Disruptive innovation, EV’s and the charging station

December 14, 2017 by Denis Pombriant

King Champ (K.C.) Gillette invented the popular form of the safety razor and made his money selling blades. He was so successful that the approach became a business model and in entrepreneurial conversations phrases like, “We plan to make money on the blades” is all one needs to say to get a sophisticated point across to investors. For the right business people, the model will apply to car battery charging stations in the not too distant future.

Numerous news outlets are peddling the abundant information that EV’s or electric vehicles will begin flooding the market in 2019. The success of these initiatives will be directly linked to the ability to handle range anxiety for drivers. This will happen in two ways.

First, marketers will need to break the gas station habit. When you see stations on every corner you get the impression that you’ll never run out because it’s too easy to drop into a gas station to fill up. That approach will be traded in for at-home charging, usually over night with additional topping off while an EV is parked at work or in a public garage. The trick is to build car batteries with greater range than a typical daily commute. That range seems to be below 185 miles because that’s the battery capacity that most carmakers are aiming at.

With that all in place range anxiety, the mind-set of wondering if you have enough power to get home eases but doesn’t go away. If you live in Wyoming for instance your range anxiety will be different than if you live in the Route 95/Acela corridor for instance.

So while EV’s are getting a ton of free advertising, charging stations stay in the background until you buy an EV and begin wondering. Some experts are telling us that the number of public charging stations available now is adequate given the perceived propensity of home-charging. In an article from The Calgary Herald, ChargePoint CEO Pasquale Romano is one such figure. But if the marketplace grows as expected what’s adequate today won’t be so for long.

Canada has some impressive stats provided by The Calgary Herald, for instance take a look at AddEnergy, a Canadian producer of its Flo network of charging stations whose CEO Louis Tremblay says,

  • The Flo network has 4,000 charging networks
  • By 2019 it expects to have 6,300 public and semi-public charging stations
  • AddEneergy added 3,000 home charging units this year and expects to grow that to 12,000 home units in early 2019

Add to this Navigant Research’s estimate that global sales of chargers are expected to increase from 875,000 in 2017 to 6 million in 2026. Canada’s portion of that 6 million will be 80,000 from a base of 10,000 today.

  • Navigant also sees a compound annual growth rate (CAGR) of 29 percent between now and 2026.
  • The numbers go on like this abetted by EV government sponsored sales incentives of as much as C$14,000.

This strongly suggests an economic K-wave forming. As we’ve written before, disruptive innovations, such as EV’s, drive economic activity and the bigger the disruption the greater the activity. Inventing a new way to drive and to fuel a car is about as big as it gets in the private economy. For more proof the original disruption brings along with it numerous other disruptive products spawning whole industries that make the original disruption more useful.

We saw this three generations ago when the emerging auto industry influenced creation and expansion in petro chemicals, roads and other infrastructure, and a variety of parts providers. It all came together in a set of intertwined and sophisticated supply chains that run big parts of the world today.

EV’s are recapitulating the original journey of the auto industry which is causing the start of “The Age of Sustainability” and it won’t end here. Current charging paradigms will be fine for a while but sometime in the next ten years they won’t be enough. We’re already seeing plenty of signs of an emerging new electric grid that is more resilient and cleaner than what we have now. Ironically and paradoxically that grid will be decentralized and will rely on more local generation for much of its power. You can envision a network that looks a lot like the model for the Internet.



Leave a Reply