Full Throttle or Emergency Brake? The E-Mobility Decision of Municipal Energy Providers
Regional energy suppliers have already shown their presence in the electric mobility market at an early stage. This was done not least to be able to compensate early for the expected declines in the classic energy supply business in the wake of the energy transition. The infrastructure available locally from the individual energy suppliers and their own technological know-how strengthened this role. Both factors also offer diverse opportunities for the future, as the 2024 Municipal Utilities Study by the management and technology consulting firm BearingPoint shows.
Lack of profitability as the biggest hurdle
The e-mobility market could – as current projections show – reach global corporate profit potential of $80 billion by 2035. Three relevant sub-areas fall under this: data & connectivity, new mobility offers, and the charging infrastructure sector. However, when considering recent developments, market consolidation must first be assumed in Germany. 60% of the energy suppliers surveyed criticize the current low profitability of their e-mobility offers. Additionally, the results of the Municipal Utilities Study also show a currently restrained interest among customers with a simultaneously dynamic development of the charging market. As a consequence, at least in the near future, slowed growth is to be expected, as the authors of the study were able to ascertain through quantitative surveys and expert interviews.
Increasing efficiency and reducing costs
From the perspective of energy suppliers, their involvement in the area of e-mobility is no longer solely about image-building within the current climate protection and sustainability discourse. Rather, efforts to establish viable business models now dominate strategic considerations. Besides specializing in selected business models – especially e-charging offers – and moving away from their own, no longer competitive offers in the shared mobility market from the early development phase, the keywords are increasing efficiency and reducing costs.
Bidirectional charging is coming
The 2024 Municipal Utilities Study also shows that waiting for the predicted success of e-mobility is not an option for municipal energy suppliers – after all, 90% of the companies surveyed hope for additional revenues. Although today only around 10% of customers own an electric vehicle, in the future 43% are interested in purchasing an electric vehicle for their own garage.
Against this backdrop, technological trends must already be anticipated and concepts initiated. These include bidirectional charging and e-mobility for light and heavy commercial vehicles and buses (depot charging), as well as the management of charging stations and fleets, and flexible charging tariffs for Charging@Home, which must be incorporated into their own portfolio. Only if market-ready and competitive offers are available in a timely manner can a successful long-term positioning against large energy suppliers be achieved.
According to the study results, the latter are perceived as the biggest competitors by municipal utilities and other local providers (74%). They are followed by providers focused on e-mobility solutions with 66% as perceived competitors and, at 14% each, transport companies and tech companies in the field of e-mobility products and services.
Customer Proximity and Trust
The original commitments of municipal energy providers in the electromobility market are currently being criticized mainly for their lack of profitability (60% of the companies surveyed). The most interesting customer groups for public utilities and regional energy providers are those groups that positively evaluate the spatial proximity of their provider. As the study data show, public utilities and regional energy providers can offer corresponding customer-specific solutions. They particularly benefit from their localized expertise, both in the provision of charging infrastructure (CPO) and in services related to electromobility (eMSP). The task will gain further relevance in the coming years, among other reasons, because to achieve the target set by the federal government, around 900,000 public charging stations will need to be newly built by the year 2030.
Marion Schulte, Global Head of Utilities, Postal and Transportation at BearingPoint: "Even today, it should be mainly about securing the most attractive locations for charging points in cities and municipalities for public utilities and regional energy providers. With regard to the overall strategic direction, offers for e-mobility must now and in the future be operated either highly professionally or the company withdraws completely from the market. Those who stay need to be in for the long haul. Persistence could pay off in the end. We see the currently declining registration numbers for electric vehicles as a temporary trend. On the provider side, current figures show that investments in charging infrastructure have amortized after eight to ten years."
Improvement of Operational Processes
In addition to the time component, important levers on the provider side concern the improvement of existing operational processes. According to the study, innovation activities divided into various responsibilities at the energy provider should be aligned with and centrally managed by a company-wide innovation strategy, if such a uniform strategy already exists. The topics of digitization and automation also need to be addressed. For the latter point, this includes, for example, the consistent use of AI, robotic process automation, or workflow management systems. But public utilities can also score points in the future with their classical virtues, as the study authors emphasize.
"Regionality is the strength of public utilities. They know their own sales and network area and thus the target market for e-mobility products. They are perceived by the local population as reliable providers of innovative services. In the future, this trust should be leveraged in the development of specialized offers. Public utilities will also need these if they want to assert themselves against financially strong, large energy companies in the long term. Those providers who bring the necessary endurance will benefit in the long run from the ramp-up of electromobility," concludes Marion Schulte.
About the Study
For the Public Utilities Study 2024, 37 companies in the energy sector (38% at energy supply companies, 62% at public utilities) and 1,011 private end customers were surveyed. These were part of the survey to compare their individual expectations with the provided offer. Expert interviews with decision-makers on the energy provider side were conducted to analyze future-proof growth markets for public utilities. A concluding BearingPoint expert workshop analyzed the results of the survey.
You can find the study and the infographic "The Future of Energy Providers in the E-Mobility Market" in our attachment.
Translated automatically from German.Elektromobilität , Newsletter Elektromobilität , IAA Mobility , SUVs und Geländewagen , Hybrid , Antriebsarten, Kraftstoffe und Emissionen , Oberklasse- und Sportwagen , Carsharing , Autonomes Fahren (Straßenverkehr) , Ladeinfrastruktur , Verkehrspolitik , Formel E , Brennstoffzellen , Fahrzeug-Vernetzung und -Kommunikation , Fahrzeuge & Fuhrpark , Automotive-Messen & Veranstaltungen , Pkw, Kompakt- und Mittelklasse , Minis und Kleinwagen , E-Auto-Datenbank, E-Mobilität-/Automotive-Newsletter, E-Auto-Tests