Why NGP ETP Invested in EV Realty

In August 2022, NGP ETP led a $28 million seed investment in EV Realty, an EV infrastructure development platform building the grid-advantaged charging depots needed to accelerate the electrification of commercial fleets

Significant investment in commercial electric vehicle (“EV”) charging infrastructure is needed this decade
Over three million light- and medium-duty commercial EVs are expected to be on U.S. roads by 2030,[1] driven by total cost of ownership advantages versus internal combustion vehicles, increasing model availability, corporate commitments to reduce fleet emissions, and rapidly expanding state and federal regulations. To enable the expected growth of commercial EVs, the U.S. will need at least a 40-fold increase in commercial charging capacity by 2030.[2] An infrastructure buildout of this scale will require multiple solutions, including onsite private charging, shared depot charging, and on-route public fast charging. However, several important factors – power constraints, parking constraints, and the fact that many fleet operators don’t own their warehouses or vehicles – combine to make it extremely likely that well-situated, grid-advantaged shared charging depots will have a significant role in the commercial charging market.

Scaled access to power will determine the effectiveness of fleet charging solutions
As commercial fleets electrify, scaled access to power will be an increasingly scarce determinant of the feasibility, cost, and convenience of fleet charging solutions, especially in urban and suburban logistics corridors where many fleet operators will be looking to charge downstream of a single substation. Individual fleets will often require somewhere between three and ten megawatts of charging capacity, with the range dependent on several factors including the size of the fleet, the class of vehicles, the fleet duty cycle, and the mix of charger types (i.e., Level 2 versus DC fast).

Several county-level case studies in California point to the following rules of thumb: roughly 10% of circuit segments currently have two megawatts of power capacity, and only 1% have five megawatts.[3] When you overlay real estate attributes (i.e., open lots) and location (i.e., proximity to fleet customers), actionable sites with significant power capacity get even scarcer. And we’ve hardly started to electrify fleets (or the economy more broadly).

EV Realty has a compelling grid-first approach to charging infrastructure development and an early-mover advantage
Driven by a deep understanding of these grid dynamics and the unique challenges facing fleet operators, EV Realty is developing shared charging depots with unique access to power and proximity to fleet customers. The combination of grid and locational advantages should yield lower upfront costs (by avoiding utility upgrades) and higher utilization, enabling lower charging costs for customers and attractive project-level economics for EV Realty. And by being an early-mover in the fleet charging market, EV Realty should be able to build a diversified portfolio of advantaged projects – a development strategy that has proven very profitable across prior renewable infrastructure asset classes.

EV Realty’s management team is uniquely qualified to build a leading EV infrastructure development platform 
EV Realty was founded in September 2021 by Patrick Sullivan, the former Head of Development at Clearway Energy, Sean Kiernan, the former Chief Development Officer at 8Minute Solar, and Wyatt Toolson, the former Vice President of Project Finance at First Solar. EV Realty’s founding team has collectively built nearly nine gigawatts of renewable energy projects across the U.S. in the last 15 years, and their track record of creating value and managing risk while developing renewable infrastructure is a clear competitive advantage for EV Realty.

To complement the skillsets of the founding team, EV Realty recently added three key executives to its leadership team: Jim Ludovico, a former executive at Element Fleet Management, Suncheth Bhat, the former Director of Clean Energy Transportation at PG&E, and Shana Patadia, the former Director of Emerging Technologies & Business Development at ChargePoint.

When we invest in an earlier-stage business at NGP ETP, it’s driven by conviction in management, or more specifically, our perception of a team’s unique ability to execute its strategy.  The EV Realty team is exceptional, and we believe they’re well positioned to build a leading EV infrastructure development platform.

We are proud to partner with EV Realty
We’re excited to support the EV Realty team as they develop much-needed commercial charging infrastructure, and we hope to meaningfully scale our investment over time.

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Learn more about EV Realty: www.evrealtyus.com

About NGP ETP
NGP ETP focuses on investments that are part of the global transition toward a lower carbon economy.  NGP ETP partners with top tier management teams and invests growth equity in companies that drive or enable the growth of renewable energy, the electrification of our economy, or the efficient use of energy.  Founded in 2005, NGP ETP is one of the most experienced energy transition investors in the industry.

For additional information, visit www.ngpenergycapital.com/energy-transition or contact the NGP ETP energy transition team at inquiries@ngptrs.com.

[1] McKinsey: “Building the EV Charging Infrastructure America Needs” (April 2022)

[2] Cowen & Co: “EV Charging: Updating Macro View; NT Challenges but Outsized Growth Ahead” (June 2022)

[3] Analysis by Energy Strategies, LLC, an energy consulting firm.