Blink Charging Co. (BLNK) Earnings Call Transcript & Summary

Great. Good morning, everybody. We're ready to kick off our next session. Itay Michaeli, Citi's Auto and Mobility Analyst. And very pleased to have for the first time with us at the conference, Blink Charging as we get into the topic of EV charging today. Very pleased to have Brendan Jones, the President of the company. We also have a CFO and IR with us here as well. So we'll do a different format than we've done thus far in the conference. We want to go through a presentation for those who might be newer to the company, and then we'll get into some questions as well. If you do have a question, about the session, just raise your hand. We'll get a mic over to you, and we're looking forward to the session. So Brendan, thanks again for being here. Now I'll turn it over to you.

All right. Well, thanks, everybody. So I'm Brendan Jones, I'm the President of Blink Charging. I've been in the charging and EV on the vehicle side space for kind of -- it has been a long time now since 2008. Starting with Nissan North America when they introduced the LEAF and then have worked for several different EV infrastructure companies. I was the COO of Electrify America, and then I came to take over Blink Charging about 3 years ago today. So a little bit about Blink is what the presentation is about. I'll pause for a minute so everybody can see the safe harbor statement. I will not read it. But we have it in here just in case and if you need a copy, the presentation is available. So about Blink. So we're a different type of charging company. And so when we look at it from an investor's perspective, we usually have to define who we are and differentiate ourselves from the other companies out there. So we focus on a couple of different business models. First is the Host Owned model. And that's where we sell charging services and equipment out to site hosts across the United States, in Europe, in South America, now moving in the APAC's region, in Israel, in Greece and other regions throughout the country. And that's basically a product sales with a little bit of recurring revenue off network services fees and maintenance contracts. Then we do Blink as a service. And what Blink as a service is, is it to any site host in the United States, a wrap package, where instead of financing upfront, everything is covered in a monthly fee. We get paid on a monthly basis. And after 5 years, the assets revert back to Blink, but the site host get some in terms of their customers, et cetera, then the hybrid model. And that's where we partner with different site hosts throughout the United States, and they pay for the installation, we pay for the charger and service and we split the revenue on the kilowatt sales, 60-40 in Blink's favor, then the Blink-owned. Blink-owned is where we analyze site host on a utilization basis across the United States and in Europe, see how high we can predict that utilization is going to be on a kilowatt sales basis. And then we devote our capital to installing, owning and operating those chargers. Right now in the current environment, we're operating about an 80-20 split on product sales model versus the owner-operator model, but we are constantly seeing an increase in the revenue from utilization on the owner-operator model as we move forward. When we're looking at where we're at, I said globally, you saw that Global Networks were in 6 languages, 19 currencies in 25 countries. And that's a massive expansion from where the company was 3 years ago. So we've really expanded and taking advantage of the growth in the industry. When I started, we had less than 40 employees, we're up to 625 today, and we continue to expand into new countries and new environments. A little bit about the team. I'll just point out that the team is a seasoned staff, having had some experience working at other EV infrastructure companies and other OEMs, VW and Nissan North America. We really got a talented staff here on it. It's a diverse staff. The staff spans the United States and Europe and Israel with a variety of experiences, even staff that formally work for some of our competitors as their founder and operators, such as Harjinder, our CTO. We would like to say, we have one of the most experienced and dedicated staff in the industry today, and this staff is and team is one that's fueled our growth. So now about the industry. So this is why we are very optimistic about what is going on out there today. If we look at forecasted global passenger to the EV fleet, so we're talking $100 million, is what we're talking about as we roll all the way up to 2040. That's an awful lot of vehicles on a TIV basis when you look at it. And when you look at other states that are now California, New York, Massachusetts, others to come, then many of the countries in Europe, banning internal combustion engines. And we look at it, and we always see when some of these milestones are put out there, and we have this sort of