In this episode of the show, Gary discusses Sainsbury's entry into the electric vehicle charging market with their new "Smart Charge" initiative. Patrick Dunne, Sainsbury's Director of EV Ventures, explains the company's strategy to install 750 ultra-rapid chargers at 100 stores by 2024.

The discussion covers Sainsbury's motivations, the decision to use ultra-rapid charging, the selection of Kempower as their hardware provider, and the challenges of rolling out a large-scale EV charging network.

The episode also touches on pricing strategies, site selection, and future plans for roaming and customer-centric innovations.

Sainsbury's in-house EV rapid charging CPo has risen quickly to become one of the major players in the market. We talk with the managing director about that ascendency, the plans for the future and what specific challenges arise from being limited to locations by your own geographic holdings and local grid constraints.

This season of the podcast is sponsored by Zapmap, the free to download app that helps EV drivers search, plan, and pay for their charging.

Links in the show notes:

• V2G on the Australian grid - Cool Thing

Episode produced by Arran Sheppard at Urban Podcasts: https://www.urbanpodcasts.co.uk

(C) 2019-2024 Gary Comerford

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The EV Musings Podcast is sponsored by Zapmap, the go-to app for EV drivers in the UK, which helps EV drivers search, plan, and pay for their charging. Zapmap is free to download and use, with Zapmap Premium providing enhanced features which include using Zapmap in-car on CarPlay or Android Auto and help with charging costs with both a pricing filter and 5% discount*"

Gary: Hi, I'm Gary and this is EVmusings, a podcast about renewables, electric vehicles and things that are interesting to electric vehicle owners. On the show today we'll be looking at the latest disruptor to the EV charging market, smart charge. Before we start, I wanted to thank everyone for their feedback on the video version of the episode I did recently.

Be one on subscriptions, check it out on YouTube if you missed it. Stay tuned, there may be more in the future. And that's all I'm saying.

Our main topic of discussion today, smart charge. You might not be aware of smart charge at the moment, but you probably will be as they expand over the coming weeks and months. Smart charge is the brand name of the in-house Sainsbury's ultra-rapid charging offering.

The mission in a supermarket is the shopping mission. That is the primary purpose to come to a supermarket. That is Patrick Dunne.

Patrick :I'm Patrick Dunne. I work at Sainsbury's. I'm the group's property director, the group's procurement director and now the group's director of our EV ventures, electrical vehicle ventures, which of course includes smart charge.

Gary: Sainsbury's are well-known as a supermarket, but not that well-known as being someone involved in charging. So Patrick, what made you decide you needed charging at your stores?

Patrick :I think Sainsbury's, the majority of your listeners will know who Sainsbury's are, but as the second largest grocer in the UK.

But it's also a grocer that has a huge heritage in doing the right thing and a lot of innovation in its heritage. We also have a fossil fuel business, and let's face into that, which has been an essential part of British logistical transport driving. But someday, fossil fuel will dissipate and decline.

But thirdly, I think we also identified that the shopping mission has many different, our car parks have many different people coming into it. And we could play a strong role in getting the UK in totality to convert to zero emissions.

Gary: Okay, so that's why you wanted to install them.

Patrick :There are literally dozens of existing charge point operators who can provide charging for Sainsbury's. So why decide to do it yourself and go your own way?

Fundamentally, I build things in Sainsbury's.

So I have a great extensive team that has a capability to build supermarkets, to maintain supermarkets. We have a lot of freehold land, we buy electricity, I build wind farms with development partners, I have six renewable energy wind farms. We have a skill set that we believe, I'm sorry, we have a great maintenance regime across our estate as well.

And so we had a lot of characteristics that lends itself to being a charge point operator. If we were to look at some of your competitors in this market, some of whom have been more successful and some less so, why did you decide that ultra rapid charging was the way to go? There was a number of considerations.

Number one is we spent quite a bit of time traveling the UK and looking at what operators had deployed into the market from, as you say, seven kilowatts, two kilowatts. But one of the things we identified was it was a very technology driven decision and there was a lack of customer centric thinking in the way many of the sites were deployed. There's some brilliant operators out there, don't get me wrong, some amazing technology.

