Why EV charging businesses will never make money?
By: Ajay Singh
Tags: Charging Station, Ev, Charger, Ev Charging, Electric Car

A lot of discussions, talks and summits are getting organized on EV Charging space in India and Internationally.

A dream come true, by going electric you save the environment and lots of “buzz words” and confusing government policies on a daily basis.

India as a huge nation is a big market for any car maker to in-cash EV charging with government initiatives, every day a lot of startups I meet are pitching on how unique their solution is vs. the competition.

Most of these startups have developed the same Open Charge Point Protocol (OCPP) from the same charger manufacturer with the same approach to be a market leader in the same EV charging market.

Without realizing the future internal & external competition even long before foreign companies from USA and Europe enters into Indian EV charging market.

Now the main point on how to make money? No EV charging startup can answer this question truthfully how they are going to make money from charging the car as so many others are doing exactly the same and on top of that government is again making its own infrastructure to make charging open and affordable to all.

All the Charge point operators (CPO) will face intense heat from the market and customers as well. A new eCommerce business bubble kind price war will fuel the competition even more and more.

Let’s look at Europe and the USA. All the EV charge companies are raising rounds of funds to keep floating with a 7 to 10-year breakeven point of hope.

EV charging business in India and any part of the world will have real hard time making money.

Especially in India for reasons like:

No EVs on road: Less than 0.5% Evs are on road in India as compared to Norway, nearly 55% of cars sold on are Electric.

Power Theft: Discoms are in huge loses in India, Power theft for the purpose of charging of e-rickshaws has cost the distribution companies in Delhi approximately ₹1.5 billion (~$21.08 million) in a year, according to a report from PTI.

Policy update: Every other day Government is coming up with new policy completely ignoring existing spare part suppliers/ manufacturers as many two-wheeler companies opposed the faster adoption of EV especially in 2-wheeler segments.

Cheap power: Some of the EV chargers will be powered by Solar energy, which will again bring down per-unit cost and margins for aggregators.

EV charging station companies are suffering worldwide to earn money with very high valuation and no ROI. In India story will remain the same till the EV space is mature enough and the cost of storage devices comes down, so power can be produced locally cheap and stored and transferred with minimum infrastructure.

A lesson should be learned from Solar EPC companies, as margins shrank many companies completely shut down residential rooftop segments in India.

EV charging will be a volume-based game and makes sense for commercial vehicles only.

Till the time we have problems like power theft and high cost of Electric vehicle, low margins, and open market. A charging network will not make money at all.

Even after its only be good enough for the survival and value and valuation game for the investors.

Pro tip: Innovation is the key!

How? get in touch.

Ajay Singh

ajay@nimray.com

President-NimRay SOLAR

Global Energy Award winner by Le Monde France in Singapore.

Young Leader India France-Selected by French President Emmanuel Macron. Supervised by the French Embassy in India.