think, okay, well, yes, that's going to come out there, things will change. Well, they said EVs wouldn't catch on in 2010, and they said it again and again and again. Now in California, EV penetration is hitting 20% vehicles sold on a monthly basis in California. We're seeing European countries getting up to 50%. Now we're seeing shifts in other states. So this goal is going to happen sooner than we think and certain European countries, 2030, no internal combustions, all EV sales. This trend is happening. It's going to continue to happen despite government intervention to help. It's going to continue to go forward. Then when you cross supply, what does it mean for chargers? You can see 490 million chargers are needed between now and 2040, 490 million. So that's the opportunity that we're going to pursue and continue to pursue. So the market is big and the market is growing. And we're just showing right here, global passenger side. We're not showing any of the other opportunities that are coming the charging way. So the market is going to expand and the type of charging is going to expand. So here are some things on Blink chargers. About 3 years ago, we had 2 products. These are all the products that we have today. So the company has grown dramatically. And the interesting thing about a multiplicity of these charges are now going to be exclusively manufactured by Blink in Blink's manufacturing facility in the U.S. and India and other locations across the globe. So we've shifted the company to be able to build these new designs and these new products, and we continue to innovate as we move forward. One of the interesting things I'll point out the 50-kilowatt wall box on the end. When I started in the industry, a 50-kilowatt charger was $60,000. That's how much it costs. I'm not going to tell you what we can pay for that, but I will tell you we can retail it between 10 and 14, depending on the country we're selling it in. That's a dramatic shift, and it is 1/4 the weight, I can pick that up and hang it on a wall, Innovation is happening in the space. They're getting lighter, faster, better and easier to maintain. So we're going to take advantage of that efficiency curve. When we are in Vegas at CES earlier this year, so we unveiled some attractive designs. One of the innovative products is a wall mount to 30-kilowatt charger. This is very small, primarily for dealers and other areas that need a little bit of a faster charge than an AC charge, and you can hang a DC on the wall, cheap, easy to install, easy to maintain charging. The other one was a point-of-sale one. This is an advertising charger. This is a brand-new unit that we'll have ready for sale soon. And this allows you to create revenue -- sustainable revenue on the charger both from advertising sales and from kilowatt sales combined together, on that. A lot of site hosts are interested in that product. Newly launched 100-kilowatt DC fast charger. This is our final design on this. This is going into production and final design this year. Innovative, again, we hit the Indian market, which is uniquely different than our market. In the Indian market, you're going to see a dominance of 2- and 3-wheel EVs that are now hitting the market there. We put a charger out in the market to be able to serve those at an inexpensive price. It is easier for Blink because we have 2 well-established facilities in Bangalore and another one outside of Delhi that can market and sell this charger easily. We manufacture it out of our facility outside of Bangalore. In Europe, we're using a brand-new EQ 200 charger, that's built for us on contract manufacturing out of Poland. That one is a universal charger, and what does allow us to do is see the variety of site host needs throughout the European continent for some have higher technology on it, such as full service on mobile application connected to the network, et cetera, all always down to very low maintenance, simple charger that can be installed. We are already sold out of that model in Europe right now, and we're looking to increase production on that. And the other thing for the European continent was our PQ 15, and that's just an international smart cable. So that's a drop in the trunk charger that can go and can plug in. As many of you know, in Europe, it's a little different. They already have 240 as the standard. In the U.S., we have 110 as the standard, and you have to upgrade to 240. So that allows them to plug in anywhere there's a plug throughout the continent. So if we look at our history. So our history is of a very inquisitive company, dating all the way back to its origins. So it is a combination of a multiplicity of companies, but we'll focus really on where we've been the last couple of years. So we started in 2020, and we acquired BlueLA. And also in 2020, we acquired U-Go, a small DC fast charging company. Then we did Blue Corner in Belgium. And then we moved on to do the big acquisition of SemaConnect in the United States and then another asset in