But secondly, we realized that the mission in a supermarket is the shopping mission. That is the primary purpose to come to a supermarket. And the average dwell time there is 35 minutes.

And so when you put a number of things together, you realize that time is critical in the customer consumer's thinking process. So not just time, but the fact that they could do dual missions, they could come and do their shopping or come to Specsavers. We have an extensive estate of over nearly 100 Specsavers.

We have Costa Coffee, Starbucks. So they could actually have multiple missions, including charging your car. But the average dwell time for us, we worked out was 35 minutes.

And so ultra rapid really fit into that maximum potential that someone could charge their car considerably within that timeframe. One single hardware choice that would allow us to not only serve today's mission, but also future protect the growth in what will be EV batteries and so forth. And so it has many years future protection built into that.

But it was fundamentally about time and the shopping mission.

Gary: We all love KemPower here. And we had Tommy Ristimakki, the CEO of KemPower on the show back in episode 146.

What is it about Ken Power that made you go for them in preference to say some of the other ultra rapid charger providers such as Alpatronic?

Patrick :Well, again, one of my key roles over 30 years is procurement director. And so I have an extensive team of people who look at sourcing.

So we did a global sourcing RFI, RFP, a lot of research. And when you come down to the shortlist, and there was a shortlist, Ken Power by far outshone most of their competition in most areas, not only from an internal perspective and from our competitors perspective, but from a customer perspective. We listened to what customers were saying.

If you go on many of the chat rooms, they love Ken Power product. It's reliable, easy to use. And also it ticks another box, which many CPOs maybe didn't consider in the early days, but the accessibility of a ChemPower piece of equipment also helped, if you cite it in the right location, also helps those with less abilities, not only the e-mobility sector.

And so it ticked a lot of boxes for us, but also as a partner, they have been fantastic. And you know, we headed out to Finland probably about two years ago, and we, you know, at the foundation of all business is great relationships, and we have a great relationship with ChemPower, and hopefully they would say the same about working with Sainsbury's. We've had our moments, of course, when you're rolling out quite rapidly, sorry for the pun, but ultra-rapidly, some would say, that it's, you know, it challenges your supply chain, challenges you technologically, but we work together, and as I say, we're always above 99% reliability for our equipment.

We had some teething problems in the beginning, as you would with commissioning our sites, a lot of learning, but now I think we've crossed that hump considerably a long period ago, and we have a great operating model.

Gary: Sainsbury's has quite a big footprint nationally in terms of stores. Obviously, some of them will be unsuitable for EV chargers for various reasons. Talk to me a little bit about the process of deciding which stores should get the charges.

Patrick :It's quite interesting, because I have also a very dedicated team of people whose job it is to be what are location planners.

We open, I also open a lot of new stores, convenience stores, supermarkets, etc. So we have an inherent skill set about what makes a successful store. Within Sainsbury's, we can tell you where there is a need for a Sainsbury's store within a 50 meter locational pinpoint in any part of Britain, and where we don't need to be.

However, that skill set was not a hundred percent the use case for deploying ultra-rapid charging sites. So in the early days, the first three to five sites, we sort of identified our largest supermarkets. In reality, that with hindsight for one of them, didn't make for the most successful EV charging stations.

So we've learned that we're now on version three of our site selection for EV charging, but it starts with what makes for a successful EV charging location. Number one is how many electric vehicles are in that region. Number two, how many competitors are there serving those customers already.

How many driveways are in there, how many non-driveways, etc. But it then also comes to the point where, you know, do we own that supermarket, do we lease that supermarket, etc. So there's a lot of ingredients goes into it, and as I say, we're on version three.

We've been fine-tuning that, and I think now we've got to a relatively, it's constant prudent of course, but a relatively successful model in the last 30 to 40 locations we've selected.

Gary: Of course, one factor that can play into this is things like seasonal variations with charging. Talk to me about that.

