Over the next five years the European mobility market – as well as the electricity market – will undergo a transformation, says Sytse Zuidema, CEO of NewMotion, Europe’s largest EV charging company, acquired last year by Shell. The Amsterdam-based company is already developing products that anticipate on the coming digitalization of the energy value chain, such as a highly advanced vehicle-to-grid (V2G) charger and apps that tell people at the office when their battery has been charged so they can make room for colleagues. “Charging at home and at the office will become the norm”, says Zuidema. “We won’t need fast chargers very often.”
When I talk to Sytse Zuidema in a cafe in his hometown The Hague, not far from Shell headquarters, he recounts that when Shell bought NewMotion last year, the adventure into electric mobility services came full circle for the founders of the company. In 2009 founder Ritsaart van Montfrans, with a few partners, started developing services and software around electric mobility, which was largely unknown territory back then. “They didn’t even have a charger yet”, says Zuidema. “In 2011, when the Nissan Leaf came on the market, they bought five of them, so they could experiment.”
Ironically, in the same year, Shell announced it would stop investing in alternative energy, except for biofuels. As the Guardian reported on 17 March 2009: “Shell will no longer invest in renewable technologies such as wind, solar and hydro power because they are not economic, the Anglo-Dutch oil company said today.”
“It is not always clear for drivers how much they have to pay when they charge their car. Anybody can set up a ‘pump’ and offer charging services”
Just seven years later, the oil company had to admit it made a mistake. On 15 May 2016, the Guardian revealed that “Shell, Europe’s largest oil company, has established a separate division, New Energies, to invest in renewable and low-carbon power.”
In October 2017, Shell moved into the market for electric mobility –competing directly with its own traditional fossil fuel business – when it announced it had acquired NewMotion. For CEO Zuidema, an engineer with an entrepreneurial spirit (he was an early adopter of solar panels and built a 1 MW solar-PV farm in Sardinia with a friend), Shell’s involvement is a milestone for the EV market. “They are anticipating on the fundamental changes taking place in the mobility and electricity markets. We are moving to a world of connected energy, based on the rapid digitalization of the entire energy value chain.”
Getting in lane
Zuidema is the first to acknowledge that the EV market is still far from mature. “The market is still quite small. There are many EV suppliers but very few models. There is no second-hand market yet. However, in about five years, all this will have changed. There will be many more models, and pricing will be quite different. We’re anticipating on these developments.”
NewMotion is not profitable yet. “It is the same as with companies like Tesla,”, says Zuidema “it takes quite an investment and effort to grow and become a preferred supplier for customers.”
“We actually won’t need fast chargers that often”
Currently, the markets for electric driving in Europe are still very fragmented. Zuidema: “There are several differences between the various national markets. The incentives to ‘go electric’ vary, as well as legislation and regulation. In the Netherlands for example, you have a lease market driven by tax incentives. In Norway secondary benefits, like free parking and the use of bus lanes, are important. In the UK people get an allowance to compensate for driving costs. There EVs are primarily chosen for reasons of sustainability. In Germany and France there are other drivers.”
All of these markets are developing in different ways, says Zuidema. This means there is still work to do on standardization. And there is also a lack of transparency. In pricing, for example. “It is not always clear for drivers how much they have to pay when they charge their car. Anybody can set up a ‘pump’ and offer charging services. They can change rates at any given moment, without customers realizing it. I know this has happened. As an industry, we are now trying to find consensus on regulation, on a European level.”
Zuidema is convinced that changes in people’s behavior will be more far-reaching than many people are currently expecting and he also believes that businesses will come up with countless new value propositions that are unthinkable today.
For one, he does not believe that fast chargers are the future. “Working people in Europe commute 40 kilometers a day on average. A 5 kWh charger delivers that power in one hour. Cars are usually parked for many hours at the office and many hours at home. So we actually won’t need fast chargers that often. Charging at home and at the office will become the norm.”
