Electric vehicle expert: The inconvenient truth about electrification

Welcome to another episode of the Car Dealership Guy Podcast.

Today’s guest is Chris Nihan, President of EVready Energy, a company that helps clients with all things related to energy and electrification. Find out the latest on EV infrastructure and hear the inconvenient truth about charging that very few people are talking about.

You can stream the full episode now on YouTube, Spotify, or Apple.

1. An unconventional journey.

Chris didn't study energy in college but found it fascinating enough to dive in. He started at the bottom in a solar company. He stayed on when Tesla acquired the company. He helped shape their energy showroom strategy for battery storage and solar across the U.S. Then came ChargePoint. There, he helped build fast charging networks. He worked with utilities and policymakers on electrification. He led ChargePoint’s strategy for automotive dealerships, helping them make smart, long-term investments. But he saw a big problem. Dealers had to install charging stations without knowing they'd face huge electricity charges. This "inconvenient truth" led him to start EVready Energy, a company that helps automotive manufacturers and dealerships navigate these hidden costs.

2. The true cost of EV charging. 

Dealerships are installing EV chargers mainly because automakers require it, not because they want to. The big issue is that dealers often overlook how utilities charge them for electricity. While most dealerships use 100-150 kilowatts, some brands require 700 kilowatts, leading to higher costs. Chris estimates that dealerships in Massachusetts could be losing over $100 million a year because of this. The main problem isn't the cost of chargers or installation, but how utilities recover costs, which varies widely. By better understanding utility rate tariffs, dealerships could save a lot of money.

3. A new approach.

While at ChargePoint, Chris helped companies and states get funding for EV charging infrastructure. But, he realized that the real barrier wasn't just the capital costs, but how utilities charge for electricity. They built payback models for DC fast charging and saw risks in different utility territories. This led to Chris working with utilities to find alternative solutions, sparking the idea for EVready Energy. He points out that rate tariffs are complex and not well understood, even within utilities. As monopolies, they move slowly, and their rate designs are often understood by a few specialists at best. On top of that, contractors in the EV industry might not focus on these issues because they complicate and slow down installations.

4. Dealership EV charging mandates.

Chris views dealerships at three levels. There are large dealer groups with many brands and states. There are individual dealers and utilities. These dealer groups often face a chaotic situation where they're mandated by automakers to install specific hardware and software for EV charging across different locations, leading to a mix of equipment and support issues. Chris' approach has three parts. First, he makes an ownership strategy for the chargers, including investments and grid connections. Second, he simplifies the management of these systems for ownership. Finally, he helps dealership management understand and use these strategies. He also assists with training sales and service staff to use the new systems.

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5. Working with the grid.

Chris thinks the grid can power the full shift to electric cars. But, there are misconceptions about needing as many charging stations as gas stations. That's not how EVs work. He points out that while the current grid isn't perfect and needs improvements, EVs could make it more resilient. Utilities often build infrastructure for peak demand times, like the 4th of July in Cape Cod, not the average day. By incentivizing EV charging during off-peak hours, we can maximize existing infrastructure. Additionally, as battery storage becomes cheaper, people could use it to balance the load. For dealerships, this might mean using their fleet of electric cars to power their operations during the day. They can charge the cars for free at night, cutting strain on the grid and costs.

6. Avoiding the pitfalls.

A lot of mistakes are made with electrification due to the structure of dealer equipment programs. Automakers often set arbitrary deadlines. For example, they may require installing EV chargers within nine months. But, this doesn't align with the longer timelines utilities need to set up new services. This mismatch forces dealerships to rush installations, leading to expensive operational tariffs. Another issue is investment obsolescence. The EV charging industry is evolving, with many new entrants and changing standards. Ford's switch from the standard J1772 CCS to Tesla's NACS connector means that many charging stations will become obsolete. Additionally, companies with non-replaceable cables started selling outdated chargers at clearance prices, targeting dealerships forced to invest now. This chaotic environment has left many dealerships with suboptimal and costly setups.

7. Choosing a charger.

Some dealers are adding charging installation as a value-added service in the F&I office, which can be quite valuable in the EV market. Yet, others are hesitant. They worry about liability and insurance issues if something goes wrong with the charging station at a customer’s home. When it comes to the hardware in dealerships, he says many chargers might need replacing. Chris recommends choosing charging solutions with replaceable cables to avoid obsolescence. He also says that public charging stations need to keep high standards. They are on maps and used by the public. In contrast, Level 2 stations and back-of-house solutions might have more flexibility. Looking forward, he anticipates more tailored programs over a one-size-fits-all approach.

8. Making use of funding programs.

Many dealerships are missing out on available funding because their projects move too fast. He expects that future programs will stress funding and offer more flexible vendor choices. For example, Porsche required dealerships to install Porsche-branded charging stations. But, Porsche doesn't make these chargers. Instead, they source hardware and software from other companies and rebrand them. This approach can work well, but it also means dealers have to deal with the limitations and support issues of third-party products. The point is that dealers need to be aware of and take advantage of funding options to avoid unnecessary costs.

9. Expenses to consider.

The real cost for dealerships isn’t only the installation of charging stations but the ongoing, often hidden, expenses. Dealers might focus on the upfront costs of hardware and software or realize the long-term financial impact. For example, a typical DC charger might cost $40,000, with software adding another $5,000 and maintenance plans around 25% of the hardware cost. But, many maintenance plans are not enough. They cover only basic issues and offer little support. Also, many charging solutions lack replaceable parts. This forces dealerships to choose between buying new chargers or struggling with repairs. But utility make-ready programs cover installation costs for charging stations and are more beneficial for dealerships than NEVI funding. NEVI is a federal initiative to subsidize EV charging infrastructure and involves a ton of red tape and competition.

10. Moving forward.

Despite regional challenges, like the ones he had traveling from Massachusetts to Ohio, Chris believes that fast chargers will become more widespread. He thinks this will increase EV adoption. He advises dealerships to pause. They should evaluate their investments in chargers and consider the whole electrification strategy. This includes battery storage, not just buying chargers. He compares the EV transition to the smartphone revolution. As costs decrease and people become more educated, EV adoption will rise. He also thinks that car makers who focus on the software in the center dash will gain lots of market share. Those fixated on traditional features, like stitching in the steering wheel, will struggle.

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