Contractual and liability issues regarding the rollout of electric vehicle charge points in Europe

By Lawrence Freeman,

11-2018

In view of the significant growth of electric vehicle sales, an increasing number of companies (including EV manufacturers and electricity suppliers) have started to build networks of charging stations. Based on his experience of working at Tesla, Lawrence Freeman (now Senior Counsel in our Brussels office) explains the legal challenges of such projects.

The operator of a network of electric vehicle ("EV") charge points (which could also be an EV manufacturer) will need to locate the charge points subject to general network connection rules, planning law and safety regulations. Typically, the operator leases premises and purchases/ provides for electricity necessary for electricity supply at the charge point.  

In some countries, the operator may apply for subsidies for the installation of publicly accessible EV charging infrastructure.

The operator will need to consider contractual and liability issues vis-à-vis not only 

(a) the landlord of the premises on which EV chargers are installed, but also 
(b) the EV user, and 
(c) the power producer.

(a) The landlord

In relation to the landlord, the operator may agree that the infrastructure that the operator has installed becomes property of the landlord upon termination of the lease.  This could be in return for waiving the requirement for the operator to pay rent or share revenue (as the operator's investment in infrastructure constitutes consideration for use of the premises).

The parties will need to consider joint PR activities and the joint naming of the station. It will also be necessary to find agreement on the number of parking spaces which will serve as "dedicated" charge posts to be used by certain EVs, and the number of spaces outfitted with charge posts to charge certain EVs but which are also available for general parking, but not charging, of non-EVs for a maximum number of minutes ("enabled" stalls) with signage.

The parties will have to settle other contractual terms including those relating to operating costs, maintenance, advertising, non-impairment of the charging station, insurance, assignment of lease rights and indemnifications.

(b) The EV user

In relation to the EV user, the operator will need to consider pricing rules such as the requirement under EU Alternative Fuels Infrastructure legislation that the prices charged by the operator of a charge point are reasonable, easily and clearly comparable, transparent and non-discriminatory.

Purchasers of EV charging infrastructure should ensure that they receive relevant manufacturer warranties to evidence that equipment has been manufactured to the latest technical standards.

An operator may decide to charge idle fees if the EV remains connected to the charger after charging is complete. The legal risk is that any assurance in advertising, on websites, brochures or customer-facing materials of any kind that EV users will be charged for charger use could be used to argue that charging a fee later for idling is (i) a breach of contract i.e. public statements about charging constitute a term of the contract either express, or where generally clear, implied; (ii) unfair terms i.e. any express contract term entitling the operator to levy a fee for idling or to increase that fee unilaterally is unfair and unenforceable; (iii) a misrepresentation i.e. a statement or ad promising to charge for charging is a statement which induced the customer to use the charger and that introducing idle charging is a breach of that representation entitling the customer to rescind the contract and get the customer's money back.

The solution is essentially to regard idle fees as paying for parking. The important threshold for the operator to be able to ask a customer to pay idle fees is that the customer is informed of idle fees before they are incurred (which is similar to reading a sign on parking rates when the customer pulls into a parking lot). The operator could launch a system that prompts customers to make payment by credit card, at which point they will accept terms of service covering idle fees. Customers' credit cards would not be automatically charged for idle fees until they have accepted the terms of service.

(c) The power producer

In relation to the power producer, the operator may consider requiring provisions in the Power Purchasing Agreement ("PPA") that enable the operator to terminate the PPA pre-emptively where the after-tax value of electricity changes. It is also important that the PPA includes performance guarantees from the power producer to let the buyer meet demand schedules subject to penalties.

 

Authors

Lawrence Freeman

Lawrence Freeman

Senior Counsel
Belgium

Call me on: +32 (0)2 282 6000