CarCharging Lost $5.60 Per Every kWh Delivered In Q2 2014?

3 years ago by Mark Kane 52

CarCharging Brings Backs to Life 200 Blink Chargers

CarCharging Brings Backs to Life Blink EVSE

Blink DC Quick Charger

Blink DC Quick Charger

CarCharging recently released second quarter results, which indicate growth of almost everything thanks to the acquisition of the Ecotality network this past October.

Revenues increased year-over-year by 1,152% to $973,268, however EV charging service revenues stand at $315,931 (up by 8,803%).

Net losses increased, to $7,113,648 (although less on a net per share basis), which divided by 422,206 kWh delivered a month bring average loss per kWh to $5.60 (ouch).  Compared to the average price of electricity in the US of 10 to 15 cents, this result looks not so great.

Monthly kilowatt-hour (kWh) charging output rose compared to Q2 2013 several times from 50,324 kWh to 422,206 kWh.

 CarCharging’s Second Quarter Highlights

  • Total revenue increased by 1,152% to $973,268 for the second quarter of 2014 as compared to $77,739 in the same period of the prior year.
  • Revenue for EV charging services rose by 8,803% to $315,931 in the second quarter of 2014, compared to $32,227 for second quarter of 2013.
  • Net loss per common share decreased 18% to $(0.09) from $(0.11) in the second quarter of 2013.
  • Increased monthly kilowatt-hour (kWh) charging output by 7,390% to 422,206 at the end of the second quarter 2014 from 50,324 at the end of the comparable period in 2013.
  • Of the more than 4,600 Blink Level 2 public commercial charging stations installed, 63% of these are generating revenue for EV charging services, and of the 113 Blink DC Fast Chargers installed, 81% are generating revenue for EV charging services.

Michael D. Farkas, CarCharging’s Founder and Chief Executive Officer stated:

“The second quarter of 2014 demonstrated continued positive progress for CarCharging as we further executed our growth strategy in key geographic markets across North America and converted contracts with large retailers, parking management firms, and property owners from ECOtality to CarCharging. Higher usage trends and increasing demand by consumers positions us for accelerated top line growth going forward. We anticipate strengthening revenue through participating in programs, such as Nissan’s ‘No Charge to Charge’, adjusting our pricing policies, and introducing new network features.”

CarCharging Financial Results – For the Three Months Ended June 30, 2014

CarCharging Financial Results – For the Three Months Ended June 30, 2014

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52 responses to "CarCharging Lost $5.60 Per Every kWh Delivered In Q2 2014?"

  1. Three challenges ahead for CCG:

    Upgrading the Blink infrastructure so that it’s reliable and delivers a competitive rate of charge.

    Convincing EV drivers that the network is reliable and competitive after step one has been accomplished.

    Finding a new business model that makes the product desirable, instead of one that drivers use only as little as possible.

    1. ClarksonCote says:

      Car Charging Group doesn’t understand basic supply and demand. At $2.50/hr in most places, they’re charging well over the cost of an equivalent gallon of gasoline.

      Their net income would likely increase considerably (or their net loss decrease) if they would charge an amount that the market would bear, increasing percent utilization of their infrastructure and bringing in needed revenue.

  2. SeattleTeslaGuy says:

    Not surprising. Hidden gem – 422,206 kWh delivered in June 2014. Dividing this by the number of L2 and L3 stations gives an average charge delivery of 75 kWh per month per station. Based on 20 charges per month average, that means an average session is 3.75KWh – 10-15 miles. People are sipping, not drinking.

  3. Spektor says:

    This type of business either skates by or, like this, is unsustainable. I avoid fee based public chargers like poison. They are usually outrageously overpriced (thanks Walgreens/Chargepoint!) — I use the few free public chargers in my area almost exclusively. The for-fee ones cost effectively more than the equivalent price of gasoline. If the government wants to encourage EV use, then it needs to start having public utilities start putting up these free chargers. Using private, for profit companies like CarCharging or Chargepoint, using a fee-based, high cost model, is just not working, as this data shows.

    1. Phil Kulak says:

      Who cares if it costs more than gas? If I fill my car 95% of the time at home, I’m not splitting hairs for a $5 charge. Why do people care so much about a few bucks? Are cheapskates the only ones who buy electric cars?

      1. DaveMart says:

        To cover the losses it would be $5.60kwh, not a charge.

        So if you buy 20kwh, that is $112.

        A lot of people would quibble about that.

