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4 October 2019

McDonalds slow to catch-up with diverse EV charging market

A release that landed on our desk this week tried to push the idea that McDonalds is a leader in EV vehicle charging, becoming Sweden’s leading restaurant chain in providing EV charging. This serves to show the growing variety of competition in the passenger-vehicle fueling market. The fast food chain has been installing EV chargers since 2009 but still only has 55 stations across the country.

This accomplishment is far less significant when compared to Sweden’s rapidly expanding EV charging market.  McDonalds makes up just 1% of total Swedish EV charging stations – in 2018, Sweden has something like 5,518 EV charge points with some of these installed outside people’s homes. Another source says there are 3,600 commercial charging stations in 1,060 locations, so McDonald’s is trying to celebrate a market share of something under 2%. Considering the head start, is should be a lot higher.

Across Sweden there are just 2,970 petrol stations, but remember these all have an average of around 8 pumps, and they each take under 5 minutes to fill a car with petrol, which means the just under 5 million cars in Sweden have plenty of time to fill up. To change over the next decade so that 50% of EVs can be supported, we expect to see charge points rise to around 80,000 individual chargers, so once again, if McDonalds doesn’t accelerate those 55 points won’t make a dent in the future market.

To provide some context, this takes place in a nation which leads in holding the largest market share of EV vehicles on the road in Europe – 5.2% in 2017, with runners up in Belgium, Finland, the Netherlands and Austria all hovering between 2-3%. China has the largest number of EVs by absolute number, roughly 8% of its 250 million cars. For the US there are just over 1 million EVs, out of some 268.8 million total US cars – around 0.3%.

Increasingly, retailers and restaurants are filling the much needed gaps in EV infrastructure, enticing customers with trusted brands and services to fulfil their otherwise idle charging time. McDonalds needs to scale-up faster if it wants to be viewed as a major player in the EV charging market.

Elsewhere in Europe, other retailers and food vendors are beginning to provide EV charging for their customers. Early this year, UK pub chain Mitchell & Butlers reached a deal with BP Chargemaster to install rapid EV charge points at 200 sites.

Earlier this month, service station chain Applegreen launched its first EV charging points at one of its motorway services in Limerick. Chief Executive, Bob Etchingham, recently told analysts he believed EV charging could be a “significant profit center” for the company.

Etchingham continued, saying “an emerging trend that’s literally in the early stages is the adoption of electric vehicles and, in particular, recharging on the strategic road network. We believe our service areas will be net beneficiaries of trend.” The company has over 472 service stations across Ireland, the UK and the USA and last year acquired Welcome Break, introducing new brand partners such as Pizza Express, KFC, and Starbucks.

In the Netherlands too, McDonalds is introducing EV charging at retail sites. In 2018, Dutch company Nuon, a subsidiary of Sweden’s Vattenfall, announced that it would install fast charging stations, consisting of two fast-charging points, at every McDonalds location with a drive-through, 168 in total. Bas Klaassen, Director Development Real Estate & Construction at McDonald’s said he was happy “to offer those of our customers driving electric vehicles the convenience of a fast-charging point with good facilities on the road.”

Nuon’s Director of eMobility in the Netherlands, Pieter van Ommeren, said, “Nuon and Vattenfall want to make fossil-free living possible, at home, at work and on the road. The fact that we can now combine our expertise with the scale of McDonald’s gives the development of electric transport in the Netherlands a huge boost. Because to enable all Dutch people to drive electrically, a good infrastructure with sufficient and easily accessible charging points is essential. Nuon and McDonald’s are taking a great step in this today.”

Across the pond in the USA, Walmart announced earlier this year that its collaboration with Electrify America had opened over 120 ultra-fast EV charging stations across the US since June 2019. Electrify America is a Volkswagen-backed EV charging network which currently operates 302 open charging locations across the US. Interestingly most of these sites occupy retail and restaurant locations. These include 140 fast charging stations location on major routes across the country, which the company expects to rise to 480 across 42 states by the end of this year.

All Walmart sites will hold Electrify America’s CCS chargers, which can charge at 50kW, 150kW, and 350kW. These can provide EVs with anywhere between 150 and 1,000 miles worth of charge in one hour, depending on the model, allowing for significant mileage in the time it takes to do a grocery shop – although 1,000 miles is currently a little more than three times the longest range mass market EV’s capacity, so perhaps it’s more of a future-proofing concern.

The company has recently expanded north. Electrify Canada opened its first charging station in Ontario last week and plans to expand to 31 more locations by the end of 2020. We can assume these will be at similar sites to their USA stations.

At Riot, we have said that more EV charging infrastructure is needed in order to meet EV adoption targets. It is good to see that US players such as Electrify America are bringing some much-needed enthusiasm to the market. We find it curious that while McDonalds in Europe has made large efforts to incorporate EV charging into their brand, the US branch of the company appears to be lying still while other competitors race ahead to gain a share of the market. Perhaps it’s not wanting to invest in EVs at a time when it looks like a direct contradiction to its President’s position on climate change and renewables.

The International Council on Clean Transportation (ICCT) projects that there will be 3.6 million EVs in use in the US by the end of 2025 and that 88% of these vehicles will be found in the USA’s top 100 metropolitan areas. In 2017, these metro areas held 11,000 workplace chargers to be shared amongst 645,000 EVs – one workplace charger for every 58 EVs. While some drivers will charge at home, metropolitan locations where EV drivers can conveniently charge their car without idly waiting are still needed.