The Green Miner A Funny Thing Happened On The Way To My Electric Car August 12, 2013 I finally purchased an electric car. Well, leased it, actually. I got a Nissan Leaf. When I picked it up last week, the salesman had already booked my first maintenance visit a year from now. No oil changes necessary (positive). Unless something breaks down on the car between now and then, I won t be visiting the dealer for a while. Unless, of course, I need to stop in to charge up the battery (negative). I can stop at any Nissan dealer and fill er up with electrons if I need to (positive). A New Leaf We negotiated about the payments and then I specified the colour I wanted and thought the deal was closed. The salesman the Leaf specialist at the dealership told me that the car I wanted with all the details I specified was available locally. He expected I could get the car in a couple of days.
But then he called and told me things were changing. The funny thing is that Nissan can t keep up with the demand for the Leaf. In Quebec, all 50 Nissan dealers were given an allotment of only 100 of the new 2013 Leafs not much of an inventory. The next batch of new Leafs isn t expected until two or three months from now. So I ended up not getting the colour I had first asked for. I could take the charcoal grey model, or I could wait a few months for delivery. Quebec is not the best market for electric cars and that s why the sales allotment is so low here. Last month, Nissan sold 1864 Leafs in the US five times more than the amount the company sold in July of 2012. Nissan dropped the price by about $6000 per vehicle on the 2013 s and that move as well as other factors spurred sales. So far this year, Nissan has sold 11,703 Leafs in the US. These numbers aren t gigantic, but they are growing fast. Nissan is considering increasing the production of the car by one third at its new factory in Tennessee, to meet the demand. The same kind of thing is happening with the charger I tried to purchase. Bosch is a trusted name in auto parts and the company recently came out with a new 240 Volt charger for electric vehicles what is referred to as a level two charger. This model is a few hundred dollars cheaper than competing models and so it s popular so popular that Bosch can t keep it in stock. I ordered the charger online. But when I called to ask why I hadn t received a confirmation by email for the order, I was told that I will have to wait at least another couple of weeks for more units of that charger model to get to the warehouse. So for now, I am keeping my car plugged in at night in a 110 outlet. I can wait, or I can pay more for another model charger.
After spending just a few days with the Leaf, I can safely say that I like it. It s comfortable, roomy for a small car (positive). It handles well and has got plenty of acceleration when required (positive). The radio reception isn t as good as I would have hoped (negative). I ll report about more plusses and minuses of the car in the months to come. Nissan isn t the only company seeing growing electric car sales. Tesla is the early big success story of the electric car industry with its high end, widely praised Model S. The company came out last week with strong sales numbers. Tesla announced that they sold 5150 Model S cars in the first quarter. The stock has been a huge winner. The Chevy Volt has been pressured by price drops at Nissan and other electric car makers. Chevrolet recently decided to drop the price of the Volt by $5000 a unit on the 2014 models. Presumably the company will find the sweet spot for pricing for the Volt and sell more of them. The NY Times ran an article a week ago suggesting that electric cars were not grabbing much of a share of the "green" car market. So far in 2013, overall sales of green vehicles in the US hybrids, plugins and diesels are up 40% from last year. This is a huge jump. There have been sales of 36,000 electric vehicles (plugins) through July. But automakers sold 298,000 hybrid vehicles. The article pointed out that buyers were much more keen on hybrids because the prices on comparable models were much lower for hybrids than battery powered cars. And the fear of running out of a charge range anxiety is still holding back many consumers. Still the article ignored the rate of change. Growth of electric car sales is ramping up. Prices are coming down.
Charging stations are going up. Technology and range are improving. It seems from my experience that they are getting more popular. Momentum is building. This is a good time to look at a couple of companies in the car charging business that I wrote about in the past. Car Charging Group Car Charging Group has been ramping up its network of charging stations making deals and growing subscribers. Charging Station This is a first mover business and the company is not standing still. In May, Car Charging closed a deal to buy 350 Green, a nationwide network of car charging stations. This acquisition makes the company the largest independent electric vehicle charging company in the US. This was the third acquisition that Car Charging Group made in 2013.
The deal expands the partnerships that the company is making to install charging stations in a number of different environments. Car Charging has a deal with Simon Property Inc. the largest REIT, to set up charging stations in certain locations. The company also has deals with retailers like Walgreen s. The acquisition of 350 Green expands the deals with retailers to include Whole Foods, Sears and Super Valu. The company also has deals with parking garage owners Standard Parking, Central Parking and others. In all of these partnerships, Car Charging Group installs the chargers, owns and maintains and insures the chargers. Shortly after the 350 Green acquisition, Car Charging Group announced a deal with Nissan to deploy 48 Nissan branded quick chargers in California and East Coast locations. I first wrote about Car Charging Group in December of 2012. The stock traded at $1.58 at the time. On Friday, Car Charging Group closed at $1.69. The stock has been flat for the past year but has been ticking up lately. This is still a tiny company. At the end of the first quarter, total assets were only $7.7 million. But the company is growing fast and is ambitious. ECOtality Inc. ECOtality has a couple of different business lines. It sells car chargers for private and public uses under the Blink brand. Ecotality is setting up an electric vehicle charging network across the US. The company also manufactures quick chargers for industrial uses forklift and airport vehicles etc. under the Minit-Charger brand.
Ecotality One Year Chart: Source - Bigcharts.com Ecotality got a big shot in the arm early on through a deal with the US Department of Energy. The DOE provided a grant of $100 million to deploy Blink chargers and gather data about the use of charging stations for the government. It s a research project. The grant enables the government to get the data it needs to understand the future needs of the electric car business. ECOtality, which had already been established in the industrial charging market, got the financing to launch the electric vehicle charging network. Like Car Charging Group, ECOtality is making deals with retailers around the US to deploy charging stations in store parking lots. The company has a deal with Kroger whereby Kroger will pay $1.5 million for ECOtality to install and deploy 200 level 2 chargers and 25 DC fast chargers in Kroger parking lots. ECOTality is also teaming with IKEA. In June, IKEA announced it will expand the number of Blink charging staions at its facilities. By the end of 2013, ECOtality will have installed 55 charging stations in the parking lots of 19 IKEA stores across the US.
These are just a couple of examples of the deals that ECOtality is making in the effort to build out its network. The company is growing quickly. Revenues in the first quarter were almost $16 million - an increase of 43% from the same period last year excluding the non-recurring items. In June, Ecotaity sold over 5 million shares at $1.60 per share in a private placement. The company raised $8.2 million which it will use to build out the network. Along with the stock, investors were given ½ warrants to purchase more stock at $2 a share. The current stock price is a big move up from 50 cents a share - the price the stock was trading at in December of 2012 when I first wrote about the company. The stock has backed off a bit since the private placement. But it continues to be an active trader. Setting up a charging network is a high risk business small revenues to start with, lots of expenses to build the network, and it s basically a commodity business. Anyone can compete with these companies utilities, retail chains, municipalities, they can all set up charging networks. The race is on. And I will be using the chargers.