Behind the Fence vs. Charging Depots: What is the difference and what is right for my electric fleet?

Today I’ll be diving into two commercial EV charging scenarios, offering a detailed analysis from two perspectives. Whether you’re an infrastructure developer or managing a fleet of electric trucks, this blog will provide valuable insights.

We’ll start by exploring the pros and cons of each scenario from the viewpoint of the fleet. Then, we’ll shift our focus to the perspective of charging infrastructure developer, with key observations of the electric utility business model that will shape our discussion..

Finally, I will make the same argument that explains why you’d rather visit your gray-haired doctor when faced with debilitating abdominal pains, rather than their energetic young PA. Experience.

Framing

But first, some of you might be wondering, “Why am I reading yet another blog about electric trucks? Don’t they only exist in the ports of California?” Well, I would tell you that the answer is simply no. But more importantly, I would tell you that it is imperative for your transportation organization to evaluate how electric trucks might wind up in your hands, and what to do with them when they do.

Regulations like the Advanced Clean Trucks rule, the Advanced Clean Fleets rule, and the EPA’s Phase 3 Final rule have no trouble making headlines and garnering the attention of industry trade organizations and lawmakers in D.C. However, underappreciated tailwinds (or headwinds, depending on where you stand) are driving broader adoption of electric trucks, in California and across state lines.

Publicly-traded corporations have been directed to eliminate carbon emissions from their operating footprint, requiring intermediate checkpoints to track their progress. It is no surprise that the transportation of goods across seas, roads, and rail accounts for an outsized proportion of an organization’s emissions profile. As executives weigh potential emissions reductions against the cost of those solutions, transportation often lands in the crosshairs.

For those third-party logistics providers running freight for the countries’ largest corporations, you have likely already been asked to track your own internal emissions profiles. Next, whether you are in Los Angeles, Chicago, or Memphis, you will be asked to pull loads with zero-emissions equipment. Evidence of this can be found in a recent announcement by PepsiCo. In an effort to curb its supply chain emissions, PepsiCo is working with Einride and Memphis-based carrier Armstrong Logistics to electrify certain regional routes. The collaboration is “projected to transport over 2,500 loads annually, covering nearly 200,000 miles and reducing approximately 143 metric tons of carbon dioxide equivalent, or CO2e emissions, each year.” 

Quickly outpacing corporate and regulatory pressures is the fact that battery electric trucks are approaching, and will soon surpass, total-cost-of-ownership parity with diesel. Led by the Tesla Semi, truck manufacturers are rapidly improving the efficiency and capability of their heavy-duty electric trucks. It is well understood that when electrics are cheaper to operate than diesels, the drivetrain transition will happen rapidly.

Source: Tesla, Electrification is Proven and More Efficient

When, not if

Now we will take a step back to ask ourselves the question, “When my customers do ask me to run their freight with electric trucks, how will I recharge them?” This seemingly simple question has been the culprit of many lost hours of sleep for California transportation companies. Here, I will try to tackle this question as clearly and concisely as possible.

There are really two types of commercial EV charging scenarios: Behind-the-Fence charging infrastructure and Charging Depots. The nascent commercial electric vehicle market is still finding its footing when it comes to nomenclature, and I have often preferred terms that describe how the chargers are used as opposed to where they are located. Regardless, for today’s discussion, we will rely on these industry frontrunners.

Behind-the-Fence

Private fleets and for-hire carriers that purchase electric trucks have learned that it is wise, in this case, to put the cart before the horse. That is to say, plan your charging infrastructure strategy before placing your electric vehicle order. The follow-up question “Why?” can be answered by this quote from our friends at EPRI:

“EVs ordered by customers (including Class 8 trucks) can have lead times of as little as 4─6 months… While the customer may be ready for electric service in 6─12 months, utility lead times for MW+ service capacity is typically quoted as 18─24 months or longer. Depending on the requested load level, lead times of 3─5 years are not uncommon if substation upgrades or line extensions with rights-of-way are required.” Source: EPRI white paper

Behind-the-Fence charging infrastructure describes a system that is designed for and dedicated to a specific fleet. Typically located at an existing truck terminal, cross-dock facility, or distribution center, these EV charging systems provide the most convenient and efficient charging cycles for the fleet. Whether a driver is on a mandatory break or is packing it in for the night, the truck can be plugged in right there at home base. The convenience of Behind-the-Fence charging cannot be argued. But, it certainly requires significant resources on the part of the fleet.

