Faster charging = Cheaper charging

Faster charging = Cheaper charging

We explore how speed of charging impacts cost of charging & various elements that influence the unit economics of an EV charging business.

We explore how speed of charging impacts cost of charging & various elements that influence the unit economics of an EV charging business.

We explore how speed of charging impacts cost of charging & various elements that influence the unit economics of an EV charging business.

Posted on

Posted on

Posted on

May 2022

May 2022

Author

Author

Author

Arun Vinayak

Sanjay Byalal

Arun Vinayak

Sanjay Byalal

Arun Vinayak

Benedict Gershom

CAC, LTV, ARR - there exist multiple metrics to measure the success of new-age internet businesses.

Likewise, the only 2 that matter for an EV charging business are:

CAC, LTV, ARR - there exist multiple metrics to measure the success of new-age internet businesses.

Likewise, the only 2 that matter for an EV charging business are:

Energy

throughput

Total amount of energy sold
at a single charger

Total amount of energy sold at a single charger

Unit cost

of energy

Cost of energy from the
grid + CapEx + OpEx

Cost of energy from the grid + CapEx + OpEx

The only way to win on both these metrics is by dramatically decreasing the time taken to charge an EV.

Curious to know how charging time is interlinked with energy throughput and unit cost of energy?

While faster charging involves a more expensive charger and a greater power infrastructure cost - it crucially unlocks the ability to charge a greater number of EVs (higher energy throughput) on the same piece of land. This exponentially reduces the unit cost of energy.

Faster charging equals

Higher energy throughput

Affordable charging

Affordable

charging

Scalable network

Scalable

network

Better unit economics

Better unit

economics

15 points for guessing who's the fastest

15 points for guessing who's the fastest.

The only way to win on both these metrics is by dramatically decreasing the time taken to charge an EV.

Curious to know how charging time is interlinked with energy throughput and unit cost of energy?

If you’re curious, here’s a breakdown of the multiple factors that influence the unit economics of an EV charging business.

For the sake of simplicity we have assumed the battery size as 10 kWh.

We’ve also assumed equal utilisation across chargers. Practically, it becomes easier to have higher utilisation when you have shorter charging times as it’s easier to manage multiple vehicles queuing up at a station.

Here’s a breakdown of the multiple factors that influence the unit economics of an EV charging business.

For the sake of simplicity we have assumed the battery size as 10 kWh.

We’ve also assumed equal utilisation across chargers. Practically, it becomes easier to have higher utilisation when you have shorter charging times as it’s easier to manage multiple vehicles queuing up at a station.

Properties

Properties

Slow

charger

Slow

charger

Fast

charger

Fast

charger

Rapid

charging

Rapid

charger

Operating Window (minute)

Assuming traffic is concentrated in a 16-hour window during each day

Assuming traffic is concentrated in a 16-hour window during each day

960

960

960

960

960

960

960

960

960

Time To Charge (minute)

Time taken per charge cycle

Time taken per charge cycle

240

240

240

60

60

60

15

15

15

Utilisation

Utilisation

Portion of the operating window for which the charger is in use per day

Portion of the operating window for which the charger is in use per day

30%

30%

30%

30%

30%

30%

30%

30%

30%

Charges/Day

Charges/Day

Number of times you can charge per day

Number of times you can charge per day

1.20

1.20

1.20

4.80

4.80

4.80

19.20

19.20

19.20

Number of Chargers

Number of Chargers

Assuming one gun per charger

Assuming one gun per charger

1

1

1

1

1

1

1

1

Charger Power (kW)

Power capacity required to charge a 10 kWh battery at different speeds

Power capacity required to charge a 10 kWh battery at different speeds

2.25

2.25

2.25

9.00

9.00

9.00

36.00

36.00

36.00

Capital Expenditure

Charger Cost

Assumed to be ₹ 12,000 per kW. A larger charger actually has lower Rs/kW as many components are fixed irrespective of power levels

Assumed to be ₹ 12,000 per kW. A larger charger actually has lower Rs/kW as many components are fixed irrespective of power levels

3

3

3

12

12

45

45

Charger Cost

Input power is calculated from the peak power requirement of the charger by assuming a power factor of 0.8 (to account for losses)

Input power is calculated from the peak power requirement of the charger by assuming a power factor of 0.8 (to account for losses)

₹ 12,900

₹ 12.9k

₹ 12,900

₹ 1,50,000

₹ 150k

₹ 1,50,000

₹ 5,62,500

₹ 562.5k

₹ 5,62,500

Expected Depreciation Cycle (Years)

5

5

5

5

5

5

Depreciation per year

Time period for the accounting recognition of up front setup costs

Time period for the accounting recognition of up front setup costs

₹ 37,500

₹ 37.5k

₹ 37,500

₹ 51,600

₹ 51.6k

₹ 1,98,900

₹198.9k

₹ 1,98,900

Annual Fixed Operating Expenses

Demand Charges

Annual fixed cost payable to the DISCOM for the live power connection. Even with zero usage.

Annual fixed cost payable to the DISCOM for the live power connection. Even with zero usage.

₹ 2,700

₹ 2.7k

₹ 2,700

₹ 51,600

₹51.6k

₹ 1,98,900

₹40.5k

₹ 1,98,900

Rent on Space

Annual rent on standard parking space

Annual rent on standard parking space

₹ 36,000

₹ 36k

₹ 36,000

₹ 36,000

₹ 36k

₹ 36,000

₹ 36k

₹ 36,000

Overheads

Annual cost of maintenance, software licenses and upkeep including gun replacement is the most significant maintenance cost for EV chargers.

Annual cost of maintenance, software licenses and upkeep including gun replacement is the most significant maintenance cost for EV chargers.

₹ 36,000

₹ 36k

₹ 36,000

₹ 60,000

₹ 60k

₹ 72,000

₹ 72k

₹ 72,000

Total Fixed Operating Expenses

Sum of all the above mentioned fixed operating costs including depreciation per year

Sum of all the above mentioned fixed operating costs including depreciation per year

₹ 87,600

₹87.6k

₹ 87,600

₹ 1,58,400

₹158.4k

₹ 3,47,400

₹347.4k

₹ 3,47,400

Charge Cycles per year

Sum of all the above mentioned fixed operating costs including depreciation per year

Sum of all the above mentioned fixed operating costs including depreciation per year

438.0

438

438.0

1752.0

1752

7008.0

7008

7008.0

Charge Cycles per year

Sum of all the above mentioned fixed operating costs including depreciation per year

438.0

1752.0

7008.0

Annual Energy Throughput (units)

Standard units kWh

4,867

4,867

4,867

19,467

19,467

77,867

77,867

77,867

BESCOM EV Tariff per unit

₹ 5.45

₹ 5.45

₹ 5.45

₹ 5.45

₹ 5.45

₹ 5.45

₹ 5.45

₹ 5.45

Unit Cost of Energy

₹ 23.45

₹ 23.45

₹ 23.45

₹ 13.59

₹ 13.59

₹ 9.91

₹ 9.91

₹ 9.91

Note: the above figures are specific to Bengaluru, Karnataka as of May 2022.

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