers on the planet. Because it's the only practical way from a capex perspective to do it. And what we've proven over 14 years is that businesses are willing to do this, they were willing to do it even in the earlier days of the electric vehicle transition. And now the transition is entering the mass market and it's become precipitous. Our fleet business that we're selling to the likes of large fleet operators, large delivery companies like commercial fleets, construction outfits, things like that. That's very, very different. That's a business sale that's when they want it for their own use. And then what we also do is we bridge the two, so we have a home business as well a home charging business, but a lot of fleets require that the vehicle get taken home and parked in the employee's driveway or on the street in front of their house. So, we have all home reimbursement, energy metering, etc. capabilities to enable those modes and we can also broker things between fleets.
ML: Is ChargePoint a hardware or software business?
PR: We're no more a hardware business than Apple is. In that the delivery vehicle for a service is a physical endpoint. In our case, it's a charger and we make those, we also have third party hardware capability on our network. We're a network company first, and that we sell a business, whether it’s a fleet, a commercial business, the ability to use our network to manage their charging infrastructure, charging them on a subscription basis. And for the most part our customers use our hardware as well, it tends to have the best integration with our network, because we can move the feature set of both in concert. So, we can have the best integration, like you'd see in a mobile phone space. But if you wanted to have third party hardware, you had some legacy hardware and wanted to have it compatible with our network, we enable that as well. The one thing we don't do is we won't sell hardware that's not associated with our network, because we just don't want that user experience and the headache of not being able to adequately guarantee a good user experience there.
ML: How does the average EV driver behave when it comes to charging?
PR: So we've got 14 years of data on this. Battery size changes the frequency of plug in, but it doesn't really change the distribution of where a driver plugs in. I'll give you some examples: if you have free charging at work and you have a 250 mile real range vehicle, of which there are a plethora of them now available on the market, you likely won’t plug in every day because you don't necessarily need to, but everyone has their own floor, their own battery level floor where they start to think about hey, the next available plug I'm going to plug in. In many cases retailers are giving you power as a courtesy or they're using it as an enticement, they're always looking at ways of getting you to sign up for the rewards card or their credit card. What that does is it gives the user a flip in how they think about feeling when you drive a gas car you drive around until a little yellow light comes on, which is always right when you're late for a meeting if you remember when we were actually going to work about two years ago, right when you're late for a meeting and you're like “Damn I gotta make the 10 minute stop on my way to the highway entrance to be able to fuel up, I'm going to be 10 minutes late for the meeting”. It’s like the cell phone model where once batteries got big enough on cell phones and you weren't searching for an outlet every two seconds to keep your lifeline to the universe alive, you stop thinking about it. You saw a wireless pad or you had an outlet at an airport and you charged up a little bit. Did you care if you filled it? No. Did you care if it was fully empty and didn't really need to charge immediately? No, you just take on some juice. And that's the way people behave when they're driving an electric vehicle.
ML: How does the EV charging market differ between Europe and the US?
PR: I don't there's too many companies chasing the asset ownership route. I think that's gonna be fairly fragile, you're going to see a lot of consolidation there, because I don't think it's very easy to resell electricity for profit. There's just not going to be enough juice there in the financial sense, to cover all the assets that people are talking about deploying. So I think it's fragmented, but it's temporary. If you look at the acquisition that we just made, we've moved up quite a bit from a market share perspective, in terms of the number of ports that are on our network. We've got upwards of 50,000 or so ports in Europe and are climbing pretty quickly. It'll take us a little bit, we've only been there about four years, in earnest and we weren't in every segment and every vertical and every language and every country and every payment and currency etc. And we're very committed to it. And we expect to have leading market share there and we expect it to consolidate. There's so much validated policy and political will. And where that has really worked, or simple things like by 2030, 2035, 2040, no more ICE sales, or no more access to the central business district of a major city, by an ICE vehicle post this date or no congestion charges, if you're driving electric.
There’s a massive amount of political will which you now have growing in the United States. And I think, by the way, it's a foregone conclusion with or without the political will that things electrify because it's a big world out there. You can't sell a gas car in the US and afford the R&D for that and the R&D for an electric vehicle in other parts of the world. So the least common denominator is electric. So every part of the world regardless of political will is going to go there but Europe's done a better job galvanising itself around what is a very big problem, climate change and so they've put those dates out there. If you look at the infrastructure bill and Build Back Better there's probably more money in the US that's being deployed in terms of billions on a go forward basis then there's on the table in Europe. I think the US and Europe and the whole world in general normalises very quickly: look at the announcements even yesterday from Chrysler, no more gas cars after 2028. Look at GM looking forward to tripling production capacity on the F150 EV.