Three things are needed to make Behind-the-Fence charging a viable option for a fleet. Without any of the three, the whole project falls apart. They are (1) Money, (2) Real Estate, and (3) Power. We all wish we had more of these things, but EV charging infrastructure projects are even more stubborn than we are.

Money

EV charging infrastructure projects provide opportunities to experience some of life’s greatest joys. Years-long equipment lead times, months-long permitting processes, and many afternoons discussing voltages and amperage will make you appreciate the traffic on your morning commute. To add insult to injury, the cost of electrical equipment and the processes required to energize them can quickly add up.

Many large commercial fleets have the balance sheet, human resources, and executive support to pull these expensive projects off. However, many do not.

One caveat I must highlight here is that Behind-the-Fence charging systems can be delivered by third-party solutions providers. Several EV charging infrastructure providers, including Chateau Development, will finance Behind-the-Fence charging projects for fleets, eliminating the need for internal capital. But I keep this non-negotiable on my list of three because the money has to come from somewhere, and, frankly, three is better than two.

Real Estate

Some real estate challenges can be overcome, some cannot. For example, if you attend any given clean transportation conference, you will likely hear discussion about the friction between landlords and tenants in deploying EV charging infrastructure. Behind-the-Fence infrastructure often requires utility easements, saw cutting, trenching, boring, and other disruptive activities. Landlords that are not supportive of electric vehicles or are more generally checked-out can delay and even altogether prevent EV chargers from being installed. But, depending on your landlord, that can be overcome.

What cannot be overcome is a lack of buildable real estate. Many of the fleets that are pursuing electrification are located in infill industrial markets. Over decades, industrial developers have maximized available interior square footage, leaving vehicle through-lanes and parking spots tightly packed onto outparcels. While EV chargers, switchgear, and transformers do not require an expansive footprint, they do take up space. So do the bollards and bump stops that protect them. Our team has encountered several scenarios where a lack of available real estate forced our customers to pursue alternative locations.

Power

It’s been said in the data center industry that “power is king.” If you’ve picked up any newspaper or browsed the internet recently, you can certainly understand this sentiment. Well, the same is true for EV charging infrastructure, and I would add to it that “convenient power is king.”

Behind-the-Fence charging infrastructure is, by definition, a brownfield development. When a building is built, the utility delivers enough electrical capacity needed to operate it. In the case of a warehouse, that includes lighting, fans, and wall outlets, all of which typically requires around 100 kW depending on square footage. A recent whitepaper released by EPRI refers to the addition of EV chargers as “transformative load increases.”

Commercial fleets operating medium- and heavy-duty electric trucks require EV chargers capable of delivering hundreds of kilowatts (kW) to their vehicles. Take for example a fleet of 30 electric semi-trucks. Depending on their duty cycles, the fleet might install ten 360 kW chargers. That truck depot just transformed its electric load from ~100 kW to ~3,700 kW.

For context, of the 2,993 unredacted circuits on Southern California Edison’s (SCE) distribution network, just 757 have existing capacity of at least 3,700 kW. That means that the example fleet has a 1 in 4, or 25%, chance of being able to access enough power to build their Behind-the-Fence charging infrastructure.

Behind-the-Fence charging infrastructure provides the most convenient access to charging for commercial fleets, but it is not without its challenges. If a fleet lacks either the money, real estate, or power needed to deploy EV chargers, then their electrification plans will face significant barriers. And when carriers begin fighting for corporate zero-emissions freight contracts, the late Charlie Munger would say that the power-less fleet “is like a one-legged man in an ass-kicking contest.”

