Auckland man bets his house on an all-Tesla taxi company – and loses
New Zealand’s only pure-electric taxi company is going to the wall – and its owner is blaming the state of charging networks (more on which below).
When NBR last caught up with Bernard Brommell in mid-December, his attempt to launch an all-Tesla taxi company was not going well.
“The One Hundred Percent Electric Company” or OHPEC (launched October 1) had been in business for a couple of months but few had downloaded his app, and he could count regular customers on his fingers.
The NBR coverage helped. "We saw a big increase in business as a result, for a week or two," Mr Brommell says.
But with no marketing followup, business dried up again.
He had six Teslas, with two more on order, but they were spending most of their time idle.
Now it's time to pull the plug.
The former software programmer says he will formally wind up the business on Wednesday.
He’s keeping one vehicle for himself and leasing one to a driver. The others he’s selling back to Tesla at a loss of $50,000 per car.
Mr Brommell is also going to execute his worst-case scenario plan and sell his home in well-heeled Half Moon Bay in Auckland’s eastern suburbs, which was used as collateral for his business loan. He says he’ll move to small-town Raetihi in the central North Island, where he’s looking for a property with Airbnb appeal.
Sometimes when you build it, they don't come
The 57-year-old is philosophical, saying he always knew there was a possibility he could lose his house.
But he’s still angry and baffled that his drivers spend so much time idle. Lots of people and organisations talked a green game but not even the tiny number he was banking on have booked rides in his zero-emission cars.
Part of it was his marketing or lack of it. A ride in a luxury Tesla Model X for the price of an Uber was an irresistible proposition – unless you'd never heard of it.
Commenters pointed out there was already a taxi company catering to the green dollar, even if its vehicles were not as cool as Mr Brommel’s fleet of Model S ($121,395 to $214,645) and Model X ($121,345 to $244,345) Teslas.
Not got the power
The geeky, impossible to remember name didn't help, either. Nor did the gulf between the pristine business plan on Mr Brommell's computer and the real world of hotel concierges who froze him out because he wouldn’t pay a kickback.
But the east Aucklander says the deciding factor increasingly was that it became too hard to charge his cars out in the field.
Broadly, his logic was that he could charge a cheaper ride fare for a $200,000 Model X than most operators stung you for a dodgy old Prius because the Tesla had low maintenance costs, and required no petrol.
But he discovered that although often free (or, if they charged, only a fifth the cost of an equivalent top-up), Mr Brommell discovered there was an opportunity cost in the time it cost to recharge. A supercharger can charge an electric vehicle in 15 to 30 minutes, depending on model; a regular charger takes six to eight hours.
Vector's network of free chargers around the city have become noticeably busier over the past few months, he says – prompting a policy change by the lines company. Government and commercial vehicles can no longer use its free chargers.
Mr Brommell says the lines company has slowly been squeezing him out. It got to the point where the only Vector fast charger he could use as a commercial operator was the one at the airport – meaning a recharge took about 90 minutes, including driving out to Mangere and back. But he's just lost access to that one, too. It was the final straw.
Vector corporate communications head Richard Llewellyn says his company now has 18 public rapid charging and nine standard charging stations in Auckland — a ratio of one super-charger to every 125 electric vehicles, in line with international norms. It's an open question whether Vector will maintain that ratio. "Our thinking on charging infrastructure and EV’s will likely evolve as take-up increases and ownership models changes," Mr Llewellyn says. Meantime, it continues to expand. There are two more Vector rapid chargers being added shortly in Wellsford and Henderson.
"To date Vector hasn’t charged anyone to use the EV charging infrastructure it has built, although we have been consistent in reserving the right to potentially change this position as the EV market grows and evolves," Mr Lewellyn says.
"We have also been consistent in our position that the charging infrastructure is there for the benefit of the general public and wider EV community to help increase the uptake of EVs, and is not intended to support commercial operations. This position hasn’t changed," he adds.
"[But] Vector has received complaints from members of the public about their inability to access the free public chargers, either because commercial vehicles are using the chargers or because other users have left their cars ‘parked’ at a charger for a long period of time. As a result we introduced time and commercial-use restrictions at our busiest chargers."
Tesla: no timetable
Mr Brommell is particularly sore that Tesla has yet to launch a public supercharger in Auckland. And that, since, November, it has also blocked commercial vehicles from free chargiing on its regular chargers.
Tesla has superchargers in Hamilton, Taupo and Palmerston North. That’s of stuff-all use to a taxi fleet but convenient for a private electric car owner who charges overnight while in Auckland, and wants some hops on the way to Wellington (Telsas have a range of 450km to 550km, depending on battery options; if you drive with a heavy foot mileage diminishes noticeably, as with petrol).
A spokeswoman for Tesla Australia-New Zealand confirms the company does have plans for a supercharger in Auckland but says there’s no timetable. As with other companies, there is an equal or greater focus on "destination charging" or regular chargers installed at shopping malls, carparks and other places where drivers are likely to spend a few hours.
Other initiatives are in progress.
Spark has put EV chargers in a number of phone boxes dotted around the borders of Auckland.
NZTA recently put out a request for proposals for a national charging network for the Crown fleet (shortly before leaving office, National set a target for one in three of the 5500 or so vehicles used by the government to be electric by 2021).
And ChargeNet, backed by Bruce Sheppard and other private investors, has partnered with Z Energy and others to build a network of charging stations around New Zealand, with one rapid charger for every 80kim of state highway or urban road, which will provide the thousands of re-charge points Mr Brommell sees as essential for New Zealand’s future.
That’s the goal. Today, Charge.net has two charging stations in Auckland, and 64 sites nationwide – only one of which is fast-charge.
No cart before the horse
There are now about 5000 all-electric vehicles in New Zealand. Last year, there was 140% growth, thanks to Tesla's booming sales after setting up shop in New Zealand last year, and the government’s EV incentive package, which includes no road user charges for EV owners (saving them around $600 per year) and the right to drive in T2 and bus lanes (something that's still in the trial stage, thanks to truculent roading authorities).
But, as Mr Brommell learned, none of the charging network contenders is prepared to invest ahead of the market.
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