Patrick :We opened in Kendal, not one of our largest supermarkets, but it had a strategic purpose for us to be in the electric district. And it's been hugely successful spring and summer, and we're looking forward to seeing how it performs in the winter. I think it might be quieter there, but who knows.

As a supermarket that's also a chargepoint operator, Sainsbury's do have a bit of an advantage over a lot of other chargepoint operators. One of the things about Sainsbury's and supermarkets, most supermarkets, is I have ANPR in the majority of my car parks. What does that do for me?

A, it allows me to understand the time that people are dwelling in the car park, but B, it allows me to identify the total quantum of EVs coming onto the site. And so when we select sites, we can see what the total potential is for that location. So that's quite an important thing that many other CPOs probably do not start with.

And so we were able to start with a population of EVs that we know on a daily and weekly basis are transiting into our sites, which also adds to the selection process as well.

Gary: I did reach out to a couple of other chargepoint operators about this point, and one comment that came back was that this could be an advantage for places where cars would not normally be expected to specifically go to charge, such as a supermarket. But for places like, for example, motorway service areas, this is seen as a captive market, so knowing the volume of EVs doesn't necessarily give you an advantage.

But let's move on to pricing. Patrick, talk to me about your pricing model. It's widely believed that supermarkets provide cheap petrol because they subsidize it. Can you do the same with the charging?

Patrick :Supermarkets do not subsidize fuel to bring in customers. Supermarkets try to have the lowest cost fuel locally, regionally, nationally, which incentivizes customers to come.

So, you know, we don't sell fuel at a loss, as a loss-making venture. I think from our pricing strategy, yes, we're a supermarket, we will be, and we're planning to be the lowest cost operator that we can be within reasons of not being reckless, and, you know, we have a huge investment on our estate, we buy power that's a cost, we have operating costs, etc. , and so we have to give a return on investment.

We're a public company. For our personal pricing strategy at the moment, for SmartCharge, we looked at the different types of charging from slow to rapid to ultra-rapid. I'm sure your listeners will understand that the faster it goes, the more expensive the hardware, the more complex the infrastructure, and it all comes at a high cost.

And so there's a standard model of looking at payback and returns and so forth. We have a huge electricity purchasing cycle that brings you an energy price, which may not always be the most competitive, depending where you are on your long-term hedging strategy, but the ultimate goal is to buy the lowest cost power, renewable of course, and then ultimately to give the lowest cost charge that we can afford to bring to the market. We're going to try to be the lowest cost operator in ultra-rapid, excluding mainstay player, excluding, I think, Tesla.

We have to call out here because, you know, they have a system that allows them to sell vehicles on the back of their charging, etc. So we looked at the industry and we looked at the pricing and today, from day one, at 75 pence a kilowatt, we were at the bottom quartile of ultra-rapid charging CPOs. And that's us getting started.

And so just imagine over the next few years where we could take the pricing to, but our commitment is to be the lowest cost operator in ultra-rapid and we'll continue to move that.

Gary: Notwithstanding what you've just said, you've setled on a tariff of 75 pence a kilowatt hour at the time of recording. Not the cheapest, but not the most expensive.

Patrick :I think we're priced quite competitive. I think second to that is we did quite an extensive survey of over a thousand EV drivers, coupled with we did a pricing trial where we reduced the price to 69 pence a kilowatt in 12 of our locations. And price was much further down the priority list from those 1,000 drivers than we had expected.

Number one was reliability. Number two was accessibility. And pricing is important, but it wasn't in the top three considerations for which sites you would choose.

There was a range of pricing which was between the 65 and 80 pence that they felt was relatively acceptable to pay.

Gary: I would be remiss if I didn't bring up podcast sponsor ZapMap and talk about the fact that you're live on ZapMap with your live status updates for your units. Now that's extremely useful for EV drivers. Talk to me a little bit about that.

Patrick :Two things. One is all of these innovations is a technological challenge.

So just even working with ZapMap, I have a technical team that and the ZapMap have a technical team that make it possible for them to have live feed into. And we have many of those conversations going on across multiple, as I say, customer-friendly tools that are needed to help you on their EV journey. But as I say, the ZapMap analogy is, you know, whatever consumers need, whatever we think makes consumers lives easier, we are open to work on that.

