The Expert Podcast

One of the biggest obstacles to getting more electric vehicle adoption in the marketplace has to do with EV charging stations. There's a great article on the Wall Street Journal about why there aren't more charging stations. It's not just a matter of rollout and the number of companies putting these in service; there's actually a great deal of headwind against putting out more charging stations. They could actually be created faster if these obstacles were removed, and in some cases, there's a fight between who's going to do it.

For example, tension has erupted between businesses such as gas stations, convenience stores, truck stops, and utility companies over who gets to sell electricity to drivers. In some jurisdictions, the electricity provider, the electric company, the utility, wants to be the one who puts these charging stations in place. They're lobbying to be the provider of these charging stations and to have the licenses and the permits. But at the same time, there may be a gas station that also wants to do it. The problem is that the gas station is afraid to go ahead and put in charging stations because they have to buy the electricity from a competitor—a company that also wants to have charging stations.

It's very difficult to put in millions of dollars of investment into infrastructure to build the chargers if you're not sure if your partner that you're buying electricity from wants to drive you out of business by charging you too high of a rate to fund the electricity for those chargers. Utility companies know this. They're monopolies in most markets, and there's usually only one electric company. They want to own and operate the chargers, extending electricity sales into a new market. They have a competitive edge because they have the approval of the state utility regulators. They can pass the cost of infrastructure to all ratepayers, meaning that when they build these charging stations, they can add that as an expense to their entire business. The electric rates that people pay at their house or business—even for electricity not used for chargers—absorb the cost of building the chargers.

A private company that wants to put chargers in a gas station or convenience store doesn't have the luxury of passing along that investment to the other parts of their business. In one example, there's a gas station in Minneapolis that wants to build it, but the utility company called Excel has asked regulators to let it build, own, and operate 730 fast-charging sites within the next two years. That would be almost half of the market in Minneapolis. The $193 million cost would be paid by ratepayers, so the electric company really doesn't have to come out of pocket to build all these chargers.

There's another obstacle for the private sector, like a convenience store. EV charging requires a surge of power. Gas station owners say their monthly bills are spiking by hundreds of thousands of dollars because of that surge in electricity. Electricity rates for most commercial use are done on a metered basis, so the rate you pay is dependent upon how much your electricity use fluctuates. If you have big fluctuations in your electric use, your bill will be much higher.

The last problem is what happens in rural areas. According to the article, who, if anyone, will want to build and operate chargers along remote highways? Those chargers will have to operate at a loss for many years because there won't be a lot of people using them and paying to charge their vehicles. No rural charging stations built to requirements in rural Wyoming would be profitable until 2040—that's almost 20 years away.

The rollout of these stations is going to make a big difference. Right now, about 1% of U.S. drivers own EVs, but wait lists are growing, and automakers are expecting EV sales to keep rising. The problem is there's already a backlog of places to charge your vehicle. Some people have to wait 30 to 45 minutes just to be able to plug in, plus the charging time.

The rollout of these charging stations may seem like a no-brainer—why not just build them? But there's a lot of regulatory red tape behind the scenes. Some people are even saying that there should be government subsidies or that the government should build these at taxpayer expense.

Let us know in the comments what you think about how the electric vehicle charging system should be created and how it should roll out for the adoption of these vehicles.