EVs present different business model

TO THE EDITOR:

One of the things we in the industry need to wrap our heads around is that electric vehicles don’t just present a different powertrain — they present a different business model.

The automotive industry’s growth depended on a symbiotic relationship with the oil industry and the road-building industry, as well as parts suppliers and other companies.

The electrification of transportation also relies on relationships with interdependent industries — but very different ones.

Electric utilities and charging companies are the new oil companies and gas stations. However, there are over 3,000 utilities with different levels of engagement in transportation electrification and wildly different legal and regulatory constraints. There are dozens of charging companies, all with different business models.
Battery manufacturers are becoming key suppliers, responsible for an estimated 30 to 50 percent of an electric car’s value. Carmakers are racing to lock in partnerships or their own battery capacity.

Government agencies responsible for building roads are increasingly responsible for ensuring those roads include places to charge. The Bipartisan Infrastructure Law and Inflation Reduction Act dedicated billions to charging. However, transportation planners and policymakers are just beginning to understand how to integrate charging into communities and develop public and private partnerships to meet charging needs.

EVs already make up about 10 percent of all new cars sold in America — about 25 percent in the large California market. That means we don’t have much time to build these new relationships and business models. You might say we’re building the cars as we are driving them.

JEFF ALLEN, Executive director, Forth, Portland, Ore.
Forth is a nonprofit organization dedicated to increasing equitable access to electric transportation.