Siemens is making big moves in EV charging, and one Canadian company is reaping the benefits.
7 Generation Capital just raised an $8-million Series A led by the Quebec-based pension fund Fonds de solidarité FTQ and Siemens Financial Services. 7Gen’s Vancouver and Montreal offices help businesses like retailers or waste-management firms deploy medium- or heavy-duty EVs.
The deal comes on the heels of a blockbuster EV investment deal for Siemens. Volkswagen just sold a stake in its US$2.45-billion EV-charger division to Siemens Financial Services for US$450 million to fund a U.S. and Canada expansion.
The 7Gen investment signals a belief in “the importance of knowledge and experience when electrifying commercial fleets,” Ifti Raissudin, vice-president of equity investments at Siemens Financial Services, said in the announcement.
Why it matters: Even when gas was $1.03 per litre, businesses could have saved $4,400 per vehicle each year by switching to EVs—but it could take nearly eight years to recover the initial upfront cost, according to a Pembina Institute analysis of Toronto-area delivery fleets with Level 2 chargers last year.
7Gen aims to smooth out that transition, rolling leases, charging, software, maintenance and government incentives into one monthly bill. The company’s expansion comes after the 2022 federal budget set aside $547.5 million in incentives for medium- or heavy-duty zero-emission vehicles.
The details: 7Gen launched in 2020 and is still small, with just 16 EVs and/or chargers deployed, but it is working with IKEA Canada, Bolt Logistics, and other couriers and container terminals to transition their fleets. The company was hoping to deploy 500 vehicles and chargers by the end of this year, but now expects that will take an additional six to nine months due to supply-chain issues.
As it grows, 7Gen thinks its relationships with vendors will help it get better pricing than an individual business owner, and it could speed up charger installations by keeping them in stock. 7Gen CEO and co-founder Frans Tjallingii told The Logic he’d also like to eventually work with banks on more favourable vehicle-financing options for small businesses.
The context: The German electrical-engineering giant Siemens is known for its industrial prowess on products like the Ford F-150 Lightning charger, and has worked with the Ontario autonomous-vehicle company OTTO Motors and with Lion Electric, the Quebec electric-bus and -truck maker.
But its financial arm has also been making a splash, launching a separate US$100-million fund for small and medium businesses’ decarbonizing efforts. Siemens’s financial division was part of a group that acquired the Ontario school-bus company Switzer-CARTY Transportation last year, with the specific goal of electrifying the fleet.
Siemens gives 7Gen a “highly credible” backer that, alongside the Fonds de solidarité FTQ, is willing to make introductions to a global portfolio of companies to help 7Gen scale, Tjallingii said.
The takeaway: “We’re there when things break down,” said Tjallingii.
“It’s young technology, so there is some complexity in just making it all work. We have gone through the steps with a number of clients already, which just provides us that learning that helps clients scale faster and more confidently. And so I think that’s where it starts.”
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