And so the more that innovation happens in the market where consumers are picking up. Now ZapMap is the number one sort of EV mapping and go-to place, let's call it. And so it's critical that we're partnering with them.

And we'll do that with anyone and everyone who supports the need to help consumers have a more simple EV experience. But these things take time and you can't do everything with everyone. And so you have to prioritize.

And so we've been prioritizing. Number one has been consumers who come into Sainsbury's supermarkets. Number two is consumers who have not yet ventured into a Sainsbury's supermarket.

And then number three will be the fleet markets and how we make sure that ultimately 100% of every EV passenger vehicle or low cargo vehicle can access smart charge and vice versa.

Gary: Which brings us nicely on to roaming. Are you with any roaming services?

Do you plan to be?

Patrick :Again, we haven't yet launched roaming at all. But we are talking to a number of partners, again in a prioritized way.

We have a fossil fuel business, for instance, Allstar is a great partner there. Electroverse is also a great company and we're talking to them there. And Powell, we're talking to them.

And so it's all about prioritization because each one of those ventures, again, takes a technological brings a technological challenge for us to be able to, which is I have a very small team, to be able to enable it successfully and go live, you know, right first time. But yes, as I said at the beginning, to make it as accessible and as simple as possible for every EV driver in the UK. And so we will work our way through a roadmap of obstacles, hurdles and open up partnerships that enables that to happen.

And also for those innovations that haven't yet happened, we will be open and up for listening, adopting, so long as it makes that the EV journey accessible. One big bugbear for me and a source of pain for a number of charge point operators is third party credit card readers. Some charge point operators have managed to crack this, others less so.

No, they are a three way collaboration between Sainsbury's, Kempower and Wardline. And we pioneered that. We were the first to do that with Kempower because originally Kempower didn't provide those sorts of payment terminals.

One of the downsides of being Sainsbury's is we have to be what's called PCI compliant. And so the control of that whole payment supply chain has huge controls over it to keep it simple. And in order to, it took us six months to achieve that PCI compliant supply chain between those three parties, which gives the consumer confidence that we have a very secure payment system.

And it links into the global Sainsbury's payment system as well, actually. So the reliability of the uptime, you have the hardware uptime, but also the payment system, as you say, people would turn up to car parks where maybe the charger was working, but the payment system wasn't working. We have instant, real time understanding of how effective and operational our payment systems are.

So that again helps with when we talk about above 99%, it is including our payment terminals. But again, it's been a tough but very good collaboration to achieve that. And it works very successfully.

Gary: Of course, with the new charge point operator, there's always a learning curve. Now you've talked about how you're on the third iteration of your rollout process. Mistakes were made or opportunities lost in the early days.

But now that you've got a large EV charging footprint across the country, how are things doing? Can you share any stats?

Patrick :Again, I have to be careful here because now we're in a closed period.

But, you know, we have over 30,000 customers a month. And we're just over one year old. I have, I can see how many EVs come into my car parks every week, every month.

And we're converting about 15% of those into charging with us. And we've done over I think it's 22 million miles. I may have got that stat wrong between kilometers and miles.

I think it's miles of zero emission miles since we launched just a year ago. So for those clever enough behind the scenes, they may be able to do some calculations and try an estimate. But all I would say is, we're pretty pleased with setting up a new venture.

It's 12 months since we set up our first site on the 20th of July in Harrogate, our first real site. And we now have 56 locations, 456 chargers, and we have a lot more yet to come.

Gary: So finally, I want to do a call back to the roundtable episode at the end of last season.

Patreon supporter and friend of the podcast, Ron Godfrey asked a question. about potentially splitting the car park so that EVs were in one place and internal pushing engines in another. This was meant really as a means to highlight the fact for ICE drivers that there are quite a few EVs and Chargers out there.

I also think that having the Charger price and availability on the totems would be nice.

Patrick :It's something we're thinking and planning, of course, when you move into a well-established supermarket, the capital cost to convert all of these things and put the totems up and change the totems is quite prohibitive, to be honest, in the beginning. But yes, over time, you would expect to see, particularly for some of our new...

