By Paul Brandus
If you’re a Starbucks customer, chances are you’re looking to grab your jolt of caffeine and be on your way. That’s just fine with the coffee giant, which gets about 75% of its business from drive-throughs, mobile orders and delivery apps. We’re talking quick, seamless transactions.
Customers who spend money but don’t hang around are valuable in another way: It allows the company to reduce its retail footprint.
But now, and counter to this highly successful model, Starbucks /zigman2/quotes/207508890/composite SBUX -0.01% wants you to come in and stay awhile. Or at least for as long as it takes for you to charge your electric car. In an experiment, it’s teaming up with Volvo and ChargePoint /zigman2/quotes/214140886/composite CHPT -0.37% , a California-based operator of independently owned EV charging stations, to install what are called DC fast chargers (“DCFCs or “Level 3 chargers”) along a 1,350-mile route from Denver to Seattle. More on those in a minute.
The plan is to install charging stations every hundred miles or so. Chargers would be needed because the route meanders through some pretty remote areas, where an electric-vehicle driver could easily get what’s known as “range anxiety,” or the fear of running out of juice.
In Starbucks lingo, this is a “tall” (i.e. “small”) test, because it’ll only involve about a dozen stores. But it reflects a broader issue, not just for them but for brick-and-mortar retailers in general: How might the presence of chargers at malls, shopping centers and whatnot influence the way consumers shop and spend money?
In the retail world, engagement time is an important factor. “How much customers buy is a direct result of how long they spend in a store,” says a report by Retail Sensing, a consulting firm. “The longer the average shopping time, the more a store sells,” it adds. Seems obvious.
This seems counterintuitive for Starbucks, fast-food joints and other establishments whose business models rely on fast transactions and rapid customer turnover. But charging up while you’re in the grocery store ( average visit: 41 minutes ) or getting a haircut ( 35 minutes) might make more sense.
But not so fast. This depends in turn on the kind of charger. The problem — and I’ve pointed this out before — is that chargers in public spaces are often so-called “Level 2” chargers (L2s). L2s are 240-volt devices that typically give an EV about 18 to 28 miles worth of range per hour. So if you plug in and spend a typical 41 minutes grocery shopping, you might get 12 to 18 miles of range. That’s like going to a gas station and buying a gallon at a time. Whoop-de-doo.
“Level 2 public charging is fine if you’re at a destination, working a full day, or sleeping overnight,” Steven Loveday of InsideEVs.com said. “It’s not helpful if you’re just sticking around for a bit. If companies, local areas, and the federal government really want to help, they need to focus almost entirely on DC fast chargers, which are exceedingly more expensive to install and deploy than Level 2 charging equipment.”
DC fast chargers (also known as Level 3s), the ones Starbucks is installing for its test, are where it’s at. They can charge an EV 16 to 32 times faster than Level 2s. A mid-range DC fast charger can recharge the average EV on the road today to 80% in about 30 minutes. That dovetails nicely with you running your errands.
But the cost — that’s the rub. A fast charger can cost anywhere from $28,000 to $140,000 each to install (the wide variance reflects kilowatt capacity); for mass adoption, these prices will have to come down.
This helps explain why L2s are what you’ll typically find in public. And when you hear President Biden tout the 500,000 new chargers that will be paid for by the new infrastructure bill, a simple math exercise implies the same. The bill he signed last fall includes $7.5 billion for 500,000 chargers, which works out to $15,000 per unit — far less than what fast chargers currently cost.
How many and what kind of chargers could be coming to your state? Scroll down to the map here for the possibilities. It assumes fast chargers will cost $100,000 each, which, again, means most public plug-in spots will be the slower Level 2s.
Keep in mind that the vast majority of EV owners charge up at home overnight, or while they’re at work, meaning that slower, Level 2 chargers are sufficient, though time-consuming. In public places however, more innovation and competition is needed to either make Level 2 chargers faster or Level 3 chargers cheaper. We’re still a ways off but eventually it will happen. And when it does, both you and your car will be able to get your morning jolt in a hurry.