Despite the fact that we're just seeing electric cars roll on the road, Richard Lowenthal, CEO of Coulomb Technologies tells us selling charging stations for electric cars will be a profitable business in a year and a half.
Coulomb sells charging stations for electric cars to businesses and cities. It makes its money selling charging stations for between $2,000 and $4,000. It then charges drivers around $720 annually to use the stations. Of that, Coulomb keeps $120 to cover its maintenance costs, and the city or business keeps the rest. This way a city pays off the cost of the station it bought, and usually profits, and Coulomb can pay for round the clock data centers that watch over the charging stations.
Coulomb raised $3.75 million in January from Estag Capital and Lowenthal says the company is looking to raise more. He anticipates $2 million in revenue for 2009, and profitability coming by 2010, when Coulomb should be selling 520 charging stations a month around the world. And that's before electric cars really start rolling around. When that happens, Lowenthal thinks the company is positioned to take advantage.
Why start a company for charging stations, when there aren't many electric cars out there?
We came into existence because every automaker is planning on a electric car. They're coming in the next 1-3 years, yet look at Chevy Volt, the prototypical electric. The idea is that you plug it in the garage at night. The first 40 miles is all electric, then the rest is gas. The average American goes 29 miles, so that's great as it gets us off fuels, but there's 247 million cars, but only 50 million garages. There was a plug in hybrid study at UC Davis, and it found people want to charge twice a day. When they're sleeping and when they're working.
We build charging stations for people that live in apartments and condos, also. In San Francisco, the primary model is replacement of a parking meter. You put in our product, so the people in San Francisco who park curbside have a place to charge their car. In San Jose, it's different, they asked us to develop product that mounts on light poles, and we have a few different locations for those.
Obama says we'll have 1 million electric cars by 2015, we think that's light, but you'll need at least 2 charging stations for every vehicle. So, if he's right then 2 million stations in the US alone.
How much does it cost to install?
It costs $3,000 for a station on average, it varies from $2,000 to $4,000. Somebody like San Jose or San Francisco or Cisco or Google will buy stations. We sell them for between $2,000 and $4,000, that's how we make our money. Then we have a subscription service to pay for charging minutes. Users go on our website, put in their credit card, we send them a key fop, which they use to activate the charging station to charge their car. We pick up money from driver, but we don't make any money from charging for the minutes, 80% of that money goes back to operators, like the cities who own the stations and the property. They usually profit from it.
So far we have 15 customers--cities, businesses. We installed our first network in December in San Jose. We have over a hundred drivers signed up. They use our system for free for 2009. It's a teaser year for people to charge their cars. We are learning a lot, figuring out how to charge people best. Our plan is to have people pay for $720 for the year to charge their cars. Of that we keep $120, and the rest goes to the operators.
What's the difference between your operation and Better Place, who also want to set up charging infrastructure?
Better Place owns the battery and has a custom car, and searches for clean energy to charge the whole thing. We just make best networked charging station. I have no interest in owning batteries, we are equipment provider. The other thing, we have the only networked station, so you can go onto a Google map and find every station and see what's free and what's broken, what's being used. Our operating center monitors the stations 24 hours a day. We have features that help people if they forget to plug the car in, we send alerts. All our stations are integrated with the smart grid.
Why aren't your stations near gas stations?
The cars that come out all take between 4 and 8 hours to charge. Since cars are parked 8 hours a day it shouldn't matter, the model is not go to station and charge up, when working, you want to be parked at a charging station. So a place like Google has charging stations for employees. So far there are no standards for quick charging, it's still experimental. But when it become standard, popular, we'll be ready. And we can sell our infrastructure to gas stations.
If I charge my car overnight, how do I know some prankster won't just yank the plug?
Well, there are two kinds of plugs. Standard for high powered where cable is permanatly attached, the cord comes with the car. When I pull up to the station, I plug in and it locks it so you can't get it out without the key fop. Still with the Prius, they can unplug from the bumper. Then we alert the driver and the operator of the station, that's something we can do because of networking.
So you have people constantly working?
We have a 24-7 data center, most of it is automated. If a non-subscriber still wants to get a charge thats when the data center gets called. We have 14 people in our head quarters, our sales force are all independent distrobutors, covering 46 states and we have installers in all those states. In the other 4 states cover with direct staff in valley, We have European distribution, the way we sell our product is dist.
We have distributors, but we don't pay them, they get paid on the margin. We sell them the stations at a slight discount, then they sell them to municipalities or businesses. They sell installation and maintenance, we probably have 100 people working for us but we only pay 14.
What does the low price of gas do to your business?
The motivation for buying electrics shifts. Two years ago it was avoiding carbon dioxide, last summer it was the high price of gas, and now because of Obama it's to avoid importation of oil. While the motivation has changed, remember it costs you 2 cents a mile on electric, versus 12-13 cents on gas, and we're less than half the price of gasoline. With us it's just about 5 cents a mile.
How does the recession hurt your business?
So far it's been 100% positive. There's a 50% tax credit for our electric charging stations, which puts our stations on a big sale. It made everyone hurry up to purchase them. There's also a big rebate on electric cars. The stimulus bill that was passed as a result of the recession gives funds to cities who can buy our stations at a discount. It's all been extremely positive for us, so we like the recession because its been a help. We don't like to say that, because the recession hurt so many people, but it's helped us.
How does the stimulus help you?
There's a tax credit for infrastructure, for buying charging stations. There's a 50% tax credit for municipalities purchasing electric car infrastructure.
When do you think you'll be profitable?
We are on target to be profitable in October of 2010. To do that, we need to sell 520 stations a month. We're on plan to do that, we made our first quarter plan. And that happens without any real cars out there. That just starts in the fourth quarter of 2010, that cars will be out there. We're going to do about 2 million in revenue this year, next year, I don't want to talk about, because we're out there raising money, but this year we're on track for $2 million in revenue. We make our money selling stations.
What happens if nobody uses the stations? How does that hurt your business?
It's an addressed concern. We don't like to get ahead of the electric cars, we don't want empty stations. We just had a significant announcement in Chicago, where we had a solar powered charging station installed for the municipality. Just one sends a signal that Chicago wants electric cars, it shows a model. It establishes a model for a few stations for the city. Obviously, we don't want empty stations. That will cause a backlash. But right now, they're policy statements by municipalities, that show a city is dedicated to electric cars.