You would be forgiven for wondering if the hype around electric vehicles (EVs) was proving to be bigger than their actual take-up and real-world use.
Twitter trolling from Elon Musk, arguably the poster-child of EV manufacturing, has perhaps helped and hindered the industry in equal measure. But beyond the controversial headlines, public opinion around EVs is changing, which means that a slow but steady usage revolution is undeniably underway.
A recent Forbes poll found that some 23% of Americans would consider buying an EV for their next car. It might not seem like a lot, but the figure is equal to eight times more than the current market share of EVs, which accounts for some 3% of all vehicles in use today. That 3% in turn equates, however, to a fairly meaningful 20 million cars – a significant uplift from the 1 million EVs which were used worldwide in 2016.
For Fifth Wall's Peter Gajdoš, technological advancements – above all, improving the price point of EVs – have now reached an irresistible stage. ‘Solar is now the cheapest form of peaker electricity. What used to cost $10 (€10.30) now costs around $1.00 - 1.50. That's a pretty remarkable win for science and manufacturing. Lithium batteries, while still behind the combustion engine in terms of pure cost, are roughly following the same trajectory.
‘More importantly, what's coming in batteries is even more exciting: silicon anodes, high density cathodes, solid state electrolytes, novel battery packs, and battery management systems, to name a few. We are truly on a cusp of rapid electric car deployment not just in Europe but also in the US.’
Venture capital firm Fifth Wall, which manages the largest property technology fund in the world, is also putting its money where its mouth is, having invested in a firm called Loop this past October. Loop, an EV charging infrastructure company, has secured $60 mln from Fifth Wall and others to expand its operations across the US and globally to meet increased property owner demand for affordable turnkey electric vehicle charging station networks.
The property world has already been thinking about how to incorporate this kind of infrastructure into its portfolios for some time. Earlier this year, Redevco formed a partnership with Shell’s Belgian business to install 330 twin charging stations for EVs at 58 retail parks.
Meanwhile, underlining the focus on the sector’s potential, EQT Infrastructure inked a deal to acquire InstaVolt, an independent UK rapid electric vehicle (EV) charging operator, from Zouk Capital. InstaVolt operates a network of around 700 charging points, with a mission to roll out 10,000 rapid EV chargers by 2032.
However, the real estate industry’s incorporation of the technology hasn’t followed a direct trajectory. To date, charging stations have often been limited to petrol stations and supermarket carparks, with municipalities allocating fairly random street charging points in cities.
Solutions like the one proposed by Loop include the delivery of turnkey EV charging networks through an end-to-end solution that enables property owners to passively offer EV charging services to their tenants, employees or customers, at a limited expense to the landlord.
According to Fifth Wall partner Ofer Harduf, businesses like Loop could prove a game changer in revolutionising charging networks, which to date, remain the weak spot in private EV adoption.
Says Harduf: ‘Loop provides a turnkey solution for real estate owners looking to deploy EV charging stations across their portfolios. The company addresses key issues associated with first-gen solutions, namely high-cost and low-reliability, that limited wider EV charging adoption by the real estate industry.
‘Buildings present unique challenges, such as limited network connectivity (especially in underground parking) and energy/power availability. The solutions offered by incumbents were originally designed for public charging and were simply too expensive to scale across large portfolios.’
He adds: ‘The transition to EVs is a significant trend that could have material implications for the real estate industry. According to some estimates, every new passenger car sold in the world by 2040 will be electric, requiring massive investments in charging infrastructure.
‘However, unlike the current "gas-station-model", the majority of these chargers will need to exist in places where people live, work and shop, becoming a necessary amenity for owners.
‘There is no one-size-fits-all approach to rolling out chargers, but many of our LPs are currently conducting a portfolio-wide review, considering factors like resident surveys, local subsidies and utilization data from existing chargers. It is becoming increasingly evident that ignoring this significant trend is a risky strategy.’
There may also be profit in it, Harduf suggest. ‘EV chargers are becoming a critical amenity that helps owners differentiate their properties, but they also create new monetisation opportunities that didn't exist before. That brings up an important consideration - while real estate owners want to participate in the potential revenue upside, they don't want to operate the chargers themselves. That's why Loop is an ideal partner for them, given their end-to-end solution.
‘Lastly, picking the wrong operator could have meaningful implications on resident/tenant experience, so our LPs took comfort in our iterative evaluation process that included over 200 companies prior to our selection of Loop.’
Beyond the private car debate, Europe-wide municipal legislation – which increasingly demands that commercial vehicles that pass downtown are non-polluting – is likely to be the last piece in the puzzle.
Ecommerce leader Amazon recently pledged over €1 bn to boost its electric vehicle fleet and create micro-mobility hubs across Europe. The online giant said that the investment would help tis electric van fleet across the continent more than triple from 3,000 vehicles to more than 10,000 by 2025. Adding to its cargo bike and on-foot deliveries from micro-mobility hubs, it’s a conspicuous commitment to cut carbon emissions which is likely to be emulated by other delivery firms as the ecommerce revolution continues to capture an important share of all retail sales.
