Two Cases for Improving the DC Fast Charging Economics

Public charging appears to be a lucrative business opportunity as more and more vehicle owners begin to choose EVs to replace their internal combustion engine vehicles. In fact, Guidehouse Insights’ recent report, Market Data: EV Market Forecasts, expects that the sales of battery EVs (BEVs) will grow from 682,300 in 2017 to over 5.1 million in 2025. However, the business case for public EV charging relies on a large EV population with high charger utilization to recoup CAPEX and turn a profit.

EV Charging Level Definitions

(Source: Guidehouse Insights)

However, current use of public charging is sub-optimal and, in many locations, hard to operate profitably. Today, a driver’s charging behavior is estimated to take place at home 85%-90% of the time due to the low price of residential electricity and the preference for convenience of the majority of EV owners who have a fixed parking spot. Since the average American drives about 29 miles per day, a vehicle owner can use a wall outlet, or AC Level 1 charging, overnight to recover their average use (vehicle batteries can charge up to about 4-6 miles per hour at AC Level 1). Combined with the increasingly offered workplace charging, this is forcing public charging businesses to find their competitive niche. 

One of the areas public charging can be competitive is through DC fast charging (DCFC). DCFC can add range to an EV much faster than AC charging. It is broken down into two categories: Inter-City and Intra-City.  

Inter-City DCFC Enables Long Distance Travel

Inter-City DCFC are systems of DCFC public chargers installed in intervals along highway corridors that connect cities and regions by enabling BEVs to travel and quickly recharge along longer trips. One of the more prominent examples of an Inter-City DCFC system is Tesla’s Supercharger network. Another is Ionity, a joint venture between six OEMs working toward building a similar network across Europe. Regional EV West is another example, wherein several southwest states are coordinating an effort to create a DCFC network that enables BEVs to travel throughout the eight state region. Most recently, Nissan and EVgo teamed up to install DC fast chargers along the I-95 corridor in the northeast. 

Intra-City DCFC Supports New Use Cases

Another DCFC market opportunity is in Intra-City networks. This opportunity will support two growing markets: long-range BEVs for owners without access to home charging and high utilization fleets. 

Long-range BEVs coming to market will have sufficient range to enable regular use within metro areas with infrequent charging. This advance will enable new demographics of vehicle owners who live in multi-unit dwellings and those who lack access to reliable home charging to make the switch. This new demographic will look to take advantage of DCFC to occasionally supplement their Level 2 primary charging. Second, as high utilization fleets (think Lyft, Uber, Postmates) begin to electrify, fast charging will be a top priority to keep vehicles on the road and performing tasks, as any downtime charging represents lost revenue. As both factors become more prominent in the market, DCFC will play a larger role in charging EVs.