An energy reporter, for a
major daily business publication, contacted me to understand how electric
vehicle charging stations might become more readily available, particularly in
rural locales. She wondered whether the fast take up of new telecommunications
technologies, such as cellphones, cable television, and broadband, might offer
insights on what works to jump start market penetration.
Bear with
me as this apparently geeky subject offers insights on when electric vehicles might
reach critical mass, in time to achieve a significant reduction in greenhouse
gasses.
The
reporter intrigued me with a curious question whether the fast proliferation of
gas stations might provide a model for similar geographical market penetration
by electric vehicle charging stations. My
small collection of vintage gas station published road maps confirms she may be
onto something.
This late
1950s map of Iowa identifies locations where motorists can fill up with Skelly gasoline:
Marketing
101 suggests that a companies can bolster brand loyalty by offering a product
far and wide. The map identified
locations where motorists could find a Skelly station on the recently
constructed Interstate 80.
Access to EV
charging follows a similar chicken/egg challenge: car buyers will become more
inclined to buy an EV if they have confidence that access to charging stations
will not create FUD: fear, uncertainty, and doubt.
Several
parallels in telecom provide insights on what business models work.
Cellular Radio
Some
of you might remember the bad old days when a lack of vigilance when “roaming”
might result in a hefty and unexpected charge.
Before nationwide roaming, with “anytime, anywhere minutes,” the U.S.
had many standalone, “independent” operators, primarily serving ex urban and
rural locations. These carriers made a killing
by providing access to their networks by motorists speeding along a major
Interstate highway. Few noticed the icon
on their handsets (or bag phones) showing that a call was being handled by another
carrier.
The major
operators, such as Bell Atlantic, Pacific Telesis, Bell South, and Southwestern
Bell eventually executed roaming agreements with the small, independent
operators, thereby reducing or eliminating “non-network” roaming charges. The end to unexpected, extortionate roaming
charges helped expand subscribership and the eventual mergers and acquisitions that
now leave us with only three national carriers.
Cable Television
Unlike
cellular radio, cable television debuted in lots of rural areas at the same
time, or even before urban service.
First generation cable was labeled Community Antenna Television, typically
offered by local, “Mom and Pop” television sales and service ventures. These entrepreneurs offered cable television,
primarily to stimulate interest and demand for television sets.
CATV market
penetration occurred on small, town-by-town basis without coordination, or
accrual of scale economies. Rural
residence, starved for any broadcast television reception, gladly paid for
access to a few broadcast channels. Their
urban counterparts had free, off-air reception options. Only after cable operators embraced satellite
technology to deliver distant signals and new cable only content did national
penetration and subscribership speed up.
Broadband
High
speed Internet access provides a case study in a most desirable, but costly
technology largely unavailable in rural locales unless and until, private and
public actors subsidize access. This
technology has high startup costs that operators must bear before the first
dollar arrives. On the other hand, adding
an additional subscriber typically has much lower, so-called incremental costs,
especially for high density locales.
A private
venture might vertically integrate into the electric charging market to remove
FUD, generate brand loyalty, and stimulate vehicles sales. It might also install facilities using
proprietary standards resulting in incompatibility with EVs manufactured by
competitors.
A government
agency might want to stimulate demand, but typically the legislature must enact
laws creating tax incentives and financial subsidies. Unless and until incentives are anticipated and/or
funded a “Digital Divide” has resulted.
The Covid-19 pandemic underscores the consequences when broadband access
is unavailable or deemed too costly.
For
broadband and EV charging, state and federal governments may have to create
generous financial incentives to achieve anything close to ubiquitous access. Early adopters might not need as much
external funding, because they can anticipate market opportunities, such as when
a national hotel chain prioritizes the installation of charging stations.
In any
event, the past technology adoption models may offer insights on this new challenge.
