The developers from Charge Group brought to the Ukrainian market a cloud service for electric charging stations OnCharge
Ecology and economy: how does the mobile app for charging stations OnCharge work?
Yuri Dmitrishen, CEO of ChargeX in Kyiv told delo.ua why mobile apps for charging stations are needed, how to use them and how to earn money on them
Yuriy, how did you start with OnCharge? How did the idea came about?
We started in 2016. I was working in the IT field and began to think about how we could make the use of electric cars in Ukraine as comfortable as possible with the help of technology. At that time, there were no charging stations in Ukraine working via the OCPP
(Open Charge Point Protocol – European protocol used for communication between electric vehicle charging stations and the central control system – ed).
. I started communicating with different European operators of charging stations and asked them one question – “when will you enter the Ukrainian market? All of them predicted the market entry by 2018-2019. Realizing that we have a chance to fill the Ukrainian market with domestic hard and software for charging stations, I started to assemble a team and we started working on a mobile app for operators and owners of electric cars.
Who developed the first versions? How long did it take to develop?
Together with two partners, Vasily Stashuk and Vladimir Kravchenko, we set up Charge Group LLC and assembled a team of professionals with IT expertise.
It took a year to write the app software. All this was financed from our own savings – earnings from previously implemented projects. On April 1, 2017 we got our first results – we launched a working version of OnCharge and started connecting existing stations.
What functionality was initially included in the app? How has it changed over time? What needs of electric car owners were taken into account?
OnCharge is a cloud-based service that was developed as a link between the consumer and the operator. Using the app, the owner of an electric car can find the nearest free charging stations, build the best route to them, get information on tariffs and loyalty programs. In the app, you can see the history of transactions and statistics on charging stations.
In developing the app we started from the idea that it is the operator of the charging station that determines the scheme by which he wants to monetize its use. We developed 21 billing options. The owner of the charging station, who uses OnCharge, with the help of the configurator can choose how he wants to earn, or provide free access to the station, receiving statistics. For the owners of charging stations we have introduced the possibility to brand their networks – the app has their logos, and this allows them to conduct their own promotions, set special rates and loyalty systems.
We provided the KLO gas station network with our software for free test use. Thanks to this period we gathered a lot of feedback from users. Focusing on this feedback we improve our software and our roadmap in this direction is made for the year and a half or two years ahead.
For example, we have already removed the login and password for logging into the app, leaving only the connection to the phone number. We’ve also made it possible to charge by QR-code, and we’ve started to make payments every second instead of at the end of the transaction. The user always sees in real time how much money is taken from his account and how much electricity he consumes. This was difficult from a development point of view, but especially important for the consumer.
Why did you choose this particular business model? Wasn’t it easier to become an operator?
To become a big operator, you need a lot of money; we didn’t have it. And to become a good software provider, you need a professional team, and we had one. Therefore, we immediately decided that we would work in the field of software.
Did you get a license for financial services?
We are a software company, and we are in the business of providing content. As soon as the game WorldOfTanks will have a license for financial services, for example, we will also have one.
How is the app monetized?
Connection is free for operators. As for monetization, you have to understand that for an operator, “zero” does not always mean “zero”. Sometimes free charging stations are monetized in a non-obvious way – at the register as a hot dog, for example. Monetization doesn’t always “sit” in the kilowatt.
We negotiate the monetization scheme with each operator separately. For example, a certain private club house installs a charging station and wants it not to be displayed on the public map, but only available to the residents of that house. In this case, we make money on subscription fees and providing analytics. If monetization is done through acquiring
(technological service of settlements made with the help of electronic payment systems – ed.)
We get a percentage of the transaction.
How did you attract investors?
We started looking for investors as soon as the idea came up. It was difficult to find people who would believe in us right away, so we made the first steps together with my partners using our own savings. When we made the first versions of the app, we began to succeed, and Ukrainian private investors began to be interested in the project.
What does the Ukrainian market of charging stations look like now? How different is it from western markets?
Charging stations for electric cars are an expensive product, and European prices for them are determined taking into account the average wage in the country, the cost of certification and the production cycle. In Ukraine, the price level is quite different. What a European pays for acquiring, a Ukrainian pays for a kilowatt of electricity. For example in Europe you can pay 5 euros only for connection (for one charging session without reference to time or kW), for our country this is very expensive and unprofitable.