I was at a new supermarket that we're building in Alsace, where we'll lay down eight charging bays, the totem pole will have the smart charge and the pricing on it alongside petrol and diesel. So it takes time. It'll take time.

Going back to your point about segregation of ICE and ICE vehicles and EV vehicles. We don't overtly do that, but we do. Let's take our Foss Park in Leicestershire.

We try when we design the location and the bay layout to try and find a way of having that as a one way in, one way out. So Foss Park is a dedicated EV hub where it's very clear to any petrol diesel driver that this is for electrical vehicles only. And so more and more we try and do that.

We'll try and line them up in a way that is very visible and with signage that you cannot be mistaken for believing that this isn't for electric vehicles.

Gary: So a couple of takeaways from this discussion. The Sainsbury's smart charge ethos appears to be customer first.

They'll look at things like subscriptions, time of day tariffs, roaming apps, etc. as long as they think there's a demand for it. Secondly, they have an aggressive rollout strategy.

71 sites with over 600 charging bays all from a stand in start with an incredibly small team is really, really good work. They also have something of an advantage over a number of other charge point operators in that their ANPR system can give them a lot of information about the EV traffic passing through their store car parks. I chatted with Patrick after we stopped recording and he revealed that Smart Charge are not a member of the industry body Charge UK.

Patrick cited similar reasons for not joining as Adrian Keane from Instavolt did when I talked with him about the same subject. He felt Sainsbury's had enough influence with government to not need to go through a third party to affect change. One to keep an eye on, I think, Smart Charge and Sainsbury's.

This season, we're looking at raising the awareness of carbon literacy with our listeners. And one way we're doing that is with the carbon fact as read by carbon literacy trainer, Ann Snelson.

Ann Snelson: 2.5 billion single-use plastic and paper cups are used in the UK each year, only one in 400 of which are recycled. The rest go straight to landfill. So please use your own beaker or bottle whenever you can, and if possible, avoid using single-use plastic bottles.

It utilised 50 ACT government-owned Nissan Leaf electric vehicles and chargers across Canberra. Another project partner, JetCharge, set up the chargers to monitor the state of the electricity system. Electricity retailer ActuAGL programmed the chargers to discharge short bursts of power to the national grid on the rare occasions it rapidly loses power generation.

When the grid went down, these vehicle-to-grid power stores were switched on and the power being delivered into the affected areas was kept going continuously. At the time of the event, around 1pm, 16 electric vehicles from the fleet were plugged into chargers at six properties across Canberra. Four vehicles were charging, 12 were idle.

When the power generators disconnected, that created an immediate shortage of power supply in the national grid. In total, the 16 vehicles provided 107kW of support to the grid. This was the first time in the world such a vehicle-to-grid response to a grid emergency has been demonstrated.

For context, they would need only 105,000 vehicles providing such a response to fully cover the typical spare capacity in NSW and the Australian Capital Territory system used to balance supply and demand when an unexpected event occurs. Vehicle-to-grid for the win, right? Where I post short videos and podcast extracts regularly.

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Regular listeners will know about my two ebooks, So You've Gone Electric and So You've Gone Renewable. The 99p each are equivalent and you can get them on Amazon. Check out the links in the show notes for more information as well as a link to my regular Evie Musings newsletter and associated articles.

Now, I know you're probably driving or walking or jogging right now as you listen, but if you can remember and you enjoyed this episode, drop me a review in iTunes, please. It really helps me out. If you've reached this part of the podcast and are still listening, thank you.

Why not let me know you've got to this point by tweeting me at MusingsEvie with the words Nectar Points. Hashtag if you know, you know. Nothing else.

Thanks as always to my co-founder Simon. You know he's looking to move house again? Seems his latest move was to the wrong place.

Should have tried somewhere a little more central to account for his day trips with the electric unicycle.

Patrick :There was a number of considerations. Number one is we spent quite a bit of time traveling the UK.

Gary: Thanks for listening. Bye