How to Scale Electric Vehicles

Learnings from Our Investment in Ample

This August, we announced our participation in the $31 million Series A round for Ample, together with Shell Ventures and other investors. Ample, led by serial entrepreneur, Khaled Hassounah, and John de Souza, aims to build a scalable solution for charging electric vehicles based on a new approach to the infrastructure.

Electric vehicles (EVs) are the future of the automotive industry. Last year was the biggest year for EV sales in the U.S., up 25 percent from 2016. Compared to gasoline cars, EVs have lower operational costs and have no dependence on gas fuel prices.

However, consumers are still slow to adopt this new technology. According to consumers surveyed on what influences their decision to purchase a gasoline car over an EV, their responses reflected three major elements which are hindering EV market penetration (Figure 1):

  • Battery range (range anxiety) (34.2%)
  • Cost of an EV (24.5%)
  • Lack of charging stations and charging time (26.2%)
Figure 1. EV Decisive Elements Influencing Car Buyers

Consumers showed a major concern over the distance they could drive before the EV would need to be recharged. This has been denominated in the industry as range anxiety. While this is mostly a psychosomatic phenomenon on the driver side, the other factors, including cost and lack of charging stations, are hard-core technology and infrastructure driven.

The battery needs a revolutionary shift in the technology which is the primary contributor to premium EV prices. Nanotechnology, new material science, and advanced battery design have been introduced to address the setbacks related to today’s lithium-ion batteries. Though, such development and production efforts also come with a heavy financial and capital investment, and long development cycle.

Thus, charging infrastructure will be, if not already, the deciding factor to scale EV in the near term.

In recent years, there has been an astonishing upward trend on the number of charging stations across the US. New public outlets have been added at a 65.3% CAGR between 2011 and 2016 (Figure 2). It is expected that further expansion will open more roads to long distance EV travel and network effects.

Figure 2. Charging Stations on the Rise Since 2011

Common charging equipment installed for today’s EVs is classified by the rate at which the batteries are charged (Figure 3). Charging times vary based on how depleted the battery is, how much energy it holds, the type of battery, and the charging equipment. While Level 1 and level 2 charging equipment types are conventionally found across major driving routes, DC fast charging stations are more scarce. The advantage of the latter is that they can charge for a longer mileage range in less than 20 minutes, whereas Level 1 and Level 2 charging takes about one hour and yields a shorter distance range. The downside of fast charging is the higher equipment cost, which can be thousands of dollars (compared to the AC charging price which is only a few hundred dollars).

Figure 3 . Charging Equipment Classification and Cost

The industry needs a new solution that will fill the gap between AC charging and DC charging. Thus, there will be new startups such as Ample, an economical, rapidly deployable, and widely accessible platform that delivers a full charge to any electric car in minutes.

Hemi began investing in the automotive industry two years ago. It started with self-driving trucks (Starsky Robotics and PlusAI), and grew to include GPS precision services (PointOne), middleware systems (Polysync), haptic touchscreens (Tanvas), and teleoperation services (Scotty Labs). We have observed that nearly all the autonomous driving test cars are hybrids or pure electric vehicles: Waymo’s Chrysler Pacifica minivans, Cruise’s GM Chevy Bolt, Uber’s Fusion, etc. EVs are easier for computers to drive, more efficient as ride-hailing services play an ever larger role in daily miles driven, and comply with gas mileage requirements. If we want to make the roads safer with autonomous driving, then we need to believe in the electric vehicles too.

Welcome, Ample, to the Hemi family!

Interested in working with Hemi or our portfolio companies?

Please reach out to partnership@hemi.vc.