England which is called Electric Blue. We have a little bit of a fascination there with the name blue. Don't hold that against us. We bought 3 blue companies, it just happened by happenstance. When you look at us now as a combined company in the United States, we're either ranked third, in terms of size and chargers deployed. And in the world we're right up there in the top rankings in terms of size as well. So one of the big tasks that we have with this is how do we bring it all together. So right now, the company has been on for the last 6 months, a massive synergy exercise to bring all of our entities under one network, one system, one back office, one sales force entity as well. We're happy to tell all analysts that will be completed with that exercise in the summer this year, and we'll have big announcements as we're moving forward with those synergies with those companies have netted us out as we continue to grow revenue and then cut expenses simultaneously. These are just a couple of pictures of some of the manufacturing and warehousing. The bottom picture there shows chargers that are being bench tested for quality out of our Phoenix facility. And then we have some other chargers here that are out of the Bowie facility as well. One of the unique things to think about with Blink in our total models is we don't throw anything out. On the owner-operator model, if we have a charger out in the field, we roll a truck, we pop the charger off, we pop a new one on, and we just send it back to one of our facilities, it's refurbished checked, and then it goes back in circulation on the owner-operator model. It's efficient. We don't spend dollars servicing chargers in the field on the L2 model. We just pop them, replace it, recycle, get it back out there. It's a very efficient model and proving very cost-effective as we move forward. So for the commitment to manufacturing, so we have 2 different facilities in the U.S. We have one that primarily imports and bench test chargers, and we have won that actually manufactures the charger. In the Bowie, Maryland facility, it's all manufacturing. So it basically takes parts that are produced out of our Indian facility, manufacturers chargers in the United States with U.S. labor and those charges are then compliant for Buy America regulations that are coming out of the NEVI program and other state and municipal programs that are required in the Buy America element. Now we're also moving to build a DC fast charger facility in the U.S. It will produce at a minimum, about 10,000 DC fast chargers, all of those will be NEVI compliant. And as some of you might know, they just came out with the rules regarding the $7.5 billion that the Biden administration is put out there. One of those rules is that, right now, you have to have all of the steel in the outer casing of the charger and then the internal elements of the charger has to be U.S. made from [indiscernible] And then in 2024 July, 55% of the overall charger needs to be in the United States to get that funding in to qualify. Blink is well on its way to meeting that, meeting those deadlines and we'll be able to participate in the NEVI funding, and we'll pursue it aggressively as we move forward. So last slide here. And this slide kind of looks at the competition and sees how we match up, because we're different, because we're fully vertically integrated, because Blink Charging is out there, it's sells chargers, it owns and operates chargers. It manufactures chargers, it network chargers, it maintains chargers. We're distinct in the industry. And so you look across these buttons, in-house design, we have it manufacturing, we have it network, owned and operate we've got, manage infrastructure, we've got charging services, we've got and fully integrated fleet solution all across the board. And this is an honest census of all of our competitors. So we really stand out in the industry. And the great thing is, we're going to take advantage of today's sales revenue, while simultaneously banking on sustainable revenue for the future on the owner-operator model and the sale of kilowatts. If we look at what the data tells us today and we have data coming in from McKinsey. We have data coming in from Bloomberg and other sources. It is estimated that 90% of all kilowatts dispensed are going to come through L2 chargers. And why that's important on an investment perspective is the cost of capital to put those charges in the ground and the amount of capital needed is drastically reduced for DC fast charging. So while we're going to do DC fast charging, we'll take all the grant money that they want to give us to install them, we're also banking on the L2 model is going to dominate globally at 90% of all kilowatts dispensed, and we're going to get our lion's share of those kilowatts on the own and operate model, and we're doing great on the product sales as well. So with that, that's the conclusion of the presentation. We'll sit down and hit me with a bunch of questions.

