EV Charging-Station Operators Set to Battle for Ad Dollars

The next battleground in the fight for U.S. marketers’ advertising dollars may be charging stations used by the growing number of Americans who own electric or hybrid plug-in vehicles.

ChargePoint Holdings Inc.,

the largest operator of EV charging stations in the U.S. by number of stations, will create a nationwide advertising network in partnership with digital display company Ara Labs Inc. and Destination Media Inc., which does business as GSTV and produces video ads at gas stations and other retailers. ChargePoint currently operates 28,753 charging stations out of a total 50,063 in the U.S., according to Department of Energy data.

The first ChargePoint ad displays will be live before the end of the year, and the company plans to install approximately 1,000 screens across 10 key markets in the year following the launch, said

Sean McCaffrey,

president and chief executive of GSTV. These displays will run ads in and around original, three- to five-minute videos with news, weather and pop-culture content, Mr. McCaffrey said. Advertising will be optional for businesses that buy and install ChargePoint chargers.

The pitch from EV-station makers to marketers focuses on helping them target upper-income consumers immediately before they enter a given retail location, where many charging stations are located.

“We’re at the places where you’re already going [and] spending your time and resources,” said

Brandt Hastings,

chief commercial officer at

Volta Inc.,

a maker of ad-powered EV charging stations.

Ads on Volta displays have “ensured that we are reaching a premium audience of EV and non-EV drivers at point-of-purchase for retail, grocery, entertainment and many more,” said

Stephanie Tarbet,

vice president of communication, brands and government affairs at tire maker Michelin North America Inc.

President Biden’s Inflation Reduction Act calls for at least 50% of an electric vehicle’s battery to be made in the U.S. to qualify for a federal discount. WSJ’s George Downs breaks down a battery to explain why that’s going to be a challenge. Illustration: George Downs

The number of stations that include display ads remains small at the moment, but analysts believe it will grow in coming years as EV businesses look for new revenue sources and both federal and state governments deploy billions of dollars to subsidize renewable fuel providers under the Infrastructure Investment and Jobs Act and the Inflation Reduction Act.

“In the next five to seven years in the U.S., there are going to be lots of runs at different business models to try to make the charging service profitable,” said

Nick Nigro,

founder of tech consultancy Atlas Public Policy. “[Advertising] could add some much-needed revenue to a business that doesn’t easily break even just selling electrons.”

ChargePoint’s revenue for the quarter ended April 30 grew 102% year-over-year to $81.6 million, with $89.3 million in net losses. The company is expected to report earnings for its second fiscal quarter next week. Volta reported $15.3 million in revenue for the second quarter, with nearly 75% of that total coming from ad sales, but also lost $37.4 million.

Kevin Fournier,

director of marketing and advertising at tire retail chain Discount Tire, said he has begun preliminary talks with GSTV about the new product.

“We want to make sure that our current customer base knows that we can service electric vehicles as well as their everyday vehicles across the board,” said Mr. Fournier, whose company has advertised on GSTV displays for several years along with brands such as

PepsiCo Inc.

and

Chipotle Mexican Grill Inc.

Volta, which launched a media network in late 2021 after going public via a merger with blank-check firm Tortoise Acquisition Corp. II, will be ChargePoint’s most immediate competitor for ad dollars. Volta has always based its business model around ad sales, and a spokesman said its network currently includes 5,400 screens and 2,920 individual charging ports across 28 U.S. states and territories.

A Volta charging station and digital ad display outside an Atlanta-area Kroger.



Photo:

Volta Inc.

Charging stations are a natural fit for automotive, packaged goods and entertainment brands, said Volta’s Mr. Hastings, citing recent campaigns from

Coca-Cola Co.

,

Netflix Inc.

and

FedEx Corp.

that ran on Volta screens.

Volta also encourages marketers to use its eight- or 15-second video ads to focus on sustainability messages, said Mr. Hastings. A Michelin campaign that ran earlier this year led to a 70% increase in consumer awareness of the company’s EV-specific tires, according to Ms. Tarbet.

The industry’s growth relies on deals with large retailers. Earlier this year, ChargePoint announced that it would install roughly 60 direct-current “fast chargers” at

Starbucks

locations, and Volta signed contracts to build stations in partnership with supermarket conglomerate

Kroger Co.

and the city of Hoboken, N.J.

Mr. McCaffrey, of GSTV, said that a key question for the shopping malls, movie theaters and fast-food chains that ChargePoint and GSTV plan to pitch is, “How do I begin to offer EV as an amenity to my consumers in a way that becomes affordable and scalable?”

ChargePoint and Volta’s business models differ in several ways. Both say they can target consumers by geography, demographics and behavioral data, but GSTV says its units will not directly collect any consumer data, while Volta draws first-party data from its mobile app and combines that with retail partners’ customer-loyalty databases. Sensors at Volta stations can also target consumers by the model of vehicle they drive.

Both firms primarily make and install Level 2 stations, which let owners charge their vehicles while parked for extended periods of time, though they also operate a small number of far faster direct-current stations.

Tesla Inc.

dominates the latter market with 14,840 individual ports out of a total of 25,324 in the U.S., per Department of Energy data, and plans to open its charging network to other automakers in order to apply for public grants.

The biggest challenge ahead for these businesses may be building enough stations to keep up with demand. The Inflation Reduction Act, which provides twice the amount of public funding made available to EV charging companies over the past 12 years, will create a “sugar high” as they rush to expand beyond major urban areas, said Mr. Nigro of Atlas Public Policy.

At this time, it is unclear how many more charging-station operators will create supplemental ad businesses.

Tesla Chief Executive

Elon Musk

has long decried advertising, but Mr. Nigro called the company’s charging-station network “the best form of advertisement that any [EV] manufacturer did in the 2010s” for giving consumers more confidence in the practicality of owning an electric vehicle. Tesla did not respond to requests for comment.

Write to Patrick Coffee at [email protected]

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