EV charging industry reaches crossroads as competition heats up

With sales growth slowing and some carmakers redirecting investments, electric vehicles are at an inflection point, according to Bloomberg.

That’s also true for the EV charging sector, per BloombergNEF’s latest report on the outlook for the industry. The good news first: BNEF is projecting that the long-term trajectory for EV sales remains positive, in part because batteries will become even cheaper.

The industry is set to grow despite near-term challenges including Europe’s EV trade spat with China and the possible ramifications of a second Trump presidency.More EV sales carry knock-on effects for the charging industry. BNEF expects the electricity required to feed charging stations to increase 30-fold in the next quarter century. By 2044, the millions of EV chargers around the world will consume more electricity than the US did in its entirety last year.

Public charging networks will account for more than 40 per cent of that demand, and an array of companies have begun to deploy infrastructure. While China is way ahead, Europe and the US are beginning to install at a greater pace.

The thing is, installations are merely at the beginning. Around $774 billion will need to be invested in public networks by the middle of this century, according to BNEF’s outlook. That’s not exactly small change -- especially because investor appetite is waning amid rising competition and challenges with profitability. As the industry matures, some companies will thrive, while others may perish.

Much of the current investment in the public networks has gone into fast charging, with installations outpacing vehicle sales in many countries. That’s good news for drivers, as more chargers that can juice an EV battery to 80 per cent in around 20 minutes are popping up along highways and in urban areas.

In France, the availability of ultra-fast charging connectors has improved significantly, to a ratio of one per 77 battery-electric vehicles at the end of last year, from one per 290 vehicles in 2021.

A similar story has played out in the Netherlands, Norway and Germany, which have seen drops to between 95 and 133 BEVs per ultra-fast connector. China, which is leading on EV adoption, has a rather staggering density of 17 BEVs per ultra-fast connector.

But in Europe and China especially, intensifying competition is weighing on business cases. Investors are having to choose between pulling financing or stomaching loses for longer as stations aren’t used as frequently as anticipated.

Last month, European operator Allego announced it would de-list from the New York Stock Exchange after its share price slumped in the two years since it went public. BNEF isn’t tracking any profitable public charging companies currently, although European operator Fastned turned Ebitda positive last year.

The coming years will play out differently around the world. China requires average annual fast-charging installations this decade to drop more than a fifth from the impressive 432,000 fast chargers installed last year, which was more than 30 times what the US added.

Europe needs a roughly 20 per cent uptick from last year’s installations, with the US requiring a massive three-fold increase -- highlighting the importance of the $7.5 billion Federal National Electric Vehicle Infrastructure Program to America’s EV prospects.

Getting chargers in the ground is only one of several challenges for operators. They also need to redouble their reliability, efficiency and site-selection efforts to win over customers. Those without enough financial backing to see through low utilization periods will go out of business, with their best sites gobbled up by those with deeper pockets.

Technology development may shift the market in the future. Once more EVs are able to charge with 350 kilowatts of power, far fewer chargers will be needed. The advent of wireless charging and autonomous vehicles could also retire infrastructure before its time.

So, much like carmakers, EV charging companies will have to strike a fine balance in the boom-and-bust cycle of what still is a relatively new industry. Capital will have to be invested for quite some time, but not every deployment will turn out to be a winner.

See BNEF’s Long-Term Electric Vehicle Outlook and data viewer to review the outlook for charger rollout and investment across 47 geographical regions, including a new breakout for all European countries and Southeast Asia. Use the Charging Infrastructure Forecast Model to complete a sensitivity analysis on the outlook.

Donald Trump used his nomination speech to again take aim at President Joe Biden’s electric vehicle policies. “I will end the electric vehicle mandate on day one,” the former president said in his address at the Republican National Convention in Milwaukee.

While the US doesn’t actually have an EV mandate to end, critics of new air-pollution limits that the Environmental Protection Agency set in March have said the standards would illegally force automakers to sell battery-powered vehicles. Trump also reiterated an openness to Chinese automakers building cars in the US.