EV Charging Profitability Case Interview: France
| Case type | Profitability |
|---|---|
| Industry | Energy / EV Charging |
| Difficulty | Medium |
| Firm style | McKinsey |
The case prompt
Voltigo operates 60 fast EV charging sites across France, serving both retail drivers and discounted fleet customers, primarily on highways and in major cities. Despite strong growth in EV adoption, Voltigo posted an operating loss in twenty twenty five after being profitable in prior years. The CEO wants a plan to return to profitability in twenty twenty six without materially harming customer satisfaction or network reliability.
Voltigo runs 60 DC fast-charging sites (average 8 stalls per site), with two customer segments: retail drivers (pay-as-you-go) and fleet customers (discounted contracts). In twenty twenty five, France's grid tariff changed for high-power connections, increasing demand charges tied to each site's monthly peak kW. Management suspects costs increased faster than pricing and utilization improvements, and wants a clear diagnosis and practical plan.
The exhibits
Exhibit 1
2025 P&L by Customer Segment (€M)
Show the data behind Exhibit 1
| Segment | Revenue (€M) | Energy Cost (€M) | Demand Charges (€M) | Other Variable Costs (€M) | Fixed Costs (€M) | Operating Profit (€M) |
|---|---|---|---|---|---|---|
| Retail (pay-as-you-go) | 62.0 | 34.1 | 10.8 | 1.1 | 18.5 | -2.5 |
| Fleet (contracted discounts) | 18.0 | 10.5 | 3.2 | 0.6 | 9.2 | -5.5 |
| Total | 80.0 | 44.6 | 14.0 | 1.7 | 27.7 | -8.0 |
Exhibit 2
| Site Type | % of Sites | Sessions/Day | Avg kWh/Session | Blended Price (€/kWh) | Energy Cost (€/kWh) | Peak Demand (kW) | Demand Charge (€/kW-month) | Fixed Site Opex (€/month) |
|---|---|---|---|---|---|---|---|---|
| Highway Hub | 40% | 220 | 45 | 0.55 | 0.31 | 1,000 | 25 | 35,000 |
| City Hub | 60% | 200 | 30 | 0.52 | 0.30 | 800 | 25 | 20,000 |
Exhibit 3
Show the data behind Exhibit 3
| Hour | Avg Site Load (kW) | % of Monthly Peak |
|---|---|---|
| 06:00 | 180 | 15% |
| 07:00 | 420 | 35% |
| 08:00 | 900 | 75% |
| 09:00 | 540 | 45% |
| 10:00 | 360 | 30% |
| 11:00 | 300 | 25% |
| 12:00 | 780 | 65% |
| 13:00 | 960 | 80% |
| 14:00 | 480 | 40% |
| 15:00 | 360 | 30% |
| 16:00 | 420 | 35% |
| 17:00 | 1,080 | 90% |
| 18:00 | 1,200 | 100% |
| 19:00 | 840 | 70% |
| 20:00 | 540 | 45% |
| 21:00 | 300 | 25% |
| 22:00 | 180 | 15% |
McKinseyProfitability · medium
Voltigo FastCharge Turnaround
Energy / EV Charging
How a strong candidate structures it
Goal: Return to profitability while maintaining customer satisfaction and network reliability.
Hypothesis: Profitability declined because cost growth outpaced realized revenue, with losses concentrated in a subset of locations or customer cohorts.
Question by question
- 1
Case context
Restate the situation and objective
“What is the client situation and what question are you being asked?”
- 2
Clarifying
Clarifying questions
“What questions do you have for this case or what information would you like to know before starting?”
- 3Drill the structure
Structure
MECE profitability structure
“How would you structure your analysis of this profitability problem?”
- 4Drill the brainstorming
Analysis
Segment Profit Diagnosis
“Using Exhibit 1, identify where the €8M operating loss comes from and the segment Voltigo should focus on first.”
- 5Drill the math
Math
Site Economics Math
“Using Exhibit 2, calculate monthly energy margin and then net monthly profit for Highway Hubs and City Hubs. Assume 30 days per month.”
- 6Drill the brainstorming
Analysis
Peak Demand Levers
“Using Exhibit 3, explain what the peak pattern implies about demand charges and name two practical ways to reduce peaks.”
- 7Drill the synthesis
Synthesis
Final Recommendation
“What is your recommendation to the CEO?”
The worked path
The numbers that decide it
- Voltigo lost €8.0M in 2025; Fleet is €-5.5M of that, Retail is €-2.5M. (Exhibit 1)
- Demand charges are €14.0M in 2025, a very large cost line that can materially swing profitability. (Exhibit 1)
- Exhibit 2 implies demand charges per month of ~€25k (highway) and €20k (city); scaled across 60 sites this is roughly consistent with ~€14M per year. (Exhibit 2)
- Energy costs in Exhibit 1 are ~56% of revenue (44.6/80), consistent with per-kWh costs in Exhibit 2 being a large share of price. (Exhibits 1 and 2)
- City hubs have lower energy margin per session due to shorter sessions (30 kWh vs 45 kWh) and a narrower price-cost spread, making them more sensitive to demand charges and fixed costs. (Exhibit 2)
- Exhibit 3 suggests peaks are concentrated, meaning a few hours can set the monthly peak kW and drive high demand charges. (Exhibit 3)
- 1
High-level diagnosis
- Voltigo moved from about +€3M profit in 2024 (case fact) to -€8M in 2025 (Exhibit 1), a ~€11M swing.
