The arrival of alternative energy vehicles has caused the greatest disruption in years to both the transport industry and the fuel supply market. And the popularity of electric vehicles (EVs) is entirely justified, as they give drivers a way of supporting economic sustainability, significantly reducing their exhaust emissions, and helping to combat climate change, which is good both for our health, the quality of natural ecosystems, and the environment as a whole. In addition, even if they often cost more to buy, they offer long-term savings on fuel and maintenance costs, and, as a rule, don’t lose their value as quickly as gasoline vehicles, which also accelerate the depletion of our fossil resources. And of course, with the soaring price of gasoline, the demand for alternative energy vehicles has continued to increase even further.
Nevertheless, if these advantages are to take hold, two things are necessary: electric vehicles must be widely adopted by the general population, and drivers must have access to an EV charging infrastructure that is sufficient for them to be able to really benefit from the technology. In 2021, the EV market achieved record sales, with over 6.75 million vehicles sold worldwide—up 108% from 2020.
The Net Zero by 2050 project predicts that by 2030, 300 million EVs will be on the road, accounting for over 60% of new car sales, as against only 4.6% in 2020. In the United States alone, there were already 90,000 EV supply equipment stations (EVSE), 57,000 charging sockets, and 20,000 charging points in 2020—and that’s not counting private charging equipment.
Needless to say, as far as service stations, convenience stores, and retailers are concerned, the opportunity to attract drivers and create a new source of income by installing charging points is too good to ignore. BusinessWire has estimated that by 2024, the electric vehicle charging station market will have reached a compound annual growth rate (CAGR) of 38%. Clearly, to find the perfect locations for such charging points and the best profitability, geospatial expertise and the use of key datasets regarding hyperlocal mobility, are absolutely vital.
Using Geospatial Technology to Select the Most Lucrative Site
A number of studies have started around the world, aiming to find the best way to choose the most fruitful locations for installing charging stations. There are several ways of doing this, but often, the most accurate and effective method is to access quality geospatial data and then analyze it using a geographic information system, or GIS.
Firstly, various types of data can be used to locate suitable hotspots for new charging points, such as points of interest, existing regional electricity supply systems, and hyperlocal mobility data, including public transportation routes (buses and taxis), and information about vehicle journeys and traffic. Other factors—related to the environment, the economy, and society—may also be taken into account.
According to research published in the Annals of GIS, which exhaustively compiled numerous studies about electric vehicles, ten main criteria should be taken into consideration when selecting suitable locations for fast EV charging stations:
- Population density
- Shopping centers
- Income rates
- Transportation stations
- Petrol stations
- Park areas
- Green areas
- Slope of locations
- Land values
An additional sub-criterion is based on the walking distance between the station and the demand point. The conclusion was that the ideal distance would be under 250 meters.
However, the type of data isn’t the only factor to consider when selecting a site. Another important point, if we want to obtain the most accurate results, is the freshness of the data concerned. On the one hand, the constantly evolving market and the growing interest in alternative energy vehicles directly impact any increase in the number of charging sites. On the other, both rising gasoline prices and the context of the pandemic experienced over the last two years exert a significant influence on traffic and how people move around. Being able to access the most recent data traffic and the location of charging stations, or indeed any other pertinent data, is of huge value when it comes to business risk reduction.
Not only that, but by using GIS tools, which make it possible to employ optimization and multi-criteria techniques, companies can analyze the data collected and find the perfect site or sites to install their new charging points. More specifically, a GIS makes it possible to create spatial layers related to the criteria concerned and calculate a suitability index depending on the weight assigned to each criterion. In this way, GIS techniques can represent the criteria spatially and perform a variety of spatial analyses. Thus, the locations of the charging stations are not determined using only semantic information, but by integrating spatial information with semantic information.
To make planning a network of such stations easier and work out where demand for EV charging lies, a scoring model or a stochastic flow-capturing location model (SFCLM) can also be used. In such cases, the sample average approximation method and an averaged two-replication procedure are used.
