The Commonwealth Government, and indeed many State and Territory Governments, have introduced grant programs to accelerate the delivery of public EV recharging infrastructure in Australia in recent years. A quick analysis of the nature of the grants made to date reveals two things. First, the majority of Commonwealth Government grants awarded to date have gone to just two EV charging companies – Charge Fox and Evie Networks. While this has changed in more recent times, with companies like AMPOL and NRMA securing substantial funding, there remains a significant question about the future shape of market competition in the Australian EV recharging in the longer term.
“The second issue is a more immediate one and relates to the type of infrastructure that is being funded and whether anyone is actually using these chargers”, said ACAPMA CEO Mark McKenzie.
To understand the usefulness – or utility – of the EV infrastructure that has been co-funded by Australian governments to date, we first need to understand the various types of chargers that are available for electric vehicle charging in Australia. There are essentially four groups of EV chargers available in the Australian market, namely:
- AC Chargers (7-22KW) – these chargers are the cheapest form of chargers and typically used for home-based charging, in office carparks, and in public parks. Typically, these chargers deliver enough electricity to travel between 40km and 120km per hour of charge and vehicles are connected for 8 hours or more (i.e. often overnight).
- DC Slow (25KW) – these chargers are the next cheapest to purchase and install. They are commonly used for commercial vehicle fleets or in government depots. Unlike the AC Chargers, electrical energy is delivered directly to the car’s onboard battery (as opposed to requiring the onboard charger to convert AC current to DC) to provide a driving range of between 100 and 150km per hour of charging time. Vehicles are typically connected to these chargers for 4 hours or more.
- DC Fast (50-150KW) – these chargers are the types of chargers that are increasingly appearing at highway rest sites, airports, and some service stations. These chargers are more expensive to purchase than the first two types of chargers and will often require improvements to the electricity grid to support their operation. These chargers will provide a driving range of between 40 and 120km per 10 minutes of charging time.
- DC Ultra-Fast (150KW to 350KW) – These chargers are the most expensive available on the market, although much of the cost is associated with the need for the equipment owner to spend money improving the capacity of the grid offsite to accommodate the high electricity draw. The principal benefit of these chargers is that they can deliver a driving range of around 400km in just 15 minutes of charging time, making them ideal for service station operation.
While there is a fifth class of charging that involves inductive charging, where the vehicle is charged by driving over a recharging surface. This type of charging is largely at a prototype stage and therefore not worth considering in the context of this particular discussion.
There are around 3000 EV charging sites in Australia at present, compared with around 7,100 service stations. At first glance these numbers suggest that the total population of EV Charging sites is fast approaching 50% of all service stations in Australia. But such a comparison is flawed given that the vast majority of these ‘charging sites’ comprise a single two-plug charger that requires a vehicle to be connected to the charger for at 3-4 hours to get enough charge to travel 400 kms.
EV chargers that provide rapid charge times are not only more expensive to purchase, but they are also considerably more expensive to install because they often require the charging site operator to pay electricity companies to augment the grid near the site in order to realize the ultra-fast charge capacity and times.
“Early information from the small number of ultra-fast EV Charging installations to date is that this augmentation cost can be three to four times the cost of the chargers with service station operators forking out $300,000 or more to support a single two-plug fast charger installation”, added Mark
Given the superior consumer convenience of these high-cost fast chargers, you might have thought that government grant funding programs would be designed to accelerate the provision of this infrastructure by helping to defray the substantial capital costs of ultra-fast charging infrastructure.
Sadly, at least so far, the reverse has true. In fact, the majority of government funding provided to date has been used to fund the slower charging infrastructure (i.e. 50kW – 100KW) that delivers recharging times that are only marginally better than charging at home.
A previous trial of electric vehicles conducted in Victoria in 2009 and 2010 concluded that more than 85% of EV users charged their vehicles at home, largely because the public EV infrastructure available at the time required the vehicle to be connected to the charger for long periods of time.
“When you look at the current government programs, it again appears that funding is being used to fund the cheaper, low speed chargers that very few people appear to be using”, said Mark.
A review of EV charger usage information in NSW (as sourced from Transport NSW at https://opendata.transport.nsw.gov.au/dataset/electric-vehicle-charging-stations-nsw) reveals that the current usage of the EV infrastructure funded by the NSW Government, and operated by the NRMA, is relatively low.
Usage data for 9 regional NSW chargers (50-100KW dual plug chargers) revealed an average of just 69 charging sessions per charging site during the month of March 2022. The highest utilisation rate was observed for the charger at Yass (i.e. 179 charging sessions per month, or around 6 per day) and the lowest was Walgett (i.e. 4 charging sessions during the month). Interestingly, the latest round of EV charging grants announced by the NSW Government appears to have been solely allocated to NRMA for an increased number of these types of charging sites.
Compared with the number of fuel visitations for a comparable NSW regional service station selling around 2.4M litres of fuel per year – that is around 300 customers per day – the EV charging sites being operated by the NRMA (and co-funded by the NSW Government) appear to be grossly underutilised, raising significant questions about the taxpayer return from current government EV charging grants programs.
When you examine the nature of each charging session, vehicles were connected to the NSW chargers for an average of 41 mins and an average recharge of just 24KW during the month of March 2022 – which equates to a driving range of around 150km. These numbers compare with an average refuelling time of 8-10 minutes, and a driving range of around 800km, for a conventional vehicle at a comparable regional/rural service station.
“By any measure, the current government approach of funding large numbers of cheaper/slower EV chargers over smaller number of higher cost ultra-fast chargers is delivering sub-optimal results for taxpayers and EV users alike”, said Mark.
While part of the current low usage level might be explained away by the very low number of battery electric vehicles in the national fleet (i.e. EVs accounted for just 0.1% of the 20.1 million vehicles registered in Australia during 2021) and the low number of annual new passenger car sales (i.e. 1.7% of the 1,050,000 vehicles sold in 2021), the current level of EV charger usage is poor in relative terms.
“The idea that a service station owner would invest north of $200,000 to install a single two-plug EV charger to attract an additional 6 people per day to visit a service station site, makes a mockery of the suggestion that investment in an EV charger makes sense for a service station business because it will generate increased sales of food, coffee, and grocery items, said Mark.
Even ignoring the recent tripling of the cost of wholesale electricity prices in Australia, the current usage data in NSW suggests that a $200,000 capital investment and a typical commercial charging price of $0.50 per KWhr would deliver net revenue of around $11,000 per year and a capital payback period of 18 years (at 0% discount rate).
“If anything. this analysis invites further conversation about whether Australian Governments’ might tweak their existing approach to funding of EV infrastructure by working directly with the service station industry to fund the ultra-fast high-powered chargers that deliver a vehicle recharging solution that more closely equates the refuelling characteristics for a conventional vehicle,” concluded Mark.
Is such an approach self-serving? Undeniably so, but no more so than the current practice of funding EV charging start-up companies and motoring associations to provide charging infrastructure that is unlikely to be relevant in the future – and does nothing more than make these companies look ‘greener’