In addition, it is very difficult to compare markets, because in this niche there are many different business models and ways of monetization, and the price dispersion is also very high. There are different options. It all depends on the network and the country – there are quite a few business models. The most common ones are paying per kW or per minute of charging.
Before launching the app, we studied the best practices of foreign markets – Europe, the United States, and even China. The U.S. market leader, ShargePoint, works only in the local market. The largest electric charging solutions provider in Europe is the Dutch company NewMotion.
If we compare logic of thinking of Ukrainian and Western buyer of electric car, it is two absolutely different approaches. For a western consumer, an electric car means comfort in the first place. Using an electric car or a regular gas-powered car will cost the same amount of money for the Europeans. And in Ukraine electric cars are bought primarily by those who wants to save money. There is the second category of consumers – those who want to keep up with time.
In Ukraine, everything goes to the fact that soon the pursuit of low prices will yield to quality. Some Ukrainians are already willing to overpay for high-quality, certified stations. This is the only way they can be completely sure that nothing will happen to their car. In Ukraine, there is a demand both among private buyers who buy a station for their home and among the corporate segment.
Who are your competitors on the Ukrainian market?
We have no direct competitors, but there are operators with different approaches and business models. In Ukraine these are AvtoEnterprise, STRUM, Go To-U.
Our difference is that we do not have any certain model – we are completely customizable in each particular case. We provide a tool, and the operator decides how to use it.
In addition to the app, you also develop your own charging stations. How are they different from others?
When we have entered the market with the app, we have got our first customers – we have started cooperating with the chain of KLO Petrol Stations and have been gradually moving to other markets, we have realized that Ukrainian market of recharging stations has not been formed yet. We wanted to introduce to the market a Ukrainian product, which would be available at a price lower than the European one and at the same time it would be developed in compliance with all European requirements and standards.
We first created a charging station in the fall of 2017. Strictly speaking, our development is not the entire station, but the controller – the “heart” of the entire device. The power part and the port we use are already ready-made.
When we approached the question of creating the controller, we had the task of making it very small and as innovative as possible. Therefore, the charging stations with our controllers not only charge electric cars, but also work at 4g speeds, which allows public Wi-Fi distribution, in addition, they have a built-in electricity meter and power supply regulator.
To keep within the given minimum dimensions of the device, we searched for the necessary components all over the world – mainly we bought them in Europe and the USA, some spare parts were ordered from Taiwan.
We started demonstrating this expertise at trade shows and started getting inquiries from abroad. Now we focus mainly on the European market: Poland, Slovenia, Italy, Portugal and Spain are not the richest EU countries, and the price plays an important role for local consumers. We already have agreements to supply plants to Poland.
But the Ukrainian market will also receive a product. As part of the Kiev Smart City acceleration program, in which we participate, we will provide a new innovative solution for the capital’s infrastructure. To date we have already produced 500 stations.
How big is your team now? Who implements the project?
It varies from period to period, up to 19 people. The main backbone of our team is the creators of the team, three of us and five people who are responsible for legal, accounting part and other business processes. There are also technical specialists, whom we connect to specific tasks.
What type of certificates do you need to get for the charging stations? How does certification take place?
Every country has its own national quality standards. In terms of quality standards for charging stations, they are created and submitted for approval to state authorities by car manufacturers.
As a rule, it is only possible to get certified in countries where electric cars are produced. Regarding the market for electric cars, the world is now divided into three spheres of influence, with different standards. The Chinese market has its own requirements, and they are only valid in China.
America has a single-phase voltage format, while Europe has three-phase. Here we are closer to the logic of Europeans – we can get one phase from three voltage phases if we want, but not vice versa.
In Ukraine, there is no legislative definition of the term “charging station” and, accordingly, there are no standards it must meet. Someone equates the stations to sockets, and someone equates them to MAFs. And the Ukrainian-made charging stations that are installed in Ukraine do not have the same set of standards as the European ones.
What are the perspectives of electromobility market in Ukraine?
Everything depends on range, which electric car has. At the moment, the one represented in the Ukrainian market, for instance, is Nissan Leaf, which has an average range of 130 km. But in order for an electric car to become the first car in the family, and not the second, it should have 300-500 km of range. Therefore, the battery capacity of an electric car will only grow, and this will determine the market landscape.
Right now the official distributors of BMW i3, Hyundai IONIQ, Renault ZOE are actively entering Ukraine, and Audi will be launched by the end of the year. Moreover, in a couple of years a lot of European carmakers will come to Ukraine and are now reorienting their production lines towards electric power.