        1. Spec9 says:

          Well . . . this has a lot of accounting funny numbers. Nearly 1/2 that loss was ‘impairment of goodwill’ . . . whatever that means.

          1. DaveMart says:

            Fair enough.
            I didn’t read the detail, so the figures were just extrapolated from the headline figures.
            I had had a look at chargers in the UK though, and some of them have only been used a few times.
            That is a lot of money per charge, any way you cut it.

          2. Bill Howland says:

            I like the “Compensation”. The shareholders may be losing $5.60 / kilowatt-hour, but some of the big wigs are doing ok.

            1. Spec9 says:

              Indeed. It is not like they need many people at HQ to track the various chargers. And I’m sure they are all installed by contractors.

          3. pjwood says:

            Goodwill impairment = writing off some of the difference between the price of acquisition (market value of shares), and the book value of the company or maybe market value of its assets.

      2. David Murray says:

        I agree. I suppose if people are looking at locations near work or something where they would use it ever day, then the price might matter. But when I’m on the other side of town and need the charge to get home, I’m not paying for electricity, I’m paying for convenience. Obviously I expect to may more than usual for that.

      3. pjwood says:

        I agree with Phil. If anything, free public charging has made organic growth in chargers slow down. L1, especially, should flourish in garages, merely as safe 20 amp areas where most who only need 5-15kwh can get it. It provides a natural control on higher charge-rate freeloading, while getting most out of buying an extra $3-6 in gas, every day. L2 did not start with natural market force. Then, it practically stopped when ARRA funds/grants ran out. Now, L2 has enough footprint that operators are probably not even thinking they’d be doing a big favor just to provide a cluster of 120V outlets, near a supervised place (self-supplied charger). Instead, very little is going on in private facilities. Ones that are probably saying “no” to $10,000 – $20,000 in (~4) L2 installs.

        There’s a school near me that chose to do 8 L1 outlets, right on the signposts that say “PHEV only”. -Then again, that’s the PiP crowd, that doesn’t want to move their car, and relishes the short duration of its ~5kwh downloads.

      4. Chris says:

        Yes we buy what makes sense for our families and get tired of paying high gas prices doesn’t make sense just to hand over the money to pay the money saved on electricity

  4. DaveMart says:

    With the arguable exception of Tesla no one has come up with a business model which both provides an adequate level of coverage so that they are where you want them and you are unlikely to have to wait far too long, and which is economic.

    That rate of loss means that it would be cheaper to fuel up a PHEV than a BEV.

    That is not to say the issue is insoluble, but it is a challenge.

    1. pjwood says:

      Some truth to this, too. You can blame slow chargers, but if its an extra $2.50hr that doesn’t even put the owner of the spot in the black, even a extremely high price on carbon dioxide wouldn’t make the gas too expensive. For example, $100/ton is extremely unlikely, and high by most accounts, yet for the 3kwh/hr that replaces half a gallon of gas (optimistic) you are only talking about eliminating ~10 pounds.

      (10/2000)*100 = $.50/hr. How many different ways can we noodle it, that make pollution based regulation too expensive to work? This is part of why the organic growth will keep coming with the operators looking to attract, or regain, a customer they otherwise loose to the business with EVSE.

  5. “Of the more than 4,600 Blink Level 2 public commercial charging stations installed, 63% of these are generating revenue for EV charging services, and of the 113 Blink DC Fast Chargers installed, 81% are generating revenue for EV charging services.”

    It sounds like 37% of Level2 stations did not produce any revenue in the 3 month April-June period. That’s ~1700 L2 EVSE connections not used (or did not collect fees).

    Of the 113 DCFC stated, 104 are listed on BlinkNetwork.com … So 81% DCFC appears to imply every operational DCFC produced revenue in the quarter (allowing for an est. 10-20 DCFC that have been offline, or had reported operational issues).

    $973,268 revenue on 422,206 kWh averages to $2.30/kWh vs. cost of $5.60/kWh to deliver.
    (To be clear the $2.30/kWh is not connection cost; but includes other service fees and grant revenue)

    422,206 kWh averaged across ~4700 outlet connections is ~90 kWh/mo per EVSE. ie: Over a ~30 day period ~3 kWh/ day per connection was delivered. If 37% non-revenue L2 excluded; the ~3000 revenue producing EVSE delivered and average of ~4.8 kWh per day.