Awesome. Terrific. Thank you so much, Brendan. Great presentation, great overview. And again, if you have a question, we'll hand over the mic over to you. Maybe I'll just kick off with where you just ended on the level to 90% share. Some other companies I think are sort of moving much more towards DC and kind of ultrafast charger. Maybe talk a little bit more about you're kind of -- in some of the third-party work that's been done that supports the L2 view?

Yes. So I mean, first, we believe in DC fast charging and we're going to participate in it. And through my background and our team's background, we've done a lot of DC fast charging in the past, probably somewhere over 3,000 installations in total of DC fast charging. So we understand it and we understand the economics of it, and we'll do it. But it's clear from the data that you're going to generate a lot more revenue from a lot more chargers if you have a large portfolio of L2 charging. And you have to dominate where those models are. And L2 takes advantage of everything an hour plus, right? You can do it. There's a lot of instances where you can do it under an hour, but doctors offices, grocery stores, anywhere with dwell time is high. If you cross-apply that on the statistic of on passenger cars, which we're primarily focused on, in this presentation here, they sit for 95% of the time according to DOT. And I recently had a meeting with DOT, the White House transition office that's handling all of the NEVI dollars. And they said, that's the biggest stat in the world. 95% of these vehicles sit. So when you look at this capital needed for L2 versus this capital needed for DC fast chargers, anywhere from 15:1 is the ratio, depending on the type of DC charger that's being installed, we need to exploit L2. That is the economic way for this country to get more charges out there for more people to plug in. Still doing DC fast charger because DC fast charging has 2-phased effect, right? One is the psychological impact of building range confidence. You see a charger, you believe, okay, I'm going to buy an EV because I saw these charging stations. But then it has the practical application of where drivers really charge. And when we look at the charging data, you're finding home, workplace, multifamily dwelling garage, city garage much higher than DC fast charging.

Got it. Absolutely. You mentioned, NEVI, I do want to talk about the IRA and NEVI just maybe an overview for those who are new or a lot of developments are lately about how you expect that all benefit Blink.

Which one was that?

The Inflation Reduction Act and NEVI.

Yes. So if you look at the Inflation Reduction Act, the good thing is it's going to increase vehicle sales, right? So what we look at this is perfect storm of these 2 combined pieces of legislation that have been out and are now putting into action. You've got the $7.5 billion under the infrastructure bill, and then you've got the Inflation Reduction Act simultaneously. So what the good news about the Inflation Reduction Act, they've just made some adjustments, added more cars that didn't previously qualifying it, which was great news from Tesla and some other providers. The overall news for the industries is that is going to, again, increase vehicle adoption, make EVs more affordable. And what do you think about and is putting my OEM hat back on a little bit, I'm thinking about when I manage model lines, right? They're attempting with this to hit the sweet spot of that transaction price. And if you can get more EVs in the sweet spot of the transaction price, you have more availability for your average users. I mean still in the states outside of California, we have this big adoption opportunity. And if we can get on price and get it on the infrastructure and Inflation Reduction Act is handing price and accessibility, widening dollars for the infrastructure handing charging visible in the field, you really got a perfect storm here. So we're encouraged on them both, but we will take advantage of them in combination. So we support them all. We are working hand in hand with the administration. We have a call with them at least once a week. And they keep evolving. I will credit them on this. They're in listening mode, and we changed some of the aspects the industry did on the rules associated with the $7.5 billion. And the industry also changed some of the rules associated with the Inflation Reduction Act by [indiscernible] and education. So while nothing is perfect in a bureaucratic environment, they are listening, and we've seen changes. And it's one of the first times you've seen kind of a whole scale change on this in terms of the rules and implementation because it's important to get it right.

You offered a great point, and I'd love to ask you more about your thoughts of how EV adoption is progressing in the U.S., I think we're north of 5% for new vehicle sales last year. But it still seems like there's a heavy concentration in the top few states in California is obviously a 35% of that. As you work to build a network and think about your capacity, how are you thinking about that? On one hand, people say, look, the reason we haven't disbursed more regionally for EVs is because of the lack of charging infrastructure. Others might say, maybe it's more demand, just curious your thoughts on how you're seeing the market develop and the role that you play and kind of help you to drive that adoption?

