Interview with Joerg Lohr, Senior Manager E-Mobility, RWE Effizienz GmbH, Germany
Can you give some background about RWE’s experience in the e-mobility business, in particular electric vehicles?
RWE started the EV business in the early 1970s, and the company even intended to produce electric vehicles. That way of thinking was ahead of its time and at that stage, the demand and necessity for alternative mobility concepts were not strong enough. In 2008, the Corporate Strategy Department evaluated e-mobility as one of the future markets for utilities worldwide, and in 2009, RWE Effizienz, a 100% subsidiary of the RWE Group, was founded to create new business opportunities in energy efficiency. The E-Mobility Department is one of them. Now, there are 60 employees working in infrastructure, IT, sales and business modelling to develop and sell future proof, innovative EVs worldwide.
Do you have any success stories you can share with us yet?
Yes, of course! Actually, we operate more than 1,350 publicly accessible charging spots in Europe, each of them connected to our EV management system, and another 80 in the U.S.A. and China are to be installed. With this number, we are one of the biggest operators of intelligent infrastructure for electric vehicles in the world, and unique within Europe. Two lighthouse projects are the Berlin project and in Amsterdam. In Berlin, we have operated more than 180 charging points for two and a half years already and our cooperation partner Daimler runs 100 electric vehicles. Vattenfall and BMW are the other part of this project. Together with them, we are demonstrating roaming and billing processes as well as interoperability of several hardware providers. Amsterdam is the first commercial EV project in Europe, and we are one of two EVSE providers. We consult the City of Amsterdam, support our Dutch subsidiary Essent, and deployed and operate more than 250 charging points on behalf of the City of Amsterdam. These two projects are not an idea anymore. Both are up and running.
What are the basics of your business model and strategy?
As a subsidiary of a utility company, the provision of electricity and the relationship with the customer are parts of the business model. But as an infrastructure operator, we have a much bigger scope. We developed the infrastructure, both for residential and public purposes, on our own; we are the owner of the patents and licenses. Selling this infrastructure on all continents actually is the biggest part of our business. We provide technology in AC and DC charging, and we also provide the operation of this intelligent technology with our unique infrastructure control system.
Utilities or smaller municipalities decide to let a third party operate the EVSE, as it is more cost efficient. We also provide this service either directly or through our sales network all around the world. I do not want to tell too much about our strategy, but in our opinion, EVs are just a part of a complex, innovative grid solution with decentralized generation and intelligent consumption points. As part of a utility, we can look back on our extensive experience in grid management and generation. RWE is one of the biggest investors in renewables in Europe. So if you ask about strategy, we want to provide knowledge, products and services to make smart grids happen.
How important are partnerships in developing the business model?
Partnerships are the backbone of our business model. There are a lot of innovative providers of EVSE, and a lot of really smart concepts. But the e-mobility market is still a startup market, as we have to set standards, create business opportunities and, most importantly, create legal frameworks that allow revenue and business cases for all stakeholders. At such an early stage, it is always better to cooperate than to compete. We are cooperating with all major OEMs to understand their strategy and to provide future-proof solutions for electric vehicles.
We also run a global partnership network with major utilities to avoid inefficient communication and additional costs in finding the right solution for the integration of EVSE in the utility business. Regarding our own business, partnerships are essential. It is not just about deploying infrastructure. There are real customers who require perfect after sales service and IT services, which are provided by our global sales and maintenance network.
What are you most proud of so far?
Together with Daimler, we have created a protocol of communication between the vehicle and the EVSE to provide smart charging and the extension of communication in the vehicle. Governments and experts all around the world are talking about smart grid. The electric vehicle will not just become another consumption point, but will play a significant role as storage facility of energy generated by renewables. In this case, EVSE has to be intelligent and allow bi-directional data and electricity flow throughout the infrastructure into the vehicle. That given, we defined this system and we enable EVs to be integrated in an intelligent grid infrastructure. And as mentioned, we operate the biggest network of intelligent charging stations in Europe. I think we can be a little proud of this fact.
What surprises you about this industry?
The speed of the developments and the variety of solutions in this industry is amazing. It is surprising that since about one year, we do not just talk about single vehicle concepts. The OEMs electrify their whole fleet. This is a fact most of the experts never would have believed two years ago.
What is your vision for this industry?
I think that we will have a very strong consolidation on the EVSE part of the industry. A lot of smaller companies with innovative concepts will be merged or become part of joint cooperations. Hardware will become a mass product, but the management of smart technology as part of intelligent grids will become the core of the value creation.
On the OEM side, I expect a change in the supply chain. We will see more “insourcing” as the EV has another center of value creation. It is not the engine any more, but all about the battery. In future, an OEM will differentiate by the performance, range and costs of the battery. This is a completely new business, and an OEM will not give away this responsibility and value chain.
Generally I expect that there will be three key players in this new market, for several reasons. Firstly the OEM, as individual mobility always will remain one of the basic demands of human beings. Secondly, the authorities, as we are talking about a part of the basic resources like electricity and public infrastructure. And the third key player will be the utilities, as they will be responsible to make the strategy and energy policy of governments happen.
Joerg Lohr will be a speaker at Smart Utilities Australia and New Zealand on “German utilities as key players in the e-mobility business - Business model and strategy”.