    Clearly some EVSE saw greater usage than others, but on average each delivered ~15-20 miles per day. If 4.8 kWh was per an EV charging session it would take 0:50-1:40 depending if charging at 6 kW vs. 3 kW rate f charging.

    *note: this comment is speculative in its constrained to the limited data presented in this article. In reality, the usage patterns vary between DCFC & L2 charging. Charging patterns also vary between public, and business locations (at work charging). L2 is primary used for “destination charging”, while DCFC is more commonly used for “enroute charging”. No breakdown between DCFC and Level2 session usage was provided.

  6. vdiv says:

    I have had no problem for the past year or more using the L2 Blink stations with my Volt. My total usage a month is negligible though 2-3 hours or so since most of the Blink stations around here are at hotels that I do not frequent. CarCharging will need a few million customers like me to get even, I kind of feel for them.

  7. Ocean Railroader says:

    Blink needs to have far more level 3 charging stations to help save itself. In that when you are out driving on the open road a level three can save hours of charging. Also in the scene of things a 103 working level 3 charging stations is nothing compared to 9000 level twos. I really think Blink should focus on raising the number of level threes that it has to 500. And they should try putting them in areas where the other electric charging companies haven’t been to. In that there is still a lot of room for growth.

  8. Spec9 says:

    This is why EVers have to accept that they are going to pay much more for public charging than you pay to charge at home. You are not paying for the electricity, you are paying for the chargers to be designed, built, permitted, installed, and maintained. And if you don’t pay for that then no one is going to install public chargers.

    1. Valid points. Realize you’re also paying for non-revenue generating locations in addition to the one you’re using at a public location.

      While EV drivers can’t do much about the added overhead of non-revenue stations; the station operators need to better manage this issue. Charging locations that aren’t working are costly, both to network operators and to customers.

    2. vdiv says:

      Then again if the EV driver is patronizing the business that installed the charging station and otherwise wouldn’t have, for example a stay at a hotel then what is the cost and the value added?

      1. Mart says:

        It is a well known fact that gas stations don’t make money selling gasoline. Most retailers offer some category of products at net loss or zero profit to attract customers. Coke or hamburger meat is on sale, grocery makes up the loss on hamburger buns, ketchup, charcoal, paper plates, etc.

        Businesses which are likely to attract customers who will stay for an hour or more might have incentive to attract EV or PHEV drivers with Level 2 chargers. That includes restaurants like Cracker Barrel, and hotels. Movie theaters and entertainment venues might be a destination point. Individual retailers might not find it profitable, though shopping centers, malls, outlet strips, etc. might collectively profit.

        1. Spec says:

          Yep. And this is why Charging companies need to work on getting various destinations to host and help fund EV chargers. It may be hard right now while EVs are rare but over time, having chargers will help attract people.

          This is especially true for fast-chargers on long-distance routes.

    3. ElectricRocketShip says:

      +5

      Good points, plus it is important to remember that it is a convenience. When taking longer trips, I gladly pay $5 for up to 30 minutes of DCFC at Blink.

  9. It would be real interesting to see revenue and kWh breakout for DCFC vs. Level2 for each quarter. There are 104 DCFC vs. 3879 L2 listed on Blink’s Map, so DCFC session data is lost in the haystack of L2’s.

    Seems that kWh usage and revenue are being effected by a large number of low-revenue Level2 locations. (Would expect a small number of DCFC to have minimal impact on the copious number of L2 stations) It may be worth considering relocating underutilized EVSE to types of locations known to attract higher usage. The fixed cost to be cover communication network and payment each month can be an issue for low-use locations.

    Locations that are routinely blocked by non-charging vehicles is an issue. Pretty sure most EVSE network operators have no clue how many prime time charging hours are lost as their equipment is rendered unusable. There are low cost technologies to detect if a vehicle is present and not connected to a charger.

    Additionally, the usage at DCFC vs. Level2 needs to evaluated. While DCFC may be more costly to initially deploy, how does DC fast charging compare in type and number of customers visiting each month?

    The Blink hardware is known to have reliability issues (nothing to do with CarCharging), so pairing two independent DCFCs per location would ensure EV drivers can reliability get a charge at a given location.

    Suggest EVSE network operators experiment with a few dual DCFC stations at locations that currently have higher usage. The 2nd DCFC would ensure regular customers would not be lost if a EVSE fault occurs, and instill confidence on EV drivers that a working DCFC would be available on arrival to a station. (similar to redundancy found at a fueling station having multiple lanes) By locating at higher demand locations, the 2nd DCFC would naturally generate higher revenue by serving more EVs per hour during peak traffic periods.