There has to be a balance in what we're seeing, and we're doing a lot of lobbying work and legislative work with the other states. And there's an awareness increase slowly, right? So California is always a leading edge on these type of things. But now as the vehicles have become more attractive. And the versatility of the vehicles is become obvious. I mean, who -- when I started, I used to laugh because I get all these phone calls in and somehow when we launched a Nissan LEAF, they had my e-mail. So my e-mail box was all the crazy comments. So yes, well, I can't haul wood with a Nissan LEAF, so why would ever buy it. Well, it's a subcompact call. Our people really don't know haul wood with it. And you get all these crazy questions like that and you're like, it's a subcompact, it's a commuter car, come on. Now you look at the space, there's 4 pickup trucks on the market. I just drove again the Ford Lightning just recently. It's just -- it's an awesome truck. I mean it's all F-150, it's all track. So we're seeing this curve start to extend and awareness extend to other states, and then you go back to the education piece because you got to go back and it's rinse, repeat. You got to go back, you got to inform, you got to talk to them, you got to talk to them about smart infrastructure. So a lot of times, we're going back in and repeating messages that we have over the last 10 years, getting them back in there and helping them plan and they're starting to listen now. And you're seeing states that had no interest in EV or infrastructure now. Now certainly, you can look back to the Biden administration dollars, it's forcing them to because now they're getting this on the $500 billion part of it -- $5 billion, excuse me, I wish it was $500 billion. The states are forced. They get an allocation, they get a cut of that. They have to design these RFPs. In designing these RFPs, are reaching out to Blink and other companies and consultants on how do we do it right. So this is forcing a level of education and involvement at the state level. And then simultaneously, those states are going, okay, well, it's not enough. If EV adoption is going to be this. So I mean what do you do? If California heading towards 20, right, now is at 40 and you're in all those border states. Well, you've got to structurally adjust or you can't service those vehicles. So this effect is going to happen across the United States. Some states are going to be slower. Some states are going to be early adopters, but we're much further along than we had before.

Terrific. Question?

Could you talk a little bit about the unit economics of the business and that -- how do we think about the host sort of the utilization rate? And I think it's sort of cart before the horse, chargers out there and sort of prime the pump. But could you talk a little bit about the host economics when you're selling into the units? And then how does that differ from utilization rates, whether it's a host owned versus the Blink-owned business model?

Yes. Sure. So the -- if we look at on a pure sales model, so it's up to the host, right? Our job there is to provide them an equipment and where needed service equipment under warranty and provide consistent network services, utilization data of the charger. The site host, if they ask us for information at the onset of the contract, what do you think utilization will be, we can inform them. We can even inform them on what pricing should be because they can set their own price on those charging. That changes dramatically when we go to the hybrid and the owner-operator model. On the owner-operator model, before we even install, we have a system and an algorithm, [ RTAS ] combined with other data, site host data, DOT data and everything that analyzes that site. The methodology looks at previous EV penetration, previous hybrid penetration policy within the states and does an estimated forecast on what utilization will be at that specific location. Then we make a determination if they want the hybrid, does it fit. I mean if they want the turnkey, does it fit, does that site host fit our criteria to generate revenue? If it doesn't, then we look at hybrid because the hybrid, we have a better return on investment because they pay for the install. We pay for the charger and we can deal with a little less utilization. So we consult with them and tell them what model works and doesn't work. And we don't treat anything as boom, that's it. We will negotiate with any site host. We'll find out an economic model, we will be flexible. And the reason that's key is they have to make a determination of what's best works for them. And so we don't want to walk away and say, well, we can't help you. So if you look at a charge point on this, they'll walk away, right? The site host says, well, I want a hybrid, ChargePoint doesn't offer a hybrid. They want to own and operate, ChargePoint doesn't do that, right? So we'll say, what do you want? You want to buy it, you want us to partner, you want us to own and operate, which works best for you, and then we'll share utilization data and what the station economics are. Now when we look at the economics on both model, on a hybrid, if we hit 10% utilization, that's a payback in just over a year. And if it's a turnkey, it's a payback in under 18 to 24 months on that. So we already have those calculations, and we know that once we hit that milestone, then that investment is paying for itself. Then you cross apply that to our average contract. Our average contract is 7 plus 2. So with 2 renewals. That's 21 years on the owner-operator model. So by the time we hit the 7 years, we're way, way, way into making gravy and money on that. On a hybrid, the interesting thing is we started with hybrids at a 5-year with the 2 renewals bring into 15, but a lot of hybrids have gone to 7 now. So they're even at that 21 now. So really, that gives you this equation. And then the other thing that's interesting is you have additionality components. So what happens when you add a charger built into it at any of our site host contracts, and we're at the high majority of our contracts fit into this as an occasional one that does not. The minute we put in a new charger at that location, everything recalibrates and the starting points begins for all the chargers. So you get sustainability, right? And you get a contract that you can bet on that is going to return revenue to the company for the foreseeable future.