Companies can then select sites by a process of elimination, first choosing potential areas or districts before narrowing the choice down to a specific location. Interestingly, charging stations located in suitable places have been found to have a positive effect on the model of travel, with most of them being concentrated around a region’s urban core. Once there has been a sufficient increase in the number of charging stations available, some begin to be built on the periphery of the region, thus providing drivers with an extended charging network.
Highway service stations, shopping malls, and traditional filling stations are generally considered to be ideal locations, in that they are usually points of interest with particularly high flows and mobility. Other places that would make good locations to install charging technology include hotels, public car parks, apartment and office blocks, fast food restaurants, post offices, grocery stores, and any other places where people spend from 20 minutes to an hour. So, sets of ideal locations are often found to be more or less nested.
What It Means for Businesses
Businesses are increasingly taking advantage of the boom in electric vehicles by carefully selecting the places where future charging stations will be located. By doing this, these companies can increase their income by attracting customers to the other products and services they offer. For example, a filling station would aim to attract customers to use their EV charging point and then go on to spend more cash in the minimarket, while a restaurant would try and encourage them to have also something to eat. Increases in sales are thus in direct correlation with the installation of new charging points.
Shell, an oil and gas multinational belonging to Korem’s vast customer network, tops the list in terms of revenue, with profits of US$180 billion. Some of the other most profitable companies include Siemens (US$94 billion), Tesla Inc. (US$31 billion), Schneider Electric (US$28 billion), ABB (US$26 billion), Webasto SE (US$2 billion), Hyundai Motor Company (US$1 billion), ChargePoint (US$146 million), EVBox (US$135 million), and Blink Charging (US$5 million).
Moreover, Shell has committed to building 500,000 electric vehicle chargers by 2025. In order to make more informed decisions about where to put them, the company will be using, amongst other things, Korem’s expertise to provide it with the best global data from over 16 different countries. Having acquired Greenlots, an LA-based developer of electric vehicle charging systems, in 2019, followed, by Ubitricity, a UK charging point operator, in 2021, Shell wants to offer a growing range of alternative energy sources.
“As our customers’ needs evolve, we will increasingly offer a range of alternative energy sources, supported by digital technologies, to give people choice and the flexibility, wherever they need to go and whatever they drive,” said Mark Gainsborough, Executive Vice President of Shell.
Parkland Corporation, a Canadian convenience store operator and independent fuel retailing company, is following the same strategy. By the end of the year, the company—also one of Korem’s customers—plans to roll out 25 ultra-fast charging points throughout British Columbia, and, in a few years’ time, its “Electric Charging Destination of the Future”.
Last year, a number of electric vehicle charging infrastructure companies invested large sums in response to the growing demand for alternative energy vehicles. For example, EVgo merged with Climate Change Crisis Real Impact for a valuation of US$2.6 billion; Volta Industries merged with Tortoise Acquisition II for a valuation of US$1.4 billion; and Riverstone Holdings, one of the biggest names in private equity energy investment, invested in FreeWire, a Californian energy solutions and equipment company that raised US$50 million in funding in 2021.
Korem’s Geospatial Expertise Facilitates Arrival of EVs
With an ever-growing market for electric vehicles, and, by extension, charging stations, many companies would do well to invest both time and money in acquiring quality data and developing a geographic information system that meets their exact requirements. By combining these resources with Korem’s expertise, they will have all the tools they need to choose potential sites for charging points faster, more effectively, and more accurately.
Obviously, familiarity with the data, the technology, and the market is the key to success in today’s constantly changing world. Our team of experts can guide you through these new advances and help you make the most of them. What’s more, thanks to our contract advisory service, we can make sure that you get the best possible prices, terms, and conditions, to help you make truly informed decisions on behalf of your organization. Contact us now and you too can start to take advantage of the arrival of alternative energy vehicles!