With the rapid development of electric vehicles, building charging stations has become a promising investment direction. However, simply investing in charging stations is not enough. To succeed, investors need to think big and build a proprietary charging network like Tesla. By owning the network, investors can better coordinate the rollout of charging stations and electric vehicle sales. Additionally, a proprietary network confers a platform advantage that makes it hard for competitors to catch up. Just as Tesla’s Supercharger network has been key to its dominance of the EV market.
Adopt a platform view of the electric vehicle ecosystem
Mainstream automakers have narrowly focused on perfecting their electric cars. But an electric vehicle creates value only when it can be conveniently recharged. Thus investors should think of EVs and charging networks as a two-sided platform. Building more EVs requires a larger charging network, while expanding the charging network requires a bigger installed base of EVs. Tesla succeeded by tackling both sides in parallel, coordinating EV sales and Supercharger builds from the start.
Build network scale and coverage ahead of the competition
A proprietary charging network confers major strategic advantages. The network owner can best optimize station locations, pricing policies and technology standards to support rapid EV adoption. Tesla’s big head start allowed it to keep improving the Supercharger experience while rivals remain stuck in catch-up mode. Potential entrants should secure key geographic territories and prime real estate locations before the window closes.
Leverage existing assets through partnerships if possible
Not every investor can build a charging network entirely from scratch like Tesla. Leveraging existing gas station assets through partnerships with oil companies is one shortcut. Repurposing soon-to-be stranded fossil fuel infrastructure for EV charging kills two birds with one stone. Partnership models lower costs and Tap into built-in demand from gas station traffic.
Consider the long-term potential of charging as a service
Looking ahead, EV charging could evolve into a subscription-based software service like Tesla is planning. Transitioning to ‘charging-as-a-service’ opens up new revenue streams beyond equipment sales. It also allows collecting the EV usage data critical for improving self-driving algorithms. First movers who build proprietary networks stand to capitalize the most as business models shift.
In summary, investing in EV charging success means thinking big from the start and owning the end-to-end charging platform. Building network scale and coverage quickly is key to long-run dominance. Leveraging strategic partnerships provides cost efficiencies. And the future potential of charging-as-a-service warrants consideration.