The electric vehicle market has been a hot topic in Australia in the last week, with Labor proposing to introduce a national electric vehicle policy should the party win this year’s impending federal election.
One small cap player looking set to benefit from this proposed initiative and the growing global market is Rectifier Technologies (ASX: RFT), currently the only electric vehicle supply equipment (EVSE) distributor and component manufacturer listed on the ASX.
The power electronics company specialises in the design and manufacture of switched-mode power converters and in November, it announced its latest research and development project: a high-efficiency bi-directional power conversion platform.
This technology essentially means an electric vehicle could not only charge its battery from the power grid but could also send power back to the grid.
Rectifier sales and marketing director Nicholas Yeoh told Small Caps that while the company believes this vehicle-to-grid technology is the way forward for the electric vehicle market, the public could still take “quite a bit of convincing”.
This is where a national initiative to encourage the conversion to electric vehicles might assist.
Earlier this month, Australia’s federal Labor party announced an ambitious election pledge to bring the country up to speed with the rest of the world in terms of electric vehicles.
The party wants 50% of all new cars sold in Australia to be electric by 2030 and plans to introduce a carbon emissions target for new cars.
It is also proposing to make 50% of cars in government fleets electric by 2025, as well as offer an upfront 20% depreciation deduction to businesses for private fleet electric vehicles over the $20,000 price tag.
Mr Yeoh said if the initiative was to go ahead, it would “definitely help” suppliers of EV chargers in Australia.
At the end of last year, Rectifier was officially named a preferred supplier for Queensland-based fast charging supplier Tritium, with a contract to exclusively supply and sell 35kW high-voltage and high-efficiency modular power supply units for high power DC electric vehicle chargers for at least one year with options to extend.
”For companies like us who supply power electronics to the EV charger market, our supply will likely increase as a result. Our 11KW EV DC Charger will also have a good chance at taking off in Australia, if this goes ahead,” he added.
Meanwhile, the Coalition has been critical of Labor’s stance – naturally – with Prime Minister Scott Morrison claiming Labor’s policy would mean the “end of the weekend” and Australians’ love of cars “with a bit of grunt”.
Mr Yeoh said the public still needed “quite a bit of convincing” and Australians might be anxious about converting to electric powered transport primarily due to the lack of current infrastructure in the country.
“People are used to having petrol stations available at every corner – I have friends who get anxious when their tank gets down to half and want to fill up,” he said.
Mr Yeoh said people’s mindset would need to change since running normal gasoline cars was different to running an electric vehicle, where you would charge your car when you can, like with your mobile phone sometimes.
“Whenever you get an opportunity to park at a location that has a charger, you charge your car. Most of the time you would unlikely charge your EV when you’ve only got 10% left in the tank,” he said.
“I think, right now, people still struggle with range anxiety, worried they might get stuck in the middle of nowhere and can’t find a charger,” Mr Yeoh added.
However, he said if charging infrastructure is more available, this would “naturally encourage users to convert from the combustion engine type vehicles to full electric vehicles”.
Charging stations in Europe
Mr Yeoh said from a local standpoint, a national initiative would be very encouraging for Rectifier “as an Australian vested company because most of deployment of fast EV chargers are outside of Australia”.
This is certainly the case for Rectifier’s client Tritium, which currently holds about 50% of the Norwegian market and about 15% of the wider European market for 50kW fast chargers.
The company is also currently supplying its Veefil-PK 350 high-power charging systems for electric vehicle charging sites at rest stops around Europe.
Under a deal signed last July with Ionity, a joint venture comprised of automotive manufacturers including BMW, Volkswagon and Ford, Tritium is supplying its units for the construction of 100 charging sites across Germany, France, Norway, Sweden and the United Kingdom, with each site having an average of six user units.
This 100-site contract is part of Ionity’s planned rollout of about 400 electric vehicle charging sites at service stations along European highways.
With 350 referring to the unit’s 350kW size and Rectifier being the preferred supplier of 35kW power supply units to Tritium, it can be presumed that 10 of these units are used to make up the one Veefil-PK 350 system.
A rough calculation estimates the need for about 600 Veefil-PK 350 systems, so about 6,000 of Rectifier’s units. However, this hasn’t been confirmed by the companies and remains speculation.
New product development
Late last year, Rectifier said it anticipated the first research and development prototype of its bi-directional platform would be integrated into its electric vehicle home charger by the end of the 2019 second quarter and could be in full production by the end of the year.
Mr Yeoh said this was still the target and the company was actively identifying partners to provide its hardware for trials of this vehicle-to-grid technology.
“For these trials to work, they need to have bi-directional charging hardware to be able to test with the pilot infrastructure. We got to be ready,” he said.