For the past four years or so, the fortunes of publicly traded green transportation company ECOtality (ECTY) have been riding on one big customer. That’s the Department of Energy, which in 2009 pledged $115 million in grants to the EV Project, a grand experiment in rolling out plug-in vehicle charging infrastructure across fifteen metro areas in the United States.

But that money isn’t going to last forever, as ECOtality’s 2012 earnings report this week made clear. The Phoenix-based company reported record revenues of $54.7 million for 2012, up 93 percent from $28.4 million in 2011, and a 2012 loss of $2.3 million, or 10 cents a share, compared to 2011’s loss of $6.7 million.

The news was good enough to boost ECOtality’s stock price to $1.30 in Tuesday trading, its biggest gain in three years, and shares were still trading up Wednesday morning. Still, that’s a far cry from the $10-per-share range that ECOtality shares commanded back in 2008 and 2009, when its EV Project plans were just getting underway.

ECTY stock price

ECTY data by YCharts

That indicates that investors are pricing in a lot of concern about the company’s prospects once that project is complete -- and that time is coming soon. About 72 percent of the company’s 2012 revenue was attributable to continued rollout of the Blink network of charging stations for the EV Project, company CFO Susie Herrmann said in Tuesday’s conference call. Of the company’s $100.2 million total grant award, some $84.8 million had been received as of December 31, 2012, with $63.7 million recognized in revenues, up from $24.2 million recognized as of the end of 2011.

That leaves ECOtality in the unenviable position of needing to come up with new revenues to make up for the winding down of the EV Project, CEO Ravi Brar said in Tuesday’s call.

“We absolutely realize that this is a balancing act, where we are balancing the wind-down of the EV Project,” he said. That means that, by 2014, ECOtality should be getting only 20 percent of its money from EV Project “residual” revenues and other government projects, instead of today’s 80 percent or so, he said.

To get there, ECOtality is banking on “literally building another company on the foundation of the EV Project that sells Blink and Minit-Charger and eTec Labs for a living,” Brar told investors. That’s a list of the company’s varied lines of business, including its core Blink smart charging station network; its Minit-Charger industrial and commercial fleet vehicle charging business; and eTec Labs, its R&D arm.

In a Tuesday interview, Brar told me that ECOtality sees revenue growth across all three of those lines of business, though he wouldn’t provide any projections beyond what the company has publicly disclosed so far. For example, eTec contributed $7 million in 2012 revenues out of a $25 million backlog of work that will add to revenues over the coming years, he said.

Likewise, the company’s Minit-Charger business, which it acquired from Edison International for $3 million in 2007, is now powering up forklifts, airport tractors and other such electric-powered industrial vehicles for customers in the U.S. and Canada, including a $1 million fourth-quarter order from Southwest Airlines. In June, it launched a $12.5 million joint venture with China’s Changchun Eco-Power Technology Co., aimed at spreading the same technology to that country’s airports and warehouses, as well as other markets.

As for building the Blink network in the U.S., Brar said that its EV Project customer base provides an obvious starting point for expansion, both in terms of the number of customers with EVs that need charging and the range of services ECOtality can provide over the network.

At the end of 2012, ECOtality had installed about 10,000 of its Level 2 chargers, mostly in homes and workplaces, which puts it at a close second in terms of North American deployments behind ChargePoint (formerly Coulomb Technologies), which had about 11,000 stations deployed at the time. By mid-2013, ECOtality expects to have 13,000 Level 2 chargers installed to reach the EV Project’s goals, Brar said.

ECOtality had also deployed 55 DC fast-chargers by the end of 2012, out of the 200 that will eventually be installed by year’s end, making it the largest fast-charge network in North America, he said. Contenders on the fast-charging front include NRG Energy and partner AeroVironment for NRG's eVgo project, which is the country’s first attempt to build a charging network that doesn’t rely on big government subsidies.

From Real-World R&D Project to Money-Making Charging Platform

As for customers, about 8,000 EV owners, almost all of who drive the plug-in EV Nissan Leaf and hybrid Chevy Volt, are now part of the EV Project, Brar said. But those customers are a bit special, in that most of them have up until now been getting all their charging equipment and services for practically free.