Perfect. Want to talk about hardware for a few minutes. Two questions there. First, how do you differentiate your hardware from the competition? And two, one of the issues that the industry is facing are kind of failed charging sessions and quality. A lot of talk about that as well. I'm curious on your positioning there and what you're doing as well as your thoughts on the industry more broadly around this issue?

Yes. So it's been tough for the whole industry. Every single company backslid on one of the crowd source versions of Score, which was PlugShare. Everybody went backwards on that. So we've been doing quite a bit of root-cause analysis on all our systems, seeing -- one of the variables that we didn't talk a lot about is you had a lot of charger fails that weren't actual failures. With Sprint, T-Mobile, AT&T and others shutting down the 2G and 3G network, you had a lot of chargers out there that were simply shut off. So you would go up to them with your mobile phone and all that and try and connect but you couldn't get a charge because the network was gone. And so the industry -- and this is all companies have been working over the summer and everything to make sure that they're replacing all that hardware or at least going into the units and upgrading them, an upgrade kit was bad. So that hit everybody, and that dropped the score dramatically. And it even increases awareness about quality in an unnatural way, right? So beyond that, we're working with the industry to make sure what type of quality are we talking about. And it's really interesting and dynamic. So the point of failure in most charging environments happens at the process, at the beginning there. So it's either if it has a credit card reader, it's there or at the initiation and a failure on the screen, the RFID card or the mobile app. And that's where we're putting more technological standards in to get all of that right. And a lot of it has to do with interoperability between chargers, interoperability between systems and all that. So there's been a lot of great meetings. Our CTO just went out to California and participated in a massive quality meeting. We're trying to extract it from the hyperbole that's out there and get it back down to the facts. One big thing is happening, which is a good thing for the industry. California came out of rule a couple of years ago, and it was supposed to go in effect in January and they pushed it into June of this year, that was you had to have a credit card reader, and not only just a credit card reader, but a Magstripe credit card reader. Well, #1 point of failure on a charger is a Magstripe credit card reader, by the way, just paying -- because they're old school, they haven't been prone to failure. They're outside, which increases the environmental impact in them. Well, now the governor is looking to rescind that rule. The industry is quite applauding that because that would have been another just massive failure that we had. So we're trying to take both a root cause analysis to improve product quality and network quality and also a positive policy move as an industry to do it. And the administration, I'm very politically neutral, but they've held some very productive meetings, I went to one in D.C. trying to get this. So Blink is listening. We're going to work with to have standards on network uptime, standards on charger uptime and then improve quality and connectivity across all chargers. So if it's somebody that is a ChargePoint user and they have a ChargePoint app, they can still go to somebody else's charger. And that's one of the frustrations when they say, well, it doesn't work. Well, it doesn't work because it wasn't made interoperable. So we're working on all those, and we'll get it down. I don't think you're ever going to have a situation where you're going to have 100% positivity, just like you don't with fueling stations today. I'm sure you've driven into a gas station. It's got a bag on it on one pump and then all the other pumps are active. You're still going to have down units. Their machines, DC fast charging is more susceptible to breakdowns and L2 charging. But we got to make it so that you don't ever have a stranded customer and failure to fuel is not a good thing. So the industry, Blink, we have to make sure we tackle this quality issue. And again, this goes back to this building range confidence so that when you have a driver out there, they know they can pull into a charger. They know they've got a charger that works if they're multifamily dwelling at their home, et cetera. So we're all in.

