EV drivers – from smug to bah humbug

While there is an increasing number of electric vehicles on roads, the number of public chargers remains static. In fact, Google search growth for “EV charging” is 1.5 times higher than for “EVs”. In this wire, Pengana's Ted Franks outlines some of the bottlenecks, as well as how you can invest in the future of charging. 
Ted Franks

Pengana Capital Group

I’m at an age where my summer weekends are packed with weddings all over the country. This year, travelling to these social events was somewhat complicated by being new owners of a battery electric vehicle (EV). We’re thrilled with the car, but the charging experience, particularly outside cities, leaves a lot to be desired. So much so, that on the way home from one of these weddings, we stopped at a service station on the M4 and witnessed a rather aggressive scuffle between fellow EV drivers.

Rapid EV sales and charging bottlenecks

It’s astonishing to see the increasing number of EVs on the roads, particularly in London. However, the number of public chargers remains static. Google search growth for “EV charging” is 1.5x higher than for “EVs”.

There are 27,835 public chargers in the UK, although 1 in 10 rapid chargers don’t work at any given time and an estimated 480,000 more public chargers are needed by 2030.

But it’s not just the number of chargers and consequent queues, it’s also their reliability. For the uninitiated, let me explain some of the issues:

  • the need to register for countless different apps as each EV charging brand operates their own;
  • no queuing systems (digital or physical);
  • not knowing when the car on charge will finish and how long you have to wait;
  • faulty chargers which the support call operators often can’t fix remotely;
  • limited numbers of fast chargers; and,
  • no warning or instructions to new EV drivers that when there are multiple cables on a unit, simultaneous charging will hugely reduce the charging speed. This frequent and often innocent mistake was the cause of the aforementioned scuffle.

EV drivers are starting to suffer less from ‘range anxiety’ and more from ‘queue anxiety’ – a worsening reality of early EV adoption which dispels the myth that the Brits love a queue.

Capital is flowing into the buildout of the charging network, but if it doesn’t pick up the pace, then I fear the smugness EV drivers felt during the recent fuel crisis will be a distant memory. 

Instead, new EV owners will realise they may have swapped the devil they know, for one with more apps, complexity, and queues.

Investing in the future of charging

Several EV charging companies have come to market during the recent SPAC boom, such as Chargepoint and EVGo. While there is no doubt that the services they provide are crucial to the EV transition, we are concerned that these companies have come to market too early and remain highly speculative investments. Both companies have only just started to generate sales, and neither is expected to turn a profit for several years.

Sustainable Transport is one of WHEB’s investment themes and many of our holdings are in companies enabling the transition to EVs. We prefer to focus on higher-quality companies with a proven product and market position, such as Infineon and Aptiv.

Infineon, the market leader in power semiconductors, provides a wide range of electronic components to support fast EV charging in as little as 7 minutes. This could get even faster – the company believes a new material called Silicon Carbide (SiC) could increase the power output of its EV chargers by 30%. Infineon is even investing in wireless charging solutions that would allow the car to draw power from a panel on the floor of a parking space – no more fighting over cables. The company is also helping to power the cars themselves: this year around half of all EVs produced use power semiconductors from Infineon.

Aptiv, an auto parts supplier with leading positions in autonomous driving and advanced safety, tells a similar story. About half of all EVs produced between 2020 and 2022 will use Aptiv’s high voltage products, such as power distribution boxes and high voltage cables. Due to its strong market position and increasing demand, management thinks sales of their high voltage components could grow at a whopping >30% per year on average between now and 2025.

Behaviour change

EV drivers’ frustration with charging was echoed by Sky News correspondent Thomas Moore who documented his experience of driving an EV from Westminster to Glasgow for COP 26. Philippa Oldham, Director, and Engineer at the Advanced Propulsion Centre UK joined him for part of the journey.

In my mind, she hit the nail on the head when she highlighted the need for behaviour change. Whilst we wait for battery charging technology to catch up with the convenience of refuelling an ICE vehicle in minutes, we could try and embrace the longer stops on our journeys. If we’re to achieve the mammoth task of achieving net-zero, then it’s unrealistic to expect a seamless transition from hydrocarbons to clean energy without significant lifestyle changes.

However, as the festive season approaches and we start planning visits to see family across the country, I’m sure we’ll encounter a few ‘Bah-Humbug’ EV drivers along the way. Couple that with cold weather reducing the battery range and an impatient toddler in the back, listening to Chris Rea’s ‘Driving home for Christmas’ might not be quite so romantic this year.

To be clear, I have no regrets about buying an EV. The current charging situation is a teething issue rather than a permanent feature of EV driving. Just like my teething toddler, it can be quite painful (for parents as well as the child!) in the short term but there’s no doubt it will improve and ultimately be resolved in the years ahead.

Find out more

WHEB has developed a bespoke methodology to measure the environmental and social impact of their investments. Access the latest Impact Report and calculator here, or watch the funds latest webinar here. 

Pengana Capital Limited (ABN 30 103 800 568, AFSL 226566) is the issuer of units in the Pengana WHEB Sustainable Impact Fund (ARSN 121 915 526). A product disclosure statement for this fund is available and can be obtained from our distribution team. A person should consider the product disclosure statement carefully and consult with their financial adviser before deciding whether to acquire, or to continue to hold, or making any other decision in respect of, the units in the Fund. This report was prepared by Pengana and does not contain any investment recommendation or investment advice. This report has been prepared without taking account of any person’s objectives, financial situation or needs. Therefore, before acting on any information contained within this report a person should consider the appropriateness of the information, having regard to their objectives, financial situation and needs. Neither Pengana nor its related entities, directors or officers guarantees the performance of, or the repayment of capital or income invested in, the Fund.

Ted Franks
Pengana WHEB Sustainable Impact Fund, Fund Manager
Pengana Capital Group

Ted is the Fund Manager for the Pengana WHEB Sustainable Impact Fund and helped to found WHEB Asset Management in 2009.

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