Charging Depots

The challenges involved with building Behind-the-Fence charging infrastructure have created what some are calling a new asset class within the broader real estate and infrastructure sectors. Charging Depots are purpose-built EV charging facilities either dedicated to a specific fleet or shared among multiple fleets. Unlike brownfield, or behind-the-fence, developments, Charging Depots are designed with the sole purpose of recharging electric vehicles. All classes of vehicles can use Charging Depots, although early examples have focused on medium- and heavy-duty (MHD) vehicles due to their enormous power requirements. These are the Charging Depots that we will focus on today.

Charging Depots reduce the friction that fleets experience when deploying electric trucks. The burden of money, real estate, and power required to build charging infrastructure is shifted from the fleet to a third-party developer. Aside from the lengthy recharging durations, Charging Depots offer a similar fueling service to fleets that truck stops currently provide. Charging Depot operators typically deliver charging services at a flat monthly rate or at a cost per kilowatt-hour ($/kWh).

Location

British real estate tycoon Harold Samuel used “location, location, location” to describe the three most important factors in determining a property’s desirability. Charging Depots are no different, however additional subtext is needed to capture the locational characteristics most important to Charging Depots. Location on the Grid, location along freight corridors, and location in relation to freight terminals are the primary factors considered when developing a Charging Depot. Setting aside the first factor, which is inarguably the most important, these factors are focused on providing the most convenient charging service to fleets. Off-site charging introduces complexity into a fleet’s operations, which can be eased if the Charging Depot is proximate to the fleet’s origin, destination, and/or route. 

Grid Capacity

Charging Depots are often designed to support multiple fleets in the same facility. Also called multi-tenant facilities, shared Charging Depots leverage economies of scale on behalf of their fleet customers, from equipment procurement to electricity rates. These cost efficiencies have two implications: lower cost per installed kW of charging capacity and lower cost per kilowatt-hour (kWh).

Charging Depots connect to the grid through megawatt-scale interconnections. It is not uncommon for a Charging Depot to take down 10 megawatts (MW) of grid capacity at a single site. For context, of the 2,993 unredacted circuits on SCE’s distribution network, just 36 have existing capacity of at least 10 MW. This means that just 1.2% of SCE circuits can host a 10 MW Charging Depot without significant grid upgrades.

Utilization

Electric utilities make money by spreading massive capital investments across millions of ratepayers, then generating a PUC-approved return on those costs. If not for the underlying population paying a couple hundred bucks per month for electricity, the power business would be too costly to sustain. This reality is a function of utilization.

Capital intensive businesses focus on maximizing productivity, or in this case utilization, in order to provide cost-effective services to their customers. Electric utilities, data centers, and Charging Depots are all capital-intensive businesses that can provide great value to their customers by maximizing utilization. When compared to a Behind-the-Fence charger, a Charging Depot can provide the same energy at a fraction of the cost per kWh.

Availability

The Charging Depot industry has its roots in Southern California where the majority of electric truck orders are being shipped. Complimentary layers of regulations, incentives, and carbon-conscious customers have spurred investment in electric trucks. A handful of Charging Depots are online today, however more are coming in 2025 and 2026. Littering the I-710 and the I-10 corridors are the makings of the first clean freight corridor.

Key Takeaways

While I’ve discussed them separately in this blog, Behind-the-Fence charging and Charging Depots are complimentary pieces of a wholistic charging solution. Convenient on-site charging is imperative for some use cases. Scalable, cost-effective charging is critical for others. What’s important is understanding how each fits into your use case.

For more than a decade, Chateau Energy Solutions has been building Behind-the-Fence charging systems for our fleet customers. As the demand for charging capacity becomes more critical, our team recognized that we would have to begin developing purpose-built facilities beyond our customers’ gates. Today, in partnership with Chateau Energy, Chateau Development is building utility-scale charging capacity designed to be shared by our customers, old and new. Leveraging more than 50 years in the electric utility industry, our teams are executing on our mission to deliver the most reliable, cost-effective charging capacity available.

Please reach out to learn more about our Behind-the-Fence and Charging Depot projects.