Perfect. I wanted to ask about the SemaConnect acquisition. Maybe just talk about that a little bit more. I guess let me clarify the type of chargers that they're producing and whether they also kind of qualify for the Buy American incentives?

Yes. So right now, we're 100% compliant on the standard as the new rules just exist out of all chargers coming out of our Bowie facility. So that's our 6, 7 and 8 series chargers on there. So if we're in a federal bid that requires it, we're 100% compliant today. And that's primarily on the metal and closure. We already resource that. Then if we look at that as it relates to the L2 chargers as a whole, the 55%. So we already put a lot of effort and money when we acquired SemaConnect into structurally adjusting the Bowie facility, then be able to make the 55% quality. this new rule that came out actually gave us more time to get it right. And we're actually now evaluating some supplier contracts, trying to get a better price and all that. So that we're done. We're going to meet that on a product level. So what you'll see is doing, and we've already started to do this, is we're blending the different portfolios together, right? So we won't have different units out of Bowie and different units out of our facility in Phoenix, which does most of our contract manufacturing chargers come in through there. We'll have all one. The SemaConnect with our factory in India that produces the base parts for all the assemblies will then produce a unified charger that services for all our needs globally and the United States. It will build the parts. In the U.S., if you read into the law, what's really interesting is you have to have the subsystems manufactured in the U.S. to meet this 55. And if you dig deeper into it, the 55 is going to go to 65 and then to 75. So you really have to start today with this advanced planning on how you're not going to just do the 50, but how are you going to 65 and the 75. And we've got all of that figured in right now. So we know we're going to hit the 55 no problem on L2. We'll be able to do the subsystem assemblies, which count towards the 55. And now we're replicating rinsing and repeating the same thing for the DC fast charger platform because that's all ours, and we're building that from the ground up. So we're covering both globally products and U.S., and we're controlling our own destiny on that topic.

Terrific. You mentioned, I think, one of the slides getting to about 100,000 a year in capacity and production, what's the timeframe for that? How much capital do you need to actually get there?

Yes. So it is -- as with any production Increase, it's staged. And the first stage is to ship Bowie production up from where it was when we acquired, which was about 12,000 max up to 20,000. I'm happy to say that we've already done that. And we're going to then go to a full second shift, which is going to up that even further. And then we're expanding the Bowie facility. We're adding square feet buildings in an adjacency to be able to then go from that last what we can get out of the second shift to new. We could do it on a third shift basis, but going back to the quality question, quality of third shift is a little difficult, and it's hard to get people to work third shift, and you get a little bit inconsistency in the product quality and on the management of that labor force. So we've elected not to go third and we're going to increase the square footage to get to that extra 50,000 in production. Then when we look at the new facility, the new facility is going to be dedicated to 10,000 DC fast chargers produced for the United States market. And if we can export, we will export those charges, and we have some strong possibilities there as well, but we haven't announced those plans yet. And then the remaining capacity out of there is L2. Now you got to imagine in a production environment, DC fast charging is line complex traditional manufacturing line with a lot of controls or the -- a lot of clean environments because of the complexity. L2 is a lot of table manufacturing, where it's not quite aligned as you would see in a traditional manufacturing. You don't have quite the clean room type of high-tech things when you're putting together the PCB boards and the other boards to go into the charging modules. They're greatly different. So less square footage for L2, double and triple square footage for DC fast charging and this new facility. We'll have the information on the facility selection. We had a meeting yesterday, we're down to 5 different markets with sites in each market. And we should have announce shortly on our final selection.