That includes a free Level 2 car charger that otherwise retails for about $1,500 and up, along with rebates on the installation cost, in exchange for the right for ECOtality and DOE to collect their driving and charging data. And, until recently, customers were paying nothing for the time they spent charging their cars, although some of them were paying for the electricity itself, depending on the market, he said.

Converting them to paying customers will be an interesting challenge for ECOtality as it goes forward. In the fall of 2012, the company started down that path by instituting a $1-per-hour fee for use of its Level 2 chargers, Brar said. While customers scaled back on charging at first, they’ve since returned to their previous charging behavior, he said, indicating that the new fee isn’t that hard to swallow.

Whether or not $1 an hour is enough to pay for the cost of installing and maintaining its charging systems is another matter. Brar wouldn’t say whether or not its current pricing schemes were on track to realize profitability in some or any of the markets it has deployed in so far, which include Portland, Seattle, San Diego, Phoenix, Nashville, San Francisco, LA, Dallas, Houston, Washington, D.C., Atlanta, Chicago and Philadelphia.

Certainly, “$1 an hour just doesn't make sense everywhere,” Brar said in Tuesday’s conference call, though he didn’t say just what different pricing plans the company was considering for its Level 2 charging customers.

Overall, revenues from these usage fees were approaching nearly $40,000 per month as of the end of 2012, Brar said in Tuesday’s conference call. But he also walked back ECOtality’s previously reported goals of $2.5 million in aggregate usage revenues for 2013, calling the target “a bit of a stretch.”

“I think it's reasonable that we could go into next year with that as a run rate,” he said. “But just based on the number of vehicles that are out there today and the size of the charging network, I don't know that we'll hit $2.5 million by the end of this year.”

As for its fast chargers, which have been deployed in parking lots of retailers including Best Buy, Ikea, Macy's, Sears, Wal-Mart and most recently, the Kroger grocery store chain, those are also free at present. ECOtality plans to roll out pricing plans for its fast charging stations in the next few months, Brar said.

While many of these customers are EV Project participants, they also see good reasons to continue installing fast chargers once the government money runs out, he said. For instance, research shows that EV owners tend to be wealthier and more highly educated than the average shopper, making them a nice target demographic, he said.

What’s more, EV drivers who do plug in to a fast charger then have half an hour or so to spend shopping at the stores next to the charger, making them more likely to do their grocery shopping, banking, dry cleaning, pet grooming, etc. in that one stop, he said. All in all, retailers are “in the process of rationalizing the future ROI of more of these beyond the EV Project -- and the ROI is really there,” he said.

In the meantime, ECOtality is also looking at opportunities outside its EV Project markets. Partners like Swiss grid giant ABB, which is also an investor in ECOtality, could help in building out these networks, though ECOtality does need to expand sales of its own in-house charging technology as well. Right now, the company mainly works with its Certified Contractor Network of regional electricians and installers, though it’s also working on projects with larger, as-yet-undisclosed partners on that front, Brar said.

In the meantime, it’s working with would-be competitors as well to expand beyond the borders of its own installed charger base, he said. In March, ECOtality launched a joint venture with ChargePoint, called Collaboratev, to make the two companies’ customer management and RFID card payment systems compatible with one another.

In the long run, the goal of integrations like these is to “create an infrastructure for other networks that will be built in the future, a shot at leveraging all the investment that ECOtality and ChargePoint have already made,” Brar said. The question remains, however, whether there will be enough plug-in vehicles on the road to support the growth companies like these need to turn government-backed infrastructure projects into paying concerns.

Brar expressed optimism on that front, noting the impressive sales figures for Nissan’s Leaf and the Chevy Volt so far this year, as well as all the new plug-ins coming out from Toyota, Ford, Tesla and other automakers. At the same time, “it takes time for the infrastructure to be built, and for OEMs to come out with products,” which means that ECOtality’s eTec and Minit-Charger lines of business will be important revenue drivers as well, he said. One thing's for sure -- the next year or so will be crucial for the company.