Blockchain technology has the potential to disrupt current business models and seamlessly bring positive change to the existing EV value chain.
What is the first thing that comes to mind when we hear blockchain technology? Bitcoin, Ethereum, crypto? In reality, blockchain is a lot more than that. Itcan transform businesses from various industries in a way we couldn´t even imagine a few years ago, including in EV Charging.
The main business benefits blockchain brings to the table are:
1. Costless verification of transactions – you can quickly and without hassle check any transaction of data or value within a complex system. For example, four different banks have been transferring money to one another over a month. Each of them has its accounting system, which in the end tells them who owns what and to whom. If there´s a dispute, a person from each bank needs to check on every step of the money flow. With blockchain technology the same process is completed within seconds.
2. Decreased cost of networking – maintaining a digital network requires resources, servers, power etc. Rewarding participants who enrich this network with their contribution, i.e., mining activity, lowers the overall cost of networking. This, however, is only applicable to the so called permissionless blockchains, where anyone from anywhere can participate without limitations.
3. Processes automatisation – blockchain technology is a stepping stone in the development of smart contracts (events and transactions that are executed automatically when certain conditions are met). For example: A company assigns you the design of their new logo. You have exactly 15 days for submission, and the company has 3 days after that for approval. After you send your work, and they give their “ok” the smart contract automatically transfers the agreed amount to you and at the same time issues a certificate to the company stating that as of now, they own all rights to this logo.
What a typical EV charging process looks like
The current charging station experience is still quite complex for the electric vehicle driver. This is especially true in Europe. As many other booming industries before it, EV´s ecosystem is facing the challenge of having too many players, offering all kinds of products and services.
Charge Point Operators (CPO), eMobility Service Providers (eMSP), roaming partners, payment companies, equipment manufacturers, software developers etc. are all trying to work together and provide the best user experience for the driver. This is not an easy task, considering all the participants in the value chain need to achieve the best economic result possible for themselves, without hurting the relationships with their partners.
Today, in most cases an EV driver in Europe would subscribe to an eMSP, which will give them the opportunity to charge their electric car at any CPO within the eMSP´s network. The driver simply goes to the station, which is either the closest or has the best commercial offer. The driver pays their bill directly to the eMSP.
Then the CPO, who is the provider of the actual charging service, would typically have to wait a few weeks before receiving their part of the paid amount. Also the CPO has to pay a number of commissions and fees to different players within the charging ecosystem.
Blockchain technology can improve, speed up and lower the cost of all these processes.
Now, imagine a similar situation, where the eMSP uses a blockchain platform to manage the financial and operational flows between all its partners and the EV driver. A stablecoin (EVC – EV Coin), issued within the ecosystem would be the currency used for transactions. The driver buys 100 EV Coins for €100. With it they can pay for charging their vehicle or for booking a spot at prime locations and busy hours.
After completing the charging, a smart contract is activated, and the CPO receives their crypto money instantly. At any point of time both drivers and CPOs can exchange their EV Coins for euros/pounds/kronas etc. No monetary value is lost for fees and transaction costs. Thanks to the ease of use and simplicity of the model, the driver’s experience is optimal. The CPO benefits from hassle free onboarding, processing of transactions and new client acquisition.
Moreover, in the coming years, when the Vehicle-to-Grid (V2G) technology starts being applied on a larger scale, drivers will have the opportunity to resell the stored energy in their cars back to the grid. A blockchain platform will be ideal for processing the high volume microtransactions that will take place.
After the revolution seen in the financial, insurance, retail, pharmaceutical, art, tech, real estate and many other industries, the time has come for electric vehicle charging to be transformed from a complex ecosystem with multiple players and processes into an automatized, inexpensive, and simplified experience for both drivers and service providers.
The blockchain technology-based platform will set in motion this inevitable change and will allow more innovation in the industry and development of new business models such as mobility service manager for example. Imagine in the near future, a single app can be the architect of your entire travel to work, school or a shopping mall. It will create the optimal route and with the help of smart contracts will automatically pay for everything. You just have to relax and enjoy the journey.