The International Energy Agency’s Global EV Outlook Report highlights that sales of electric cars topped 2.1 million globally in 2019, with electric cars accounting for 2.6% of global car sales. This significant increase in electric vehicle (EV) sales is expected to drive a substantial rise in the EV charging infrastructure market. A recent report from the National Renewable Energy Laboratory reveals that public electric vehicle supply equipment grew by about 7.6% within three months in 2020, further supporting the growth of the EV charging infrastructure market.
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Government Policies and Carbon Neutrality Drive Market Growth
Concerns about carbon emissions and policies aimed at achieving carbon neutrality are prompting governments worldwide to create prudent policy frameworks and announce favorable subsidies. This is expected to significantly boost EV battery sales and the EV charging infrastructure market. For instance, the European Union (EU) has implemented policies such as fuel standards for trucks and cars and Clean Vehicle Directives for procuring electric buses. Similarly, the French government has announced incentives of up to 12,000 euros for purchasing electric vehicles. Other countries, including India, the US, France, and the Netherlands, have introduced policies to encourage electric vehicle sales, further driving the market potential for EV charging infrastructure.
Reduced Costs at Charging Stations Foster Market Expansion
Research indicates that both hardware and installation costs for charging stations dropped by 50% between 2011 and 2013, largely due to the growing preference for dual chargers over single chargers per pedestal. This cost reduction has enabled manufacturers to adopt viable business models, creating a favorable environment for the expansion of the EV charging infrastructure market. Additionally, an increasing number of companies from diverse industries are entering the market, recognizing its promising prospects.
Compatibility Challenges Pose Threats to Market Growth
Currently, compatibility issues due to various plugs and outlets mean that not all EV models can plug into all charging stations. Each charging station is associated with a specific network type, posing a key limitation for EV charging stations. This lack of interoperability may deter a significant number of consumers from purchasing electric cars. Consequently, compatibility challenges remain a major impediment to the rapid expansion of the EV charging infrastructure market.
Fast Chargers in Demand, but High Costs Hinder Sales
The demand for fast-charging infrastructure has surged, driven by the popularity of fast chargers in commercial stations. Despite the reduced cost structure of charging stations, there is a greater demand for fast EV chargers, commonly known as superchargers. However, these fast chargers, such as Chademo, come with a premium price tag, with installation costs in the US ranging from $4,000 to $51,000. This high price point is a key factor affecting the overall EV charging infrastructure market. Most organizations are installing Level 1 DC fast chargers and Level 2 AC charging stations, fueling the growth of fast chargers. The slow charger segment is also set to rise due to increased deployment at public and residential charging stations.
Asia Pacific Positioned as EV Charging Infrastructure Hub
Market estimates indicate that Asia Pacific is set to account for a major revenue share in the global EV charging infrastructure market, driven by favorable government policies in fast-developing economies such as China, India, and Japan. For example, in Japan, the number of electric charging stations far exceeds petrol pumps, highlighting the country’s commitment to EV adoption. Approximately 39,000 new electric vehicles were sold in Japan in 2019. India has also announced plans to have about 1,000,000 EVs by 2024, according to the National Research Development Corporation (NRDC). Additionally, European countries such as the UK, France, and Belgium are focusing on improving EV interoperability across the region.
COVID-19 Impact on EVs and Charging Stations
The global COVID-19 pandemic significantly impacted the automotive industry, leading to massive losses for almost a year. This disruption deterred the momentum of electric vehicle production and sales, subsequently affecting the development of EV charging infrastructure. Logistical and supply constraints emerged as the biggest hurdles during this period. However, despite the pandemic, Europe saw increased sales of electric passenger cars, surpassing EV sales in China.
Key Market Players Collaborating for Strategic Expansion
Key market players are prioritizing the consolidation of their market shares in the EV charging infrastructure market through strategic mergers and acquisitions. For instance, ChargePoint has collaborated with BMW Inc. and Volkswagen Inc. to set up fast chargers along the US West Coast. Other prominent players, such as AeroVironment, Inc., BP Chargemaster, and ABB, are also focusing on such strategies to enhance their market positions. Additionally, automotive giants like Volkswagen Group, BMW Group, and General Motors are investing in charging infrastructure to reduce fleet emissions. Collaborations are also occurring between manufacturers and car rental service providers, such as Eaton Corp’s recent collaboration with Green Motion car rental services to integrate chargers into buildings with energy storage. These collaborations and investments are driving the expansion of EV charging infrastructure.