Supplier of electric car chargers may go bankrupt: what it means for industry
Ecotality, a top manufacturer of electric car charging equipment that received millions in federal funding, has seen its stock plummet. Sales of electric cars are growing, but not as fast as some predicted.
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“Electric vehicle sales this year will be around 90,000 vehicles,” he says. “It’s not at the level some were predicting – but it’s still pretty good when you compare that to the growth of the Toyota Prius and other hybrids.”Skip to next paragraph
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So far there are about 120,000 plug-in vehicles on American roads, according to the Electric Drive Transportation Association. Even so, that current rate of growth if sustained would only put about one-third of Mr. Obama’s wished-for 1 million plug-in cars on the road by 2015.
In response, the electric vehicle infrastructure equipment market is still expected to rise from just under 200,000 charging units sold in 2012 to almost 2.4 million in 2020, Navigant predicted in a report last year. And there are positive signs that the market is also “entering a new phase where it will be less dependent on government-funded deployments and thus required to present an attractive return on investment” for potential charging-equipment operators.
Until now, companies like Ecotality have only rarely been able to charge consumers who pull up to one of it’s “Blink” brand charging stations for a charge-up – depending instead for revenue on sales of equipment. But it’s still a major problem when companies have to give away fuel.
“It’s a very real issue if you’re going to give electricity away for free,” says Kevin See, senior analyst at Lux Research, a Boston-based emerging-technology research firm. “That’s starting to change, certainly among public stations where it matters most. But the bulk of charging today is still done at home. So even if they are charging for it, they are competing with people who have their own source.”
In such an environment, big electric equipment players like Siemens and ABB are poised to survive and meet emerging demand for growth – as are some newer companies like ChargePoint and DBT, Gartner says. Smaller entrants could find it a tougher road, though. The Ecotality road-bump could presage a potential shakeout in the fledgling charging infrastructure industry, some say.
“There’s been a lot of hype around this idea of plug-in vehicles and the result is overblown expectations,” Mr. See says. “It doesn’t mean that electric vehicles aren’t a growing market. They are – but not nearly as fast as this [charging infrastructure] ecosystem needs for everybody to survive and thrive.”
There’s also the question of political fallout if Ecotality goes bankrupt. A DOE Inspector General report last month was critical of how the company dispensed funds to support its EV Project. But Gartner points out that there’s a big difference between Solyndra and Ecotality.
With Solyndra, much of the funding went toward research and development. So when it went bankrupt – there wasn’t much left to show for the public’s investment. But even if Ecotality’s assets are some day sold, the fact is the government gets about 12,000 public charging stations to help prime the US plug-in vehicle market – and encourage automakers to make them, Gartner notes.
“Eventually you’ll have a greater ratio of cars out there that need public charging because they aren’t charging at home,” he says. “Then we’ll see a need to charge in public and a much greater willingness to pay.”
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