EVs and P3s: Not such a perfect fit?

Experts at the P3 Hub in New York discussed the role of P3 in the delivery of electric vehicle (EV) charging infrastructure

Credit: Getty

“Departments of transportation didn’t put in gas stations, so this is a completely new area to all of them. As a result, they need good advice and plenty of support.”

That was the view of one participant in a boardroom discussion involving public and private sector representatives, and led by HNTB’s corporate president Jim Ray. 

However, many in the room expressed the view that such “good advice” may not inevitably mean a push towards P3s. Some argued that the P3 model may not be most appropriate for the delivery of new EV infrastructure, despite the federal government’s focus on the concept as part of its National Electric Vehicle Infrastructure (NEVI) Program. With all states having now submitted their plans under the NEVI initiative, a stream of projects is likely to be forthcoming - but the experts in the room argued that P3 may not be the model that most want to use.

“DOTs are not there to solve the whole problem, but to be a catalyst,” explained one participant.

For many, there appeared to be a view that the best thing state DOTs can do is to provide the enabling environment for charging infrastructure - such as by identifying locations - but then stepping back to have no involvement in the operation and maintenance of the chargers themselves.

The concern is that DOTs do not have the experience or expertise to be involved in the management of this type of infrastructure - and have no appetite to take on things like the risk of owning obsolete facilities at the end of a concession. As a result, many are expected to fulfil their requirements under the NEVI, but look to stay out of the sector as much as possible after that.

And as one expert in the room pointed out, there may well be plenty of opportunities for DOTs and other public organizations to foster the desired growth in charging infrastructure without having to use the P3 model. “There are a plethora of private models out there that are not P3,” they said. 

All agreed that it is a huge risk for the public sector to have a stake in some of these sorts of EV charging projects, and therefore it “should be a private sector endeavor”.

A number of states have begun the process to find out what sort of model might work best by issuing requests for information. Those in the room agreed that this approach could act as an important way to develop ideas and take the thinking forward on what models might work for DOTs.

The discussion clearly highlighted that there are two different forms of EV charging infrastructure being demanded of authorities. At a state DOT level, it is for the delivery of corridor charging, so that particular routes, covering long distances, are serviced by charging infrastructure.

For most in the room, this need for corridor infrastructure is considered to be more of a real estate play than a P3 approach. They pointed out that there are significant opportunities for the private sector to take advantage of this by developing retail and leisure provisions as drivers are required to wait for 20 minutes or more while their vehicle charges up.

However, there were concerns that simply sitting back and allowing the private sector to work might not solve all the problems. They pointed to the current situation in the broadband sector, where getting access to rural parts of the country remains a major challenge due to the low returns on investment that such developments offer. Some authorities have looked to P3s to solve this challenge, while others have chosen other models to drive access.

Part of the dichotomy for the public sector, then, is that it has some important public policy requirements attached to the rollout of EVs, and to create a sustainable market for EVs that will see them replace gas-powered vehicles in the coming years. To do that requires a push to crowd in the private sector, meaning the market cannot simply be allowed to grow organically in the way that the gas industry did a century ago.

The P3 opportunity

While P3 may not be considered the right model for corridor projects, experts in the room made an important distinction between these schemes and major fleet projects within more local settings.

An urban transit authority, for example, is faced with an imperative to replace its gas-powered fleet so that it can meet the Net Zero carbon targets that it has been set. “The biggest problem is not buying the buses, it’s putting in the infrastructure,” explained one expert in the room.

Key for such authorities will be the reliability of these vehicles. Having some control over the continued maintenance and ability to replace and upgrade both the fleet and the infrastructure as they degrade over time will be critical to ensuring continuity of service to passengers - whether that be members of the public or school children.

“Reliability is a huge issue,” admitted one participant. “A vehicle may be advertised as having 300 miles of charge, but what about when you add in the energy used for heating or cooling it? Plus there is the question of battery degradation over time.”

As a result, these agencies are keen to maintain some control over the facilities they are providing - especially as in most cases the charging infrastructure will be based at central hubs across a city or region, and are therefore often on publicly-owned land. In this situation, a P3 to effectively renovate an existing depot to provide the energy facilities for EV charging (and potentially hydrogen fuel facilities), makes a lot more sense.

Clearly, then, P3 can play an important role in the delivery of EV charging infrastructure across the US - but it may not be in the way that the federal government had imagined when establishing the NEVI program to support states making the Net Zero transition.