  10. Bonaire says:

    I see the problem. compensation.

  11. EV says:

    why is a 3 series beama in the pic

  12. Bryan Whitton says:

    Isn’t this exactly why Tesla doesn’t sell the electricity from the SC network? Musk has said repeatedly that there just isn’t a working model that allows a profit from for fee charging businesses. At least that is the way I understand it. I know my wife and I have used a for charge charger about 5 times in the 13 months we have had our FIT EV.

    1. Bill Howland says:

      Humm, well, Musk does get $2,000 per car. THe thing has the hint of a Ponzi scheme (except in this case there doesn’t seem to be any illegality), in that hopefully people buy more “s” ‘s with the $2000 option or 85 kwh where the 2000 is bundled in, then people actually use the superchargers. That is the business model I’m sure he’s banking on.

      After all, having a super long line in front of the supercharger station doesn’t look good in competitors’ advertising.

      1. Spec says:

        Meh . . I don’t think it is a Ponzi scheme. $2000 will pay for a LOT of electricity. And I don’t think Tesla plans to keep building many more EVs once they’ve got the nation covered . . . unless they sell enough cars such that various chargers are over-used.

        1. Spec says:

          many more SCs (superchargers) that is.

      2. DaveMart says:

        I love a lot about Tesla’s engineering and dislike much of what I have read about their financing, although since I have zero intention of buying shares I have not done due diligence.

        For instance, the notion that people are going to get ‘free charging for life’ when the obligation is not ring fenced with funds set aside is dubious.

        I assume subject to correction that there is zero obligation on Tesla in any case to provide any specific number of free chargers, so that if times get tough they could just pull every charger but one from the network and still be compliant.

        Personally I never count on anything which is not a contractual obligation, and the likelihood of ‘free charging’ continuing seems contingent on Tesla going ever onward and upward.

        If something sounds too good to be true it usually is.;-)

        1. david_cary says:

          The interest on $2000 – say $100 per year – pays for a lot of electricity. More than all but a few would sit around waiting for. Even if you said 50% went to building and 50% went to electricity. $50 a year would get you 3,000 miles average commercial rates. Since about 10% of miles are supercharged, that sounds pretty sustainable to me.

          Obviously if Tesla starts closing superchargers, there is a bigger problem than getting free charging. That isn’t going to happen. It is goodwill, it is advertising etc etc.

          1. DaveMart says:

            The cost is going to be mainly in property not the electricity, I would imagine.

            Maybe it is just me being old and cynical, but tough times usually roll around in due course, and I doubt Tesla will be any different.

            In tough times non-contractual obligations get the chop, although no doubt it would be prettied up a little at the edges.

            1. James says:

              Unless Tesla goes bankrupt, I’m sure the SC’ers will remain free for ever. Put simply, they are the reason that you’ll find yourself buying a Tesla Model 3 over an Audi A3/4 etron, even if the Audi has a longer range and is better optioned! What Tesla have always understood is that the road trip charging is an ESSENTIAL part of mass market EVs capable of fully replacing ICE vehicles. It isn’t some sort of nice to have, that an auto manufacturer should be happy to allow some third party to balls up, by trying to charge petrol prices for electricity from a single charge point that might or might not be working.

              1. James says:

                Or the short version:

                If you are serious about replacing ICEs with EVs, you got to enable long distance travel for the vehicles you sell.

                In other words only Tesla wants to replace ICEs with EVs, everyone else is happy if not happier for you to buy an ICE vehicle from them instead.

            2. Well said, James.

              Tesla does not pay rent for supercharger spaces. They install an amenity that attracts well-heeled customers with disposable income and 30-45 minutes to kill.

              That is a sustainable business model.

            3. Phr3d says:

              “In tough times non-contractual obligations get the chop”

              Agreed, they Can get the chop, but you have also stated how very aware Elon and by extension, Tesla is of public perception. It would be a Very deep tough time for Tesla to say, “sorry, but that money you obviously paid up front for Supercharging? it’s gone and F* you, we’re gonna charge you this now..” I can’t imagine their interim success being so high that the ‘prettied edges’ could help survive That backlash.. as a notoriously cynicold, I don’t get your focus?
              or simply, I cannot fathom this occurring, short of business failure, at which point it’s academic?