- Exhibit 1 shows the loss is concentrated in Fleet (-€5.5M), with Retail also negative (-€2.5M).
- Demand charges are €14.0M in 2025 (Exhibit 1), consistent with the tariff change and likely a key driver of the swing.
- 2
Mental-math unit economics using Exhibit 2 (assume 30 days/month)
Step A — Monthly energy margin per site type
Highway Hub
Daily kWh = 220 sessions × 45 = 9,900
Margin per kWh = 0.55 − 0.31 = 0.24
Daily energy margin ~ 9,900 × 0.24 = 2,376
Monthly energy margin ~ 2,376 × 30 = €71,280
City Hub
Daily kWh = 200 × 30 = 6,000
Margin per kWh = 0.52 − 0.30 = 0.22
Daily energy margin ~ 6,000 × 0.22 = 1,320
Monthly energy margin ~ 1,320 × 30 = €39,600
Step B — Net monthly profit per site type
Highway Hub
Demand charge = 1,000 × 25 = €25,000 per month
Fixed site opex = €35,000 per month
Net site profit ~ 71,280 − 25,000 − 35,000 = €11,280 per month (profitable)
City Hub
Demand charge = 800 × 25 = €20,000 per month
Fixed site opex = €20,000 per month
Net site profit ~ 39,600 − 20,000 − 20,000 = €-400 per month (marginally unprofitable)
- Interpretation: Highway hubs are solidly profitable; city hubs are roughly breakeven or slightly negative because lower per-session revenue and shorter sessions don't fully cover fixed and demand costs. The network needs city hubs to improve utilization or reduce peaks to become profitable.
- 3
Root causes to connect back to Exhibit 1
- Fleet economics appear broken (Fleet is -€5.5M in Exhibit 1), suggesting discounts/terms are not covering peak-driven costs and/or fleets cluster charging at peak times.
- Peak-driven demand charges are very large (€14M in Exhibit 1) and can be driven by a small number of peak hours (Exhibit 3), so peak management is a core lever.
- City hubs, which make up 60% of the network, are marginally unprofitable (Exhibit 2), suggesting operational improvements there could have outsized impact.
- 4
Recommendations (practical levers)
- Fix Fleet profitability: renegotiate fleet pricing/discount rules and add simple incentives for off-peak charging; consider minimum monthly fees or tiered plans.
- Reduce peak-driven costs: introduce peak/off-peak pricing and basic load management to reduce simultaneous high-power charging; improve queue/idle management.
- Improve city hub economics: boost utilization through marketing, partnerships, and convenience features; renegotiate leases where possible.
- 5
Risks and next steps
- Risks: customer backlash to price changes, fleet churn, and brand impact from operational changes.
- Next steps: analyze fleet charging time patterns, rank sites by demand charges and profitability, and pilot peak pricing/load management in a few regions before rolling out nationally.
McKinseyProfitability · medium
Voltigo FastCharge Turnaround
Energy / EV Charging
Why this case
Generic profitability cases rarely make a tariff rule the central driver. This EV charging scenario tests whether you connect a few peak-load intervals to a monthly demand charge, then trace that cost through customer and site segments. The industry trap is fleet discounting: fleet loses €5.5M despite €18.0M of revenue, while city hubs are only marginally unprofitable. The recommendation must protect reliability while changing price and load behavior.
FAQ
- Which segment should you fix first?
- Start with fleet. It loses €5.5M, compared with €2.5M for retail, so it represents the larger share of the €8.0M network loss. Review discounted contract terms, minimum fees, and charging-time incentives first. Keep retail in scope because it is also negative, but fleet economics offer the clearest initial turnaround target.
- Why are demand charges so important?
- Demand charges are based on each site’s monthly peak kW, not average utilization. A few high-load intervals can set the charge for the entire month, so simultaneous charging can erase energy margin. In the case, demand charges total €14.0M. Peak/off-peak pricing, fleet time windows, and software load management directly address that mechanism.
- Which sites are profitable?
- Highway hubs are stronger: at 220 sessions per day and 45 kWh per session, a typical site produces about €11,280 in monthly net profit after energy margin, demand charges, and fixed opex. City hubs run at about negative €400 per month because shorter sessions and a narrower price-cost spread leave little room for fixed costs.
- How can Voltigo improve profitability without hurting customers?
- Use targeted pilots instead of a broad service cut. Renegotiate fleet discounts, offer off-peak incentives, and apply load management to reduce simultaneous peaks. For city hubs, test utilization and lease improvements. Monitor customer satisfaction, charger availability, peak kW, fleet retention, and site profit so reliability remains a hard guardrail during the turnaround.
McKinseyProfitability · medium
Voltigo FastCharge Turnaround
Energy / EV Charging