Terrific. Question?

Just maybe a quick question on where do you see, for instance, I mean, aspirationally, your mix in 2030, talking about own service, hybrid, et cetera? And then what would be the, I would say, average ROIC of the company in this context, talking, I don't know, about 10%, 30%, 50% utilization rate.

Okay. I missed part of the question. Could you repeat that?

So the mix, your mix in 2030 aspirationally, okay? And where would be the ROIC of the company depending on different assumptions on the utilization rate?

So what is our product mix?

Your aspirational mix in 2030.

Yes. So -- and is the product mix differentiated by type of charger or just L2 to DC? So just L2 to D.C? So we think our product mix is going to follow largely what the data is telling us, and we're going to plan to that. So somewhere 85% to 90% is going to be L2 and 15% to as low as 10% is going to be DC in the overall product mix. Now you're going to see variability and flexibility on that depending on when dollars come in, in whose purchasing dealerships, we do a tremendous amount of dealer business on that, are all under mandates now to get DC. So you'll see this artificial increase on DC as the dealers continue to outfit themselves across the United States, and it's going to flatten out again. And if I look at our #1 sales channel for that, it's dealerships right now on DC fast charges outside of state and municipal programs that are grand funded. Then I think the other is where we're going to be in 2030? So we see that -- as I said, we see some variance in it, as we are moving forward. But in 2030, that's the actual number we see. We see DC fast chargers are going to remain about 10% of the portfolio, and then 90% is going to be L2. And then we see a closer mix on the owner-operated model versus the sales model and then the owner-operator model slowly taking over, especially as we get into '26, '27, '28 and '29, and that's because you're going to see hyper commoditization on a lot of the L2 chargers. And so competitive margins, even though we have a target margin of 35% as a company, and we're doing well on tracking and it's going to be one of the best in the industry. You're going to see margin squeeze on that over time. So we'll see product sales start to go down in margin and then kilowatt sales go up.

So you're shifting to -- going back to the next owner-operated over time?

Yes.

Interesting, okay. where we're out of time, but I'll sneak one quick one. I did notice one of your chargers earlier, seemed like you had an advertising screen. Is that something you're getting into as well? What do you think about advertising, typical as you shift your business mix towards more owner-operate over time?

Yes. So we've analyzed the Volta model and Volta is now being absorbed in another company. And there's advantageous to it. So at CES a year ago, we did a prototype, then we did a final design. And what you're seeing and the one we showed, that's about 80% of production. There are some tweaks that have to happen to it. So right now, we're in the manufacturing phase is who we're going to procure for and where we're going to assemble on that. So the design that's basically done. So what you saw there. So we're going to put that in, and we'll have -- we're not going to get in the advertising business. So that's not our business. Our business is charging services. So we're already working with 2 companies that were awarded to one who are going to do content management and advertising, and we'll have a revenue split on that. And then on the charging services, it's going to be us, and we're going to drive revenue from the kilowatt sales on that. There may be application on the sales model and some people will buy those. But predominantly, we see that as another positive element. And if you imagine as more people fill in more chargers in their parking lots, you don't want every one of them to be that charger, right? But now we have a complete portfolio to offer any of the large size. You want an advertising unit, okay, we can put that on the front and then we can do 10 L2 chargers. And we've already got that. And we can do a turnkey solution for them across DC, advertising and L2. So we see it fitting into us. And the difference is, we're not in it for free. If we own and operate, we're monetizing the kilowatt. We're not giving out the charging for free, and we'll have a better economic model than the previous models have in the past. What we've seen is that's mostly an advertising company, not a charging company. We're flipping into, it's a charging company that has an advertising element.

Got it. I think we are out of time, so we'll end it there. Brendan, thanks so much, and to the Blink team for participating. It's a great conversation.

Sure. Absolutely. All right.