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As demand for EV charging intensifies, energy companies that enter the market must match their digital strategy to their business strategy.
In brief
- Understand which market segment your EV charging business will serve, and the capabilities you already have and those you need.
- Map your existing IT architecture to the new business and identify technology gaps.
- Choose a digital strategy that will augment your business strategy.
To service the rapid boom in eMobility, Europe (the EU 27, plus Norway, Switzerland and the UK) is estimated to need around 14 million EV chargers by 2025, of which home chargers will make up 81%. In the US, the number is around six million, of which 84% will be home chargers. By 2030, these figures are likely to climb to 34 million and 20 million respectively. EV charger demand currently outstrips supply by a considerable margin. In fact, for 34% of respondents to the EY Mobility Consumer Index 2022 lack of charging infrastructure is the primary reason for not purchasing an EV.
The opportunity for energy companies to transition into the EV charging space is huge. Already well-practiced in the sale of electrons or conventional vehicle fuels, EV charging is an obvious fit. But synergies alone will not guarantee success. This new market is diverse, with distinct market segments each requiring specialist charging facilities. For chief information officers (CIOs) and chief data officers (CDOs) the challenge is to marry new capabilities with digital solutions that will transform energy companies into trusted EV charging providers.
Understanding market need
Diversification into EV charging starts with understanding the end customer and their expectations. Broadly, the EV charging market splits into three market segments:
- Public charging: On streets, at designated highway locations and at destinations like shopping malls and hotels, rapid charging is essential for drivers’ onward journeys.
- Residential charging: At customers’ individual homes or in multi-unit dwellings, residential charging will be the preferred location for most EV drivers.
- Fleet charging: At large depots as well as office and commercial workplaces.
Each market segment demands different things from its EV charging service provider. Take the customers of public charging networks. They want chargers sited in premium locations, competitive pricing and reliability. For residential customers, priorities include packaged deals that bundle the charger, installation and electricity into one bill. Fleet customers want skilled technicians on call to keep their chargers up and running; they want tariffs for customers, guests and employees, and one-stop shops for office, home and public charging for fleet drivers.
To optimize the user experience, the EV charging service provider must sharpen its business capabilities, from initial marketing and sign-up, through to installing and operating infrastructure and managing the ongoing customer relationship.
Any capabilities it lacks, must be built from scratch. It is not, for instance, too much of a stretch for a fuel station accustomed to managing real-time payments at the pump to customize for EV payments. But a power and utility company, which traditionally invoices remotely and on a monthly basis, will have to adopt a much closer relationship with its customers. For that, the CIO and CDO will need to consider how the business and customer interact — possibly via an EV charging app— and revise both the payment processes and the back-end digital solutions that underpin them.
Some of the digital solutions might already exist and be readily adapted. For others, it will be a case of identifying which solution to buy, build or integrate to service the new business capability.
Optimizing IT for new business activity
Where and how much to invest in digital solutions must start with understanding the existing IT architecture. The IT blueprint will likely reveal one or more existing systems for payroll, workforce management, billing, etc., which may be provided by different vendors but linked.
As the energy company enters this new business of EV charging, the CIO and CDO should identify what works and what can be scaled; what needs to be changed or installed to give customers what they want and, ultimately, secure profitable new revenue streams. Planning for the new architecture must prioritize digital solutions that:
- Allow customers to purchase and use charging products and services, possibly via a fleet portal or a driver app.
- Enable employees to serve customers effectively with a 360-degree view over operations so that they can provide quotes for the installation of chargers or negotiate EV charging tariffs directly.
- Support operational capabilities, such as charger supply chain management, to facilitate the installation and management of hardware in the field.
Implementing the new-look IT architecture, which sits behind the EV charging solution, will likely engage one of three strategies. Each comes with distinct pros and cons that the CIO and CDO must evaluate.
A custom-built solution is designed uniquely for the business and allows new features to be added as the activity matures and volumes increase. It requires heavy upfront investment and is time-consuming (often 18-30 months to build a minimum viable product) but enables the business to differentiate itself and its products in ways that are not possible with an off-the-shelf system.
Take, for instance, multinational utility company EnelX, which acquired eMotorWerks, the developer of JuiceBox EV charging stations and the JuiceNet software platform in 2017. It has continued to expand its offering to include the JuicePass app that allows customers to manage their EV charging needs, as well as JuiceNet Operator and JuiceNet MSP, which enable charge point operators and managed service providers to monitor and manage their EV charging services.
A faster alternative is a software-as-a-service (SaaS) solution. The vendor provides all the capabilities for EV charging out-of-the-box. These low-cost and proven technologies can be implemented quickly (often within a few weeks) and suit businesses that have a mass-market strategy. Though out-of-the-box solutions do not allow for significant differentiation in the product or service, energy companies can brand customer-facing components as their own and improve their visibility.
Irish electricity company ESB offers an enhanced charge point management system based on software provided by Driivz, an EV charging technology provider. The system allows ESB eCars, which is ESB’s public charging network, to monitor network availability and operate it remotely, as well as carry out fault diagnoses and repair.
The middle-ground is a hybrid solution – a blend of custom-built and out-of-the-box solutions. It enables the business to balance its need for differentiating features with reduced cost and speed to market. Where integrations are made to a proven SaaS foundation, technology risk is reduced. The time to implement depends on the degree of customization.
Take Dutch energy company Eneco, which installs, hosts and maintains an extensive home and work EV-charging network. It uses the GreenFlux platform with an API integrated to the existing CRM and ERP systems. The platform allows Eneco to manage charger and driver additions, operations and technical tasks, and its own billing processes.
Advantages and drawbacks of IT implementation strategies
The IT strategy must align with the business strategy
There is no right or wrong IT strategy, nor a single solution which works for every EV charging company. What really matters is that the IT and business strategies align.
The EV charging market calls for different capabilities for different markets. If the business objective is to become a low-cost, mass-market player, then an out-of-the-box or hybrid system may serve the purpose very well. If the business has a niche market vision, which might include a unique, top-quality user experience, then a custom-built solution seems the obvious way to go.
The CIO and CDO should work with business management to:
- Determine your market segment, consider potential pain points and what your proposition must deliver to resolve them.
- Assess which business capabilities you need based on your future-state strategy.
- Decide which capabilities are strategic and which will differentiate you, etc.
- Analyze the fit-gap of your existing IT architecture against business priorities.
- Select the best-suited IT strategy to augment your business strategy.
Summary
Digital solutions are critical for building and scaling an EV charging business and for meeting and resolving driver needs. They may be designed for rapid rollout or customized to allow differentiation but, above all, they must be dictated by the ambitions set out in the business strategy.
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