« Price of gas reaches record high in Hilo | Main | Hawaii is becoming ideal market for electric cars »
Friday
Mar232012

Taking charge of a fast-growing EV market 

Volta Industries owners, from left, Chris Ching, director of operations; Michael Menendez, lead engineer; and CEO Scott Mercer check out one of their charging stations at Kahala Mall. Their business model is simple: Make the charging stations available free of charge at select locations, then charge businesses to attach their advertising messages to the stations. [Pacific Business News]
(Pacific Business News)  Scott Mercer and Chris Ching look at electric vehicle charging stations and see advertising opportunities.
 
The 25-year-old entrepreneurs believe that the business model for their two-year-old startup company, Volta Industries, will generate revenue as Hawaii’s market for electric vehicles continues to grow.
 
Hawaii currently has 700 registered electric vehicles, a number that the State Energy Office expects to grow to 210,000 by 2030. EVs need charging stations, and shopping malls and parking garages see them as a way to attract business.
 
Enter Volta Industries, which will install and maintain the charging stations for free, in exchange for selling advertising space on them.

Mercer and Ching launched their business in February 2010 along with Michael Menendez, an engineer who designs the charging stations. Volta has a contract with the state for five stations in government facilities, where drivers pay $2 an hour to charge their vehicles.
 
It also has two stations in Kahala Mall and two in Pearlridge Center with contracts for another dozen stations at various locations including Kailua Town Center. It will have 30 when all of its current signed contracts are executed.
 
Each station costs $20,000 to $40,000 for the installation and related work.

“We approach the properties that we are interested in directly and offer it to them,” Mercer said. “It’s not something we are looking to do at every mall.”
 
The stations in commercial areas use Volta’s advertising model — it installs and maintains the units for free and reaps the advertising revenues. Volta signs five-year contracts with the owners of the locations and contracts of up to one year with the advertisers. It expects to have a return of 28 percent on stations it installs in government locations.
 
Citing proprietary reasons, Mercer declined to say how much Volta expects to make on advertising, but he said the private locations are considerably more lucrative than the public contracts.
 
“It is great marketing and the people driving the cars stay longer [at the malls] and spend money,” he said.
 
Volta, which tracks the stations’ usage online, has found that it is taking 30-45 minutes to charge a vehicle and they are staying connected for at least an hour.
 
Companies advertising with Volta include RevoluSun, Central Pacific Bank and Cutter Mitsubishi, which advertises its i-MiEV electric car.

Advertising rates depend on the size of the ad space and location of the charger. For example, the backlit advertising section on the front of the charger is smaller than the ad space that takes up the entire back. Mercer said the intent is to place the stations in high-traffic areas.
 
Customers like the convenience of having charging stations in public places.
 
“I think it’s great,” said Ingrid Zhao of Kahala, as she plugged her Chevrolet Volt into one of the stations at Kahala Mall. “I feel I can come here and watch a movie [while the car is charging]. It’s very fast.”
 
RevoluSun is the largest advertiser with Volta to date.

“It’s a natural fit for us because a lot of our clientele are the same clientele that are looking at electric vehicles,” said Eric Carlson, director of marketing. “It didn’t take more than a minute of listening to Scott talk to say we want to sign up.”
 
Carlson said that although the advertising has been in place for only a few weeks, if he goes anywhere wearing RevoluSun clothing people comment about the company’s advertising with Volta.
 
Cutter Mitsubishi started advertising with Volta last Friday.
 
“They are helping us spread the word about electric vehicles — I thought it was unique, it’s different,” Patrick Ah You, the dealership’s general manager, said about Volta’s advertising model. “I like the area at Kahala Mall. It’s very visible. There’s lots of EV owners that live out that way.”
 
Kahala Mall officials say they like the idea, especially since state laws mandate that they install charging stations.
 
“As far as the units themselves they are getting quite a bit of activity, which surprised me,” said Floyd Williamson, general manager of Kahala Mall.
 
Pearlridge Center officials said its shoppers have given them positive feedback.
 
“I thought it was pretty unique and it would be something good for the center,” said General Manager Fred Paine.

Volta wants to install 40 to 50 stations in Hawaii before it takes its business national.
 
“This is still very much a startup model,” Mercer said. “So we are looking for significant growth in both the Mainland and Hawaii and we are looking to jump to the Mainland this summer.”

Hawaii Clean Energy Initiative