FORCE Wealth / ROTH Capital Partners Panel

A record number of corporations announced plans to reduce their carbon footprint, the new Biden administration is more environmentally-focused, and more state and local governments issued mandates to phase-out internal combustion engine vehicles (ICEV). For example, California recently announced that it will phase out gasoline-powered cars and, that by 2035, all new cars and passenger trucks sold in California will be zero-emission vehicles. And New Jersey approved an ambitious EV deployment program that set a target of 330,000 EVs on the road by 2025 and 2 million by 2035. All of these programs are creating major moves for EV.

In the commercial EV space, California and New York are already taking major steps toward electrifying larger vehicles and fleets. California will require manufacturers who certify Class 2b-8 chassis or complete vehicles with combustion engines to sell zero-emission trucks as an increasing percentage of their annual California sales from 2024 to 2035. By 2035, zero-emission truck and chassis sales would need to be 55 percent of Class 2b-3 truck sales, 75 percent of Class 4-8 straight truck sales; and 40 percent of truck tractor sales.

In an effort to help fleets start thinking about strategies to meet future EV adoption standards, California also has new reporting regulations in place, which require large companies and fleets to report information about their shipping procedures and existing fleet operations.

In New York, the state has pledged more than $16 million to five of the state’s largest transit operators to be used for the expansion of electric bus usage, as well as an additional $2.5 million to support the purchase of cleaner buses as the state works toward 100 percent zero-emission fleets by 2035. The New York Port Authority also announced, that its new 900,000 square foot bus terminal will be fitted with charging stations to handle a fleet of 100% electric buses.

With such a seismic shift comes monumental opportunities. This change will disrupt every aspect of the $3 trillion transportation industry including vehicles, infrastructure, retailing, and service.

“Whether an auto manufacturer produces a car that’s powered by diesel, gasoline, electricity, or for that matter, tomato sauce, it’s not really going to change the dynamics of their business,” said Michael Farkas, CEO of Blink Charging Co. “They’re selling a car unit. The real value here is the switchover of the fuel source, and who’s going to benefit and who’s going to be negatively impacted the most. Obviously, it’s those that supplied the gasoline of today that are going to have some problems, unless they diversify and get into, you know, in our space.”

Much of the panel’s discussion centered on the diverse variety of forms that EV charging infrastructure can take, both in terms of the technology involved and the business model tied to that technology. For instance, while a company like Blink focuses on a more traditional model that involves designing, manufacturing and installing residential and commercial charging stations that essentially mirror the idea of existing gas stations, Beam’s hardware can be installed in less than five minutes and isn’t even tied to a location’s existing electrical grid. Meanwhile, providers like Ideanomics and Nuuvy operate largely in the background, facilitating the various integrations and other logistics needed to make EV charging infrastructure more efficient. Regardless, the panelists all agreed that their companies’ business models are a direct reflection of the technologies they offer, and vice versa.

“We haven’t by any means closed this circle; we’re just opening up a whole new way of doing things,” said Desmond Wheatley, CEO of Beam Global.

“So it’s not one or the other. It’s that one enables the other. The revolutionary technology, our ability to rapidly deploy and to not have a utility bill and to survive blackouts and brownouts and to support any provider in the space – whoever they are, however they want to go about the business – that enables the business model and allows for these other recurring revenue models, which are not tied to unit costs of energy sold, because our unit cost of energy is zero after we amortize for the equipment.”

To solidify their revenue streams while still doing their part to save the planet, EV infrastructure vendors have become increasingly creative. In some cases, it’s something as simple as selling some of the electricity they produce as a wholesale commodity, while in others, they’re partnering with corporate sponsors who cover the up-front costs while also providing free charging for consumers, a considerable carbon offset for the community, and some favorable branding for their business.

Armed with these types of cost-neutral charging infrastructure models that will only further the relative ease of EV adoption, even for larger fleets and larger vehicles like school buses, the future is clearly bright for the industry. As EV manufacturers like Tesla dominate the conversation even though they’re yet to dominate the automotive market as a whole, the panel discussed the prospect of EV market penetration reaching up to 25 percent, and what that might mean for them.