We talk to the boss of one of Europe’s largest charging point manufacturers about the current state of public charging infrastructure, the speed of electric vehicle take-up and the controversy around subscription fees for its POLAR network
By Will Dron on April 5, 2012 3:34 PM
Chargemaster boasts partners that include Transport for London, car rental firms, supermarkets, energy companies and more than 15 local authorities across the UK. The company is also working with partners throughout Europe.
But it isn’t exactly plain sailing… is the take-up of electric vehicles too slow to sustain the business? Are free-to-install and access charge points from other companies jeopardising his plans? And are carmakers throwing a spanner in the works by not agreeing on a single charging standard? Let’s find out.
TCP: Many see the electric vehicle market growing slower than expected – how’s Chargemaster doing as a business right now?
DM: Very good. We’ve had a very successful 2011 and started 2012 with a very exciting order book. I know the market for EVs is going more slowly than many people would like, including us, but the market for charging posts is going well, particularly in mainland Europe. Over 50% of our sales are to France, Holland, Germany, Austria and so on. But we’re very pleased with the way things are going – in December and January our turnover was over double what it was in the same time last year.
TCP: And have you had to revise your business plan at all?
DM: No, we’ve got two arms of our business. There’s the sales division where we sell charging points to private customers; the public sector – TFL, local authorities, PIPs, etc.; and the private sectors – supermarkets, British Gas, Hertz, and so on. Then we have our own network called POLAR, where we get revenue from the consumer, who pays via subscription. So we have two separate business models. 95% of our turnover last year and this year will be from our sales division, whereas we expect POLAR to grow over the next six years.
TCP: What were you doing before you started Chargemaster?
DM: I ran Trafficmaster, a company that has traffic monitoring equipment on motorways. I started that in 1989, floated it on the stock market in 1994, and ran it for 18 years. Prior to that I had an interest in aviation, and prior to that I was racing in Formula Ford in the ‘70s.
Trafficmaster sold to a private equity company a couple of years ago.
Mulberry House, Chargemaster's HQ in Luton, England
TCP: Why did you decide to start up Chargemaster?
DM: We felt that, as with the advent of low carbon motoring and plug-in vehicles, there was going to be a huge requirement for infrastructure. Obviously with a background in infrastructure with Trafficmaster, we felt that the skills we had would be well served in growing a significant business in that area. And that’s proved to be the case. My technical director from Trafficmaster joined me, along with a number of other staff. We currently have bout 40 staff here. We do all the design and development here and then subcontract the actual assembly.
So it’s really the market opportunity. With your website you obviously feel that plug-in vehicles have a big future; well, we feel the same. But you can’t compete with the big OEMs [‘original equipment manufacturers’, or large, established manufacturing companies] in terms of producing vehicles. Some are trying – the likes of Tesla and Fisker, for example, but it’s a fairly niche, tough market – but we feel as entrepreneurs that there’s a bigger opportunity in creating the infrastructure that’s needed, which those carmakers aren’t interested in. Well, they’re interested in the fact that it’s there but not in developing the technology themselves.
TCP: The POLAR network launched last year. What’s the premise of the scheme and how does it work?
DM: We see governments in this country and other European countries not having the capital expenditure to spend on infrastructure increasingly in the future. And we see the cutback of public expenditure as an opportunity to create our own infrastructure. So we’re investing an initial £10 million in our own network across the country – some 4,000 charging bays will be in place by the end of this year.
The business model is that when someone goes in to buy an electric car you get offered a POLAR subscription, which is about £20 per month. For that subscription you get a free Homecharge unit installed at your home, you get a card that gives you access to our national charging infrastructure, and you also get access to a low cost electricity tariff at home.
So our long-term plan is to have several hundred thousand subscribers paying £20 a month for access to the network.
TCP: The payment model is by monthly subscription, which is unique at the moment. Do you think your subscription model is the way to go?
DM: We think so at the moment. I always put it in context with the early days of mobile phones – when you bought a mobile phone 30 years ago, the only option you had was a subscription. Now you have Pay as You Go (PaYG) and all sorts of different combinations. We do see other pricing schemes emerging, but initially we do see a modest subscription fee as the way to go.
TCP: And what would you say to the people in the EV community who reckon charge points should be free to access without subscription?
DM: Well, I would say to them, do they expect to go into a Shell station and get free petrol? People are going to have to pay a fair amount and charging an EV costs less than £2, which is a lot less expensive than filling up a petrol car.
