Governments around the world are considering transportation electrification as an important step toward air quality, climate, and energy independence goals. In order to achieve these goals, governments have invested substantial funding to incentivise electric vehicle sales and the associated charging infrastructure. DC fast chargers have the potential to solve the inherent range anxiety associated with EVs. Therefore, they are being looked upon as the ultimate growth accelerator for EV ownership.
EV promotional policy is the most important factor for EV fast charger market. The importance of this factor can be judged by the fact that, in US, states which follow California ZEV mandate, represent 35% of total EV population. In china, the upcoming mandatory sales quota for EVs has put the market in overdrive mode for past 3 years.
Varying charging standards are the most important challenge to EV fast charger market. Despite all the improvements in electric vehicle technologies, charging infrastructure still suffers from inconsistent data availability and a lack of consistent standards in most countries.
For DC fast charging, connector types vary by OEMs as well as region. The Japanese OEMs prefer CHAdeMO fast charging standard whereas American and European OEMs prefer Combined Charging System (CCS).
Wireless charging is a prominent trend in EV fast charger market. Sweden was