As sectors develop and mature, they frequently consolidate, resulting in a fewer number of dominant enterprises. This occurs as it gets more challenging for new businesses to enter the sector due to the high entry barriers. The already-established businesses can then increase their efficiency and profitability by utilizing their economies of scale. This stage could eventually come to an end if a new business model or technology overturns it (disruption). This cycle can frequently be repeated, although interruption may alter the size of the industry as a whole.
The rise of electric vehicles (EVs) has undoubtedly been a disruptive factor in the automotive sector, opening the door for new players to enter the market after Tesla painfully (for both the company and the industry at large) smashed down entry barriers. Not all new players will be successful, and we have already witnessed a number of new players come and leave, but any successful newcomers in an industry that went nearly 100 years without new players is a sign of change and upheaval.
However, emerging industries will eventually cease to be fresh and begin to mature and consolidate. In order to get a foot in the door before it closes, you’ll also see established companies from other industries buy their way into the disrupted business. According to a recent news release I found, the EV industry may be experiencing this.
By acquiring Voltrek, LLC, Orion Energy Systems, Inc. (Orion Lighting) entered the electric vehicle (EV) charging station industry today. Voltrek generated $4.8 million in income in 2021, mostly from jobs in New England. This is a logical progression for Orion Lights as a provider of electrical installation and maintenance services as well as energy-efficient LED lighting.
Voltrek acts as a value-added reseller for top Electric Vehicle Supply Equipment and providers, providing EV charging solutions and support to commercial organizations. They provide complete turnkey systems that include services for planning, installation, maintenance, and management. According to the business, it will carry on business as usual with its current staff but under the new Orion brand.
Orion identified a number of value drivers that encouraged the purchase choice, including:
3,500 charging ports are being managed, and that number is rising. Top-tier value-added reseller (VAR) Voltrek has an industry-leading service approach and is ranked nationwide. Lead installer for the National Grid Utility Make-Ready Program Installing the Eversource Utility Make-Ready Program Orion has established a presence in the quickly growing market for EV charging infrastructure by purchasing this business. BloombergNEF forecasts that demand for EV charging infrastructure will expand significantly as the number of passenger EVs sold globally rises from 6.6 million units in 2021 to an anticipated 20.6 million units by 2025 (or around 23% of all new vehicle sales worldwide).
Over the next five years, $5 billion in state and federal programs will fund the expansion of EV charging infrastructure while encouraging consumer adoption of electric vehicles (EVs). Funding for these initiatives will come from the National Electric Vehicle Infrastructure (NEVI) Formula Program, which was created by the Bipartisan Infrastructure Law.
As they immediately address a rising need voiced by our customers and match well with our core areas of expertise, Voltrek’s turnkey EV charging solutions are a great fit for Orion’s national accounts and our partner network, according to Orion COO Mike Jenkins. “Charging stations are a crucial component of a high-quality shopping experience and a useful amenity for both staff and customers. We believe Voltrek positions Orion at the vanguard of this opportunity since we see significant cross-selling potential between our LED lighting, electrical maintenance solutions, and EV charging.
“As a top-ranked ChargePoint EV charging station VAR and service provider, Voltrek is uniquely positioned to leverage our expertise in facilitating the conversion to electric mobility,” said Kathleen Connors, an established leader in the EV charging industry who will continue to serve as the company’s president. We anticipate that the expanded assistance provided by Orion’s wide network of partners, financial resources, and expanding Maintenance Service Group will support our continued expansion.
MORALITY IS REQUIRED Strong for good reasons, the disruptor cult is popular today. The line between stability, maturity, and stagnation is thin. To keep the gravy train rolling down the track, dominant players may become so stable and regimented in an industry that they inhibit innovation. As a result, the disruptor now has a chance to enter the scene and restart innovation and movement.
However, the disruptor cannot rule indefinitely, at least not while causing disruption. Innovative concepts do need a chance to succeed, and much like with seeds, nothing grows in the garden when they are repeatedly washed away. If a new or disrupted industry wishes to give the new concepts and methods a chance to prosper, it must gradually settle into a new pattern of behavior.
Therefore, don’t take it to mean anything negative when I mention that the EV business is showing indications of stabilizing and maturing. If everyone in the sector is constantly on the verge of failing and a constant stream of “heroes” must continuously fixing things, EVs cannot succeed. That could make for a fascinating tale to tell, but a tale with that kind of a premise can’t have a happy ending.
We can see that EVs are becoming commonplace and are even turning into a wise investment by witnessing an established company that caters to the lighting and electrical needs of commercial customers acquire a more recent company that provides EV charging stations and installation. There is no longer any doubt about the fact that the number of EVs on the road will significantly increase. Now, the only remaining question is who will benefit financially from this development and who will lose economically.
There will be fewer startups that create something substantial from virtually nothing, but there will be more prosperous businesses that cater to the EV market, even if there aren’t tremendous returns to be had from investing in them. In contrast to our constant demand for novelty and disruption, this is what we actually need to happen.
Image in the center is by Jennifer Sensiba.
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