There will be PaYG models and I know a lot of people are saying they’d prefer a PaYG model, but I personally feel that if you’re having to pay £4 or £5 for a recharge they’d push back on that as well. You can’t win. But I think anyone who says it should always be free is living in an unrealistic world.
"I think anyone who says charging should always be free is living in an unrealistic world. Do they expect to go into a Shell station and get free petrol?"
And Government shares this view that the end of the PiP programme, which is April next year, people are going to have to start paying a sensible commercial rate – one that is sustainable. And that’s a fact of life. I’m not ruling out the fact that we may have PaYG pricing, and I can’t tell you how much that will be, but people are going to have to pay something.
When you bear in mind a typical EV goes about 100 miles, to fuel that with petrol or diesel it’ll cost you £13 or £15 or so,
whereas you’d be getting nearly a month’s use out of a subscription to POLAR for that.
TCP: So how many charging posts have you installed so far?
DM: We’ve got a total of about 800. We started on the south coast; we’ve already covered about 25 towns and cities in the south of the country – places like Bournemouth, Poole, Southampton, Brighton, Eastbourne, Exeter, Bristol – right up to along the M4 corridor at the moment – places like Reading and up to Oxford and so on. The plan is to cover 100 towns and cities by the end of the year, and we’re on schedule to do that.
A POLAR network home charging unit
TCP: Do you think the roll-out of charging infrastructure will have a significant impact on the sales of EVs? Do you have a “If we build them, they will come” attitude?
DM: Well, I would put it as a negative, saying if you haven’t got them you won’t sell EVs, rather than saying if you put them out there you’ll definitely sell EVs. If you’re selling Nissan LEAFs or Renault Fluence ZEs in Bristol and you haven’t got any charging infrastructure in the town – which you haven’t, apart from ours at the moment – then it’s a very hard sell. Most people will charge at home, but if they want to go out to shops or to a restaurant or something like that, they want the comfort that they can charge up when they get there.
Some places are quite well served – London is well served, the North East is well served, and a few other parts of the country – but there are lots of areas that still haven’t got any at all.
TCP: And making sure they’re the right type of charger is important – lots of places are 13amp slow chargers at the moment… how do you feel about power and types of plug?
DM: Well all our units are what we call Combi Charge, so a 7kW and 3kW mixture, because you’re always going to have some legacy cars with the old type of plug. For instance, all the existing Nissan LEAFs have only got a 3-pin 13amp plug – they haven’t got a Type 2 plug.
But increasingly we see faster rates of charge. Just recently we won a contract to install charging points for Renault in France – they’re all 22kW, three-phase units because most of the Renault range is going to be AC fast charge. And they will go up to 43kW AC, so you can charge your Zoe, when it comes up later in the year, in under an hour.
But of course, there’s no point in putting faster charge units out there until there are the cars that can take it. We have still got this dilemma where we’re putting some DC quick charge units out there for Nissan, but – and I think this is the biggest technological challenge the industry has got – the Nissan Renault Alliance have not made their mind up on which way they want to go for a faster charge.
I mean, I was in France yesterday, and we are bringing out a combined DC/AC rapid charge unit, which is clearly going to cost more money to build because it’s got to have both technologies in it, but Renault are going one way and Nissan are going the other way. Which is all a bit silly. But that’s the way it is, and it’s not unusual in the early stages of an industry, but it’s a bit silly when it’s effectively one organisation that’s got that confusion.
TCP: Which means you have to be more flexible, I guess?
DM: You have to be more flexible, and Nissan are pushing very, very hard for people to put DC rapid chargers out there. And I can understand the reasoning for that, because it’s obviously attractive if you can charge your car in 30 minutes. But you have to bear in mind that in a year’s time there are probably going to be more Renaults sold than Nissans, and the Renaults won’t be able to use those DC quick chargers. So a combined unit is probably the answer.
TCP: Some people tell us that they see charge points on the roadside that never get used. Where do you feel charging points are best located?
DM: First of all, we look at charging points as somewhere you’re going to spend time. It’s not like a petrol station, where you’re going to stop for 10 minutes, so we don’t really believe there’s much point in having charging points on the motorway, for instance – they will be where you’re at for shopping, at home obviously, at work, hotels, restaurants, station car parks and so on.
The reason people mention to you that charging points are not being used is obviously because there aren’t many cars around yet. I was over in Amsterdam last week and we have a major contract with the City of Amsterdam, whereby if you buy an EV in Amsterdam you can apply to the city to have a charge post put outside your house, which is supplied by us. They’re really well used.
