Message from the CEO
To our certificate holders,
Fastned passed several milestones in 2019: our network surpassed one hundred stations, for the first time in our history we sold more than 1 million kWh in a single month and the operational EBITDA of our network turned positive. As a result of many new electric vehicles on the road, the last quarter of 2019 showed a utilisation of our network of 9.9%, roughly tenfold of that of 48 months ago.
What the coronavirus will (not) change
Our achievements of 2019 are overshadowed by the recent outbreak of the Coronavirus. An event of which the outcome and impact is largely unknown and that asks the utmost from our governments, healthcare systems and society. Fastned will not be exempt from the consequences of the Corona crisis. People drive less and as a result our charging stations are visited less frequently. We expect that this will continue for at least several months this year. We also expect delays in the construction of stations and the upgrading of existing ones. We postponed the construction of several new stations to increase our cash buffer. As events progress we can either decide to revert funds back again to (some) of the planned capital expenditures or continue to extend our runway.
What do we know for sure about the longer term? It is obvious that the need to stop burning fossil fuels and electrification of transport remains as urgent as ever to combat climate change. Governments react to the crisis with unprecedented economic measures. These stimulus packages could very well support the energy transition. New electric cars will hit the road: assembly lines for electric vehicles have been built and battery supplies have been secured. Some electric vehicles will be delayed, but eventually they will arrive. The transition to electric mobility will not suddenly come to a halt. Our market will continue to grow.
The value in doing the difficult thing
In 2011, the founders of Fastned, Bart Lubbers and me, were involved with Epyon, a Dutch startup in charging technology. Seeing charging systems being delivered to test tracks in the arctic circle and at R&D centers of many large automakers gave us a unique insight; most of them were on the path of mass produced electric vehicles. At the same time, Tesla was gaining traction with the Roadster and released their blog The Secret Tesla Motors Master Plan, plotting their path to the mass market Model 3 and governments around the world started to implement tougher emission standards. Adding this all up, Bart and I realised that electric vehicles would go mainstream sooner rather than later and that this insight provided a window of opportunity to create something valuable for electric drivers, our environment and investors. This became possible via the acquisition of 201 strategic locations along Dutch motorways in 2012.
Good visible locations situated next to high traffic roads with ample space to realise large charging stations where hundreds of customers per day can charge their car are scarce. We soon found out that there’s no shortcut in acquiring locations that check all these boxes! Surmounting lengthy development procedures, permits applications and design discussions would have to become a core expertise. Based on these premises Fastned was founded in 2012. The majority of accumulated losses over the period since Fastned was founded should also be seen in this light and are investments made in the acquisition and development of a very valuable pipeline of locations.
Along the way we discovered there’s another difficult barrier to overcome. Financing infrastructure for which there is not yet a (guaranteed) market turned out to be incredibly difficult. We found out that our plan resonated with a lot of private investors. They wanted to invest in Fastned to make fast charging infrastructure a reality. The result is that by now we’ve raised more than eighty million euro. This early stage funding allowed us to build the company and create a network.
Controlling our own destiny
We choose to invest time in developing our own locations. We sign long term leases (15 years or more) with landowners and governments to build a charging station and sell electricity to electric cars. Because we start with a greenfield situation and because Fastned invests in the station we are able to negotiate a relatively low rent often including a small variable component. Often these locations have a restaurant or petrol station nearby providing much valued amenities to electric drivers.
Fastned builds charging stations next to restaurants and petrol stations. This approach differs from other initiatives that place chargers at parking places of others. We choose not to do this because we prefer not to be a supplier of chargers to businesses like petrol stations. We feel more at home with landowners that have an interest in speeding up the adoption of the electric car (or at least don’t want to slow down the transition). More importantly, in this way we create our own valuable sites instead of creating goodwill for others and run the risk of getting in a supplier squeeze.
Having our own locations also means we have full control over our sales price. We can adapt to the market and for example the development of the electricity price or the utilisation of a station. Furthermore, we decide which payment methods we accept and under which conditions.
We work for a purpose
I started Fastned with a clear goal in mind: building a large fast charging network that would provide freedom to electric cars, thus accelerating the transition to electric mobility. Over the years many people that shared this goal joined our team. Today the Fastned team consists of people with many different backgrounds, education and age, but they all want to make a practical contribution to solving climate change. The result is that our team is highly motivated and in most cases people already know what to do.
At Fastned the team is well aware that we need to be lean and watch our expenses. Spending less means we can build more stations. This also translates into our compensation package where we continue to include stock options on top of a modest salary. We know our success will largely be affected by our ability to attract and retain very talented and motivated people and therefore we want all our team members to think and feel like owners of the company and through stock options share in the succes they create.
Our team members - both from their own experience and through picking up the phone at our call center - thoroughly understand the feeling of electric drivers when they stand in the cold with a whining toddler at a malfunctioning charging station. It is no accident that Fastned was the first charging network to report an uptime of over 99.9% in 2015 and has remained there ever since. Because Fastned employees have been driving electric cars from day one, we understood early on that flawless communication between the car and the chargers is crucial to the customer experience. People expect charging to simply work. Among everyone that works at Fastned there’s a common will to support people to go electric and build a valuable charging business while doing this.
Our mission and a team of talented people enable the organisation to steer based on synchronisation and context instead of enforcing process and control. This culture gives freedom to pursue creative ideas as solutions for challenges that appear impossible to overcome. This in turn grows our people in terms of creativity, judgement, and business skills. Without this entrepreneurial culture Fastned would have never acquired concessions in Switzerland nor would Autocharge have seen the light of day.
Charging is a business and Fastned is in a unique position
One of the most important things that we did this year was prove that charging is a viable business. In 2019 our network started to generate positive operational EBITDA. This happened with less than 1% of cars in our markets being electric and a network utilisation of under 10%. Given that Fastned is in a fixed cost business, just imagine what will happen when 10% of cars are electric as is the case in Norway today. Or 50%...
We are just getting started.
31 March 2020