Car charging startup ECOtality deepened its relationship to ABB on Wednesday, announcing a new $5 million investment from the Swiss grid giant, as well as a licensing agreement to use ECOtality’s Blink operating platform to connect ABB’s line of car charging equipment.

It’s the second announcement between the two companies. In January 2011, ABB invested $14 million in the San Francisco-based startup, and agreed to be the preferred U.S. supplier of ECOtality’s equipment.

But Wednesday’s announcement goes a step further by tapping ECOtality’s Blink platform, its network for connecting plug-in car drivers and utilities, for all of ABB’s car charging systems. That licensing agreement is worth about $5 million to ECOtality, and it also opens the door to seeing the startup’s software spread to chargers beyond its own.

For example, ECOtality and ABB are working with five different utilities in Europe that want to embed ECOtality’s Blink software in ABB chargers to deploy in pilot projects, ECOtality CEO Jonathan Read told me in a Wednesday interview. He wouldn’t name the utilities in question.

ECOtality is one of a few key startups in the vehicle charging space, including Better Place, Coulomb Technologies and AeroVironment. But giants like ABB, Siemens, General Electric and Schneider Electric have all launched car-charging platforms in the past few years, leading to expectations of massive consolidation in the car-charging industry.

But most of the chargers being deployed today lack the two-way communications and network management that ECOtality brings to the picture, Read said. Amongst the company's competitors, Coulomb also networks its chargers, and has distribution agreements with Leviton, Siemens and Aker Wade, as well as an agreement with Eaton to connect the power equipment giant’s car charging systems via Coulomb’s ChargePoint network.

Read believes that utilities will soon start demanding two-way communications, revenue-grade metering, and other key features in car chargers being deployed in their service territory. That’s because plug-in cars represent a major disruptive load for neighborhood distribution grids, one that could grow out of control unless carefully monitored, he said. 

“Utilities understand very well that if they allow a dumb charger to go onto the network, they’ll lose the ability to communicate with that load for at least five years,” he said. While automakers like GM, Nissan, Ford, BMW and others are adding communications and networking to their new plug-in hybrid and electric vehicles, “Utilities don't care where the car is -- they only care where the point of service is.”

That means that utilities may well prefer to deal with car charging deployments that link one or two charger-embedded networks, rather than a dozen or more automaker-supported networks. In other words, “If you watch carefully, you’re going to see that this is a smart grid play,” Read said.

All of this activity, of course, is taking place to support a rollout of plug-in vehicles that adds up to fewer than 10,000 such vehicles on U.S. roads today -- not exactly a huge market. We’re seeing some private car-charging networks emerge, such as NRG Energy’s eVgo network in Texas. But most of the car charger deployments remain in the realm of government-supported pilot projects awaiting a fleet of plug-ins to make them useful.

ECOtality is participating in one of the largest such deployments, The EV Project, an effort supported by the Department of Energy, Nissan and General Motors to install charging networks in six U.S. states. ECOtality won a $99.8 million DOE grant in 2009 for the project, and is installing about 14,000 chargers in cities on the West Coast, Texas, Tennessee and Washington D.C..

ECOtality has installed more than 7,000 chargers so far, Read said. While most of the chargers are of the slower, lower-voltage variety, ECOtality is also planning to install about 400 fast chargers at key locations, including a dozen Best Buy stores and a few Fred Meyer stores on the West Coast. Walgreens is planning to install some 800 chargers at its stores, with a subset to be fast direct current (DC) chargers. ABB bought Epyon, a Dutch fast-charging startup, last year, which could give it inroads into this market -- as well as another set of equipment to link up via ECOtality’s Blink network.