“We have told this to Shell”, he adds. “Oil companies now make a lot of money on retail sales at their forecourts. But EV drivers will not go there anymore. Therefore, oil companies should broaden their spectrum and not just look at public charging as an equivalent to fuel stations, but also at possibilities to charge at home and at office locations.”
“You’ll see lots of new solutions which – in time – will make extensive expansion of the grid unnecessary”
Home and office charging has its own challenges, such as queueing in front of EV chargers. “We need to convince drivers that they have to make way for someone else when they have charged their car. We have already developed an app for that, which can be used by companies. A user gets a notification when his car has been charged, so he or she can go out to move it.”
For public charge points you need different solutions, says Zuidema. Financial incentives for example. “Local authorities want all drivers to pay the same rate, but that may not be such a good idea. Make the ‘sticky guys’ pay more and they can finance the next charging station.”
The standard NewMotion app shows all the public EV charging stations that are available in the vicinity of the user. If you happen to be in Amsterdam, be prepared for a pleasant surprise: the app shows there are usually dozens of charging stations available wherever you are in the city.
One of the next steps in terms of technological development will be the linking of EV charging to home batteries and smart grids. NewMotion is involved in several pilots in this area. For Dutch transmission system operator (TSO) Tennet it delivers frequency response services. “20% of our chargers are equipped with this kind of technology. We can change the frequency to help Tennet balance the grid, without bothering the users.”
Whereas frequency response is a one-directional service, which is only useful for the grid operator, NewMotion is also involved in two vehicle-to-grid (V2G) pilots, which work in two directions. The first is a project with Dutch distribution system operator (DSO) Alliander, technology company Enervalis and innovation platform Amsterdam Smart City, in which public and private charge points are used both to charge and to provide electricity to the grid. For Alliander, the pilot is a way of testing the impact of V2G on a low-voltage network. They also want to see if V2G can be used as back-up in the event of power failures.
“Local authorities want all drivers to pay the same rate, but that may not be such a good idea”
The second is a project with Mitsubishi, Tennet and Enel, in which the batteries of Mitsubishi Outlanders are connected to the grid with chargers from Enel. Zuidema says the Enel chargers, which use a lot of power, will soon be replaced by chargers NewMotion has developed in-house, which he says will be among the most advanced in the world.
Zuidema admits V2G is still a bit of a hype. “But I am convinced it does have great potential. Owners of EVs can make money this way. You are talking about a few hundred euros per year, which can be a lot of money for aggregators or utilities that can tap into this market.”
For NewMotion itself, Zuidema also sees many new opportunities. “If we can make use of excess production of wind farms, for example, we can deliver electricity for free.”
Zuidema is convinced that cost-effective solutions can be found for the intermittency and balancing problems that are an inevitable part of the rapid growth of the use of EVs. “You’ll see lots of new solutions which – in time – will make extensive expansion of the grid unnecessary.”
Zuidema also sees quite a few synergies with solar PV and home storage systems, such as the ones from German supplier Sonnen, in which Shell has also invested. “People will start to think very differently about energy production and use once they have become energy producers themselves. It’s going to take some time, but it will happen.”
Innovation is also happening in the field of finance, says Zuidema. “We do a lot of business-to-business-to-consumer, for example, through car leasing companies. We have entered a partnership with Arval in Norway. They have a million cars throughout Europe of which 200,000 per year are replaced. 5% of this will be EVs.”
Isn’t the CEO afraid that the market will eventually be taken over by a host of companies and even individuals that will offer cheap charging services on every corner? “What we do is not as easy as it seems”, Zuidema says. “We build a little fuel station at home or at the office with services around it. That requires quite a lot of knowledge and experience. We also offer cards that people can use to charge all over Europe. We have 40,000 NewMotion charging stations, a public network of over 75,000 public charge points in 25 countries, and have issued over 136,000 charging cards. We unburden our customer from A to Z. You really need experience and expertise to do this.”
So where does he see the company in 10 years? “We will still be Europe’s largest electric charging partner and will meet essential needs for 25% of all EV drivers.”