We recently met with the management team of Car Charging Group, Inc. (CCGI). We really like this business model as a play on the development of Electric Vehicles (EV). We have assembled a comprehensive report on the Company, which is provided below and within other sections of the blog. We expect the hear a lot from this Company over the coming months.
During 2010, we expect there will be much change relative to the actual consumer uptake of electric vehicles. For years now, there has been much hype surrounding the promises of this industry, but with very little real adoption by mainstream end users. Finally, however, it appears 2010 very well may be the year in which the promise of the electric vehicle comes to fruition.
The most important factor driving this industry forward is the many federal government initiatives currently targeting the growth of green technologies, including Department of Energy grants and loans and a meaningful portion of the Obama economic stimulus package that provides more than $30 billion in tax credits and grants for green energy programs, with a large portion of these funds ($2.4 billion) specifically directed at developing advanced battery technologies. Additionally, an added “federal push” is being generated by the upcoming 2016 fuel efficiency mandate that calls for an average of 35 miles per gallon.
Automobile manufacturers such as Tesla Motors, the Renault and Nissan alliance, General Motors, Ford and others are lining up to offer consumers a choice of electric vehicles available in dealer showrooms during 2010. The Nissan Leaf and the Chevrolet Volt are expected to be the early market share leaders, until other vehicles are available later in the year.
While one of the most significant advancements in the electric vehicle industry over the last few years has been the development of the energy dense lithium ion battery, this technology is still far from perfect. To date, even the most advanced electric vehicles generally cannot travel even half of the distance of the average gasoline powered vehicle – and we would note this is under optimal circumstances. In cold weather for example, battery performance is greatly affected as normal travel ranges are often cut by more than half as the thermometer moves below the freezing point.
Over the next few years, technology advances are expected to solve many of the existing problems currently related to the limited driving range of most electric vehicles. Going forward, vehicle and battery prices alike will most certainly fall as production runs increase, with battery technology likely to continue to improve and issues with cold weather somewhat resolved as battery warming technology is perfected. Even with these fixes on the horizon, however, most consumers still express significant reservations regarding the limited travel range of electric and hybrid vehicles, even though U.S. government data indicates that the average American driver travels only an average of less than 30 miles per day.
Although private enterprise is acting quickly to fill this void in the electric vehicle industry by enabling electric car drivers to travel longer and farther through the installation of electric vehicle charging stations, thus far implementation of a true, public, nationwide charging station network is really just getting under way. While there are at least 120,000 gas stations in the United States, there are probably fewer than 1,000 publicly located electric vehicle charging stations in the entire country. We believe this situation creates a huge opportunity for companies seeking to fill this obvious need in the market place. Car Charging Group, Inc., which trades under the symbol CCGI on the over-the-counter market, is one such company.
With 40% of U.S. residents lacking even a carport at home, much less a personal garage, the need for public location charging stations is expected to be considerable. Today, there are an estimated 250 million cars in the United States and only about 50 million garages, the biggest gap being in high population density urban areas. A recent study from the University of California, Berkeley estimates that as much as $320 billion will be spent on charging infrastructure over the next few decades. Many researchers are suggesting that by 2015, up to 50% of all new vehicles leaving showrooms will be either plug-in hybrids or 100% electric vehicles. As the history of the oil industry relative to the transportation sector indicates, fuel has long been “big business,” and as the uptake of electric vehicles gains momentum, the electric vehicle charging station industry is expected to be no exception
Car Charging Group seeks to become the leading provider of electric car charging stations in user-heavy locations throughout North America by being the first-to-market strategic partner with property owners and municipalities in population dense areas, as well as with corporations and employers who are expected to have a high number of electric vehicles at their locations in the foreseeable future.
The Company’s car charging network will be based on technology manufactured by industry leader, CoulombTechnologies, Inc., with each charging station unit employing advanced wireless networking technology in order to connect individual stations to the Company’s network operations center. This arrangement will enable the remote monitoring, maintenance and servicing of the units as well as allow for the collection of relevant statistics such as the number of vehicle users, amount of energy purchased and whether individual units are currently available or occupied.
The Company will act as an owner and provider of electric car charging station networks with a mission to build out a nationwide infrastructure as a first-in-market leader, enabling vehicle owners to charge their cars anytime and anywhere. As part of this strategy, the Car Charging Group will own, install and maintain the electric vehicle charging stations on behalf of property owners, such as shopping mall operators, retailers and municipalities, among others. The Company initially plans to launch its services in the South Florida market and expand nationally and internationally overtime. Car Charging Group, Inc., is based in Miami Beach, Florida and began trading as a public company in December 2009.
The Company’s management team believes that by securing key strategic alliances in order to gain access to relevant high user volume locations and by investing in charging installations and station network infrastructures today, it will be able to help play a meaningful role in facilitating a seamless mainstream transition to nation of electric car drivers.
We expect a massive buildup in car charging stations throughout the United States over the next few years and we believe this company can be a significant player in facilitating a network build out. Specifically, management’s goal is to have hundreds of charging stations up and running by the end of 2010 and, through creative strategic alliances and partnerships, we believe the Company can easily triple this installation goal during 2011.
As electric vehicles begin to proliferate across the nation, we believe corporations that control this important infrastructure asset will become highly valuable, likely leading to the “roll-up” of the industry’s smaller players in coming years. We expect a very rapid rollout from this Company throughout the rest of 2010 and believe it will capture significant investor mindshare as this process unfolds and progresses.
Throughout 2010, we expect the electric vehicle market to continue to receive considerable press coverage, with the public companies involved in this massive industry and social change in transportation receiving significant investor interest.
