Imagine this: One day, you’re known as a stuffy, state-owned Italian utility company. The next you’re America’s most ambitious green infrastructure player. It is, with some sense of exaggeration, what is happening to Enel, a multinational energy utility, as it rolled out its American expansion plans last week.
Enel X Way, the EV charging subsidiary of Enel, said it will build a U.S. network of 10,000 fast EV chargers to rival Tesla’s in the next decade while planning another 2 million home chargers. The plan represents a multibillion-dollar commitment and would catapult Enel to the big leagues in the U.S.
But what gives a partially state-owned Italian utility company the confidence to invest billions and believe it can compete with Tesla in its home market?
“It seems audacious, but it’s a fairly logical jump,” Chris Baker, Enel X Way’s head of North America, told me over the phone from California. The company already sold over 170,000 of its JuiceBox home and business chargers. Going from 170,000 to 2 million over a decade, and adding 10,000 public fast EV chargers to the mix, is “a nice evolution, not rocket science,” he said.
The Inflation Reduction Act surely helped as well. Signed in August 2022, the centerpiece of President Joe Biden’s green industrial policy led almost immediately to a broad suite of investment announcements, including many from trade-allied European and Asian companies who are quick to take advantage of the hundreds of billions of dollars in tax credits.
Yet there are additional aspects at play. During the internet revolution, the “Big Tech” companies that emerged were all American, either Silicon Valley or Seattle-based, thanks to the fruitful combination of venture capital, scientific knowledge, and the military-industrial complex in the area. No European company could compete with Silicon Valley’s giants. Why is it different now with European utility players like Enel leading the way?
“A lot of cleantech operations involve a significant role of the public sector,” Alex Mitchell, a cleantech investor based in Los Angeles, noted. “Permitting is not a strong suit of American companies, but it is of European ones.”
That logic does seem at work in the case of Enel. The company got its start in the 1960s when over a thousand of provincial energy producers merged to create the Italian utility giant. With the Italian government as its largest shareholder, the company built out Italy’s hydroelectric and nuclear energy before connecting Italy’s grid to Europe and expanding beyond its borders as the market liberalized.
Those origins now play in its favor, Baker confirmed. “Success in the charging space comes down to having a much longer-term view,” he told me. “Fundamentally, it’s an infrastructure play. It’s a public good. So you want a company with long-term, patient capital.” Many U.S. companies had “splashy fund raisers,” he said in a dig to some of his rivals, “but their cash burn is tremendous.”
Then, Mitchell says, there’s how politics affects markets. EV chargers, batteries, a renewable energy grid, and other clean tech solutions can still be seen as divisive solutions in the U.S., whereas the same is not true in Europe, Korea, or Japan. “Call it ESG or whatever, the whole topic of sustainability is still a partisan topic in the U.S., in a way it is absolutely not in Europe,” he said.
It has meant that “in the corporate industrial space, European firms are generally advantaged over their U.S. counterparts,” Mitchell said. “They often have a sovereign wealth fund that owns part of them, that thinks more holistically.”
Enel is a case in point. While it already had some presence in the U.S., it was even bigger in Europe. I used many of their public chargers myself last summer. I still have the Enel X Way and Endesa (Enel’s Spanish subsidiary) apps on my smartphone. Building on its large European presence, I can see how Enel felt ready to take on the large U.S. market once the “policy” framework was right.
To Baker, last week’s announcement felt like a relief more than a surprise. “We’ve been working in secret on our final plans [for a long time],” he said. “We’re happy to finally share it in public.”
More news below.
Peter Vanham
peter.vanham@fortune.com
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