    2. david_cary says:

      Agree. I have 16k miles on my 16 month old Leaf and I have never paid to charge. When I pay 5 cents a kwh at home, I’d have to be desperate to pay $1 an hour. And why would I let myself be desperate – especially since you can’t really count on getting a charger or it working.

      Sometimes, I’m tempted to pay at sites that I could use in an emergency just to support them. But relying on that is not really a sustainable business model.

  13. ElectricRocketShip says:

    This seems like an incredibly tough business model for for-profit business. Millions have to be sunk into building an infrastructure, with little-to-no profits for years. It is a large scale, long play business.

    That said, it would be interesting to see if a member owned cooperative could make a EV charging company work. Especially if you could get several electric companies to buy in as major members.

  14. Malcolm Scott says:

    Thanks Jay, Mark, et al, on running these charging network articles. It’s very interesting seeing how the competing models are maturing. I can’t help but think the business case for public L2 charging is terrible, indicating that the least worst model is best. Given the parking space is often the high cost/revenue asset, extra for charging does not make sense if it results in poor utilisation of the parking space. There seems to be a strong case for simple basic L2 charging where the parking space owner absorbs the cost in order to derive benefit from the core business, whether it be burgers, hardware or coffee, et at. I think ATMs and public access to WiFi are examples in kind.

    Please can we have some commentary on charging network business outcomes from UK and Europe? Their investment models appear to be quite different from the US. I’d be interested to hear how success for them is measured.

    I remain surprised that electricity companies are not more active in competing with oil companies for automotive energy on the EV highway. Forget NRG, that’s just a court case driven outcome.

    1. DaveMart says:

      In the UK it is quite simple.

      It is heavily subsidised by the state to encourage alternative vehicles, just as is planned for the hydrogen infrastructure which everyone keeps moaning about.

      Neither infrastructure would exist if it were not for subsidies.

    2. Josh says:

      Don’t confuse the NRG/California settlement as NRG not being serious about charging infrastructure. They installed networks in Dallas and Houston before the settlement.

      Their CEO is an EV nut and not afraid to take risks. I think their approach of focusing on DCQCs at retail locations is good. Their execution of the plan… maybe not so good.

  15. BrianWest says:

    Blink just raised its rates today.

    1. Marshal G says:

      But switched to per-kWh pricing in states that allow it, which at least makes it more fair.

      1. SeattleTeslaGuy says:

        But substantially more expensive. At best, the cost is 4X home power rates. An hour charge with 6.6KW charger is $3.23 vs $1.

  16. Marshal G says:

    I paid to charge at a Walgreens last weekend (SemaCharge not Blink) in Anacortes WA and would have gladly paid almost any amount, since without it I would have been stuck since it is the only public charge station of any type in town. Having said that, I can’t imagine having to do that more than a couple of times a year, for special occasions when I travel outside my Leaf’s comfortable little bubble.

    In a few years time when there are 150 and 200 mile EV’s things might change because I’ll be able to take more long trips. I can imagine paying a lot more for the convenience of a quicker charge (or any charge at all) when I’m far from home. If the charge providers can hang on for a few more years they might have a chance.

    1. Marshal G says:

      I should say, I bought $12 worth of merchandise in the store that I would have bought somewhere else since I was there anyway. Any business owners considering installing an EVSE should think about that.

      1. DaveMart says:

        I agree that that is the business model to look to, and in addition think that the way to go is wireless, in spite of puritan’s notions that real men don’t mind plugging in.

        If a store has charge pads it uses zero extra space, and which would you go to, a store which has them, or one which doesn’t?

        Incidentally WiTricity thinks that they will be especially liked by PHEV drivers, which makes sense as the Volt drivers for instance use far more out of home charging than longer range Leaf drivers.

        It also makes sense for the store owners, as PHEV drivers don’t need extended charging time using up space so much.

        More here, including planned fast wireless chargers, enabling tens of kilowatts:
        http://www.greencarcongress.com/2014/09/20140902-witricity.html

  17. Stephen says:

    IMO they are simply charging too much resulting in poor utilization rates. It would be better for the whole EV community if they adjusted rates to achieve about 50% utilization. There is absolutely zero chance of plugging my Volt in if rate isn’t less tha $1/hr.

  18. Joe says:

    Let’s get real here, .49 per kWh, really? Over 6$ to go 40 miles in my volt? Yeah right! I can’t afford that. That pricing structure just encourages me to go to the nearby gas station to pay 3.49$ to go 40 miles, and it only takes a few minutes to fill up. The market is going to have to do better than this if we want to encourage ev driving.