Also, the Daimler car club Car2Go operates electric Smarts out there – there are about 300 of them and there are about 1,000 EVs in Amsterdam in total – and the charging points are really well used. It’s very satisfying to go along the road and see these cars all being used and being charged.
And we will start to see over the next 18 months a much greater population of EVs. I think on your own website – which, by the way, I’m not just saying it because I’m speaking to you, I think is by far the best of the EV websites – I think you show something like 29 new models coming out in the next 18 months.
David with a POLAR network public charging post
TCP: So, do you think public charging infrastructure is relevant to plug-in hybrid drivers?
DM: It’s not so critical for either an extended range electric vehicle or a plug-in hybrid, because you’ll do most of your charging at home and when you get to the end of your range you can just use the petrol or diesel. But to get the maximum benefit out of a plug-in hybrid, you will plug it in whenever it’s convenient.
I think the most exciting cars coming will be the BMW i3 and the Renault Zoe, and obviously they need public infrastructure.
TCP: And apart from infrastructure, what do you think needs to happen to boost EVs into the mainstream, and when do you think that might happen?
DM: There are two barriers that make people think twice about a plug-in vehicle – one is the cost, and I think that’ll start to reduce over the next two years. A number of manufacturers are planning price reductions or new models that will be a slightly lower price. And then you’ve got Renault who’ve got a lower initial price because you lease the battery, so it’ll be interesting to see how that works.
But the second is the ability to charge, and I think with the rollout of POLAR, that will take away a lot of the concern over range and charging. And therefore by this time next year, with some lower cost cars and the POLAR network right across the country, that will be a stimulus to the growth of the market.
"Electric vehicle sales will still be slow this year and next year – we’re only expecting two or three thousand cars sold this year, maybe about 12,000 next year – but then it will start to grow quite rapidly."
I take the view that it will still be slow this year and next year – we’re only expecting two or three thousand cars sold this year, maybe about 12,000 next year – but then it will start to grow quite rapidly. And if you look at the growth curve of mobile phones, or even the Toyota Prius hybrid, the first three or four years was flat and then you start to get to the stage when they’re socially acceptable – when you go to a dinner party and someone across the table has bought one. And when you’ve got a friend that’s just bought an i3 BMW you start to think, “Ooh, I think I’ll have one of those.”
TCP: The National Chargepoint Registry, commissioned by the Office for Low Emission Vehicles, starts soon. Do you believe it will help to have a single map for electric car users to find all public charging points, regardless of who owns the points?
DM: Erm, yes, it will help although I think there are a number of ways to get the information already. I also have a few concerns about who will be responsible for keeping it up-to-date, but that’s a different story.
TCP: The map is being pulled together by your rival POD Point, and the data will be in their hands. Did Chargemaster apply for that gig?
DM: No, no, we didn’t. We’re not in that market. We have no interest in a little project like that, and we didn’t apply for it.
TCP: What vehicle do you drive every day?
DM: I drive a Nissan LEAF every day. We currently have four LEAFs, or ‘Leaves’, in the company at the moment. We’ve got a Chevrolet Volt, which we bought just over a year ago on eBay from New York, so it was the first Volt in the country. We’ve got a Renault Twizy on order and borrow a Fluence ZE from Renault regularly. And we’ve basically got a policy in the company of running EVs as much as we can.
We’re now based in Luton but we had our headquarters in Mayfair until last September and I used to commute up to London from Hertfordshire in the LEAF every day.
TCP: Have you or your staff ever had any range anxiety or run out of juice?
DM: No. In fact we have a bit of a competition on how low we can leave the cars. None of us have ever run out and I think you have to be an idiot to run out, quite honestly, because it gives you so much warning. You adjust your driving style and if you drive very aggressively you can get the range down significantly, but if you know you’ve got to go somewhere… I had to go to Staines and back the other day and then call in at Uxbridge on the way back. I knew it was going to be tight on range – it was 105 miles – so I drove accordingly and got back with 10 miles to spare. So it’s a slightly different way of driving, but I think it’s a lot of fun. I think that’s what will really start to sell EVs – people recognising how much fun they are to drive.
TCP: That’s a good note to end on… thanks very much.
DM: Good talking to you, and as I say I’m a big fan of your website – keep it up. It’s good to see a site with some sense being spoken and I know a number of you have been motoring journalists for some time, so that’s positive.
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