'We think we have the right team to make an impact'

It will be the latest in a series of investment rounds the company has carried out in its short history, as FOR EV looks to capitalise on the switch from vehicles powered by fossil fuels to those that run on electric batteries.

FOR EV has already been backed by the Scottish National Investment Bank (SNIB) three times.

The state-backed development bank, which invests in firms engaged in key missions, such as the drive to net zero, has followed its initial investment of £2 million in FOR EV 2021 with two deals worth £10m, the first in 2022 and the second in June this year.

The latter is being used to help the company roll out its new fleet proposition, after a major deal was secured to provide EV charging infrastructure to Network Rail.

READ MORE: Scottish apprenticeships come under the microscope

Speaking to The Herald Business HQ Monthly, Mr Dunlop, a former chief executive of Scottish Enterprise, who also chairs Crosswind Developments, the mammoth housing development project next to Edinburgh Airport, said the next investment round is about “a wee business who wants to be a big business, convincing investors that we are backable and really know what we are all about and what the market needs”.

He declared: “We think we have the right team and the right support around us to make a real impact, so it is really exciting.”

The SNIB was the first investor in FOR EV, and took an equity stake of 27% as part of its original investment. Mr Dunlop commented that the backing of SNIB has been important “because it demonstrates that our national public bank has confidence in us, and demonstrates to the market that we are aligned with a bank that is trying to make impact investment a real thing in a sector trying to deliver net zero”.

He said: “That first £2m of equity has been followed on by two tranches of £10m and that has enabled the business to grow its capability and capacity at board and executive level.”

Mr Dunlop added: “Over those three years we have gone from three people to 33 people, which has allowed us to develop our capability to deliver assets, to sell our product, and really help us really define our place in this growing market.”

READ MORE: Scottish oat milk pioneer harnesses 'world-famous' crop

Now, having used those first investments to prove its credibility, FOR EV is now targeting private sector backers, which Mr Dunlop said would “most likely” involve an equity investment, as well as securing access to “considerable amounts of capital in many forms”.

He said: “We know this market has been heavily invested in over the past five years or so, therefore we are confident with the right product at the right time with the right offering, which is different from anyone else, we will gain real market interest. We will target quite a wide range of investors, given what we are trying to do.”

FOR EV was originally set up to provide an EV charging solution in built-up areas where home charging was not possible. However, the company soon found this was a difficult market to penetrate because of the existence of the Charge Place Scotland network, which at the time was publicly funded and offering free electricity.

FOR EV then broadened its model to develop a charging solution for commercial vehicle fleets.

“We started out calling it charging-as-a-service but now call it a FOR Fleet offer,” Mr Dunlop said.

“Our FOR Fleet offer is a comprehensive, fully-funded solution that will enable fleets to transition smoothly, quickly, easily, in a really safe and transparent way.

“That is a model that we have been working on for two or three years, and have now proven it works in the marketplace by delivering two contracts for Network Rail in Scotland, one in Irvine, and one in Glasgow in Cowlairs.”

Mr Dunlop said the fleet solution is fully-funded, with no capital required from the operator. “It is all about the revenue perspective,” he said. “The revenue is made up of offering a per kilowatt per hour charge for the fleet. Quite simply, we calculate how many miles a fleet uses in a year from petrol and diesel; we give an equivalent cost for kilowatts used; we agree with the client how much energy will be required on an annual basis and up to a seven-year period; then we break that down into a quarterly payment.

“So, it becomes really simple, really transparent, really clear, and the magic of this is we can demonstrate that the cost savings on operating a fleet from an EV perspective is significantly reduced to that of petrol and diesel.”

He added: “This is a conversation with fleet operators now to demonstrate how they can change, but also why they should change. We are very much about supporting people as they go from the fleet of yesterday to the fleet of tomorrow.”

Asked if the company had a strong pipeline of potential clients, Mr Dunlop replied: “We are really excited. It is an enormous market. There are 5,500 fleets in Scotland alone and they all have different requirements, so our bespoke solution is really reaching out to folks who are ready to make that transition.

“But we are excited about the level of interest that the market has shown, and our sales staff are now 80% deployed on to our FOR Fleet offer... and I can tell you they are now fully occupied.

“We are really excited about this product – we think it is absolutely of its time.”

On the general roll-out of charging infrastructure for electric vehicles in the UK, Mr Dunlop said there has been a significant investment in charging solutions in the past five years, be it in homes, on motorways or in destination charging.

“A lot of the public discussion has been around how little infrastructure there has been. It may have been true five years ago, but it is not true now,” he said.

“More of a concern is the slowdown of consumer purchasing of EV vehicles. There has been massive investment in infrastructure, but a slight slowdown in the number of vehicles being purchased by consumers. This is slightly offset by the increase in fleets of EV vehicles.

“My message is if we want to continue that transition and encourage the private sector to invest in infrastructure, there needs to real confidence and alignment between policy and regulation and investment from the whole system to make sure that there is confidence and consistency. That means the UK could have standards of electrification that we see in places like Norway.

“We should reach for those that are exemplars, where this is common practice, where it has become normalised for everything to be EV and electrified and therefore have massive environmental benefits.

“My dream is the whole system moves en masse, confidently, with certainty and with consistency and that way we will get there much more quickly.”

Asked why the sales of electric vehicles has slowed down, Mr Dunlop highlighted the change in policy by the previous UK Government, which pushed back the deadline banning the sale of new petrol and diesel cars to 2035 from 2030.

He said there was evidence that people have delayed purchases of new cars in light of the change.

“That’s why I say that when we set these targets, we should try to stick to them, and we should try to both regulate and incentivise to enable society as a whole to transition.”

He added: “As an investor, the Scottish National Investment Bank really wants to see impact investment.

“We are really interested in how we can deploy our network, our technology into places where the rest of the market might find it unappealing, so on the islands and in the Highlands.

“Frankly, if you are in London or Manchester or the hotspots of the Scottish cities, there is lots of competition for charge point operators to deploy infrastructure.

“It is really important that, if this is to be an agenda where there is an equity and an equality to it, we find a way to make sure this infrastructure can be available to those who need it, not just who can afford it.

“With my background in economic development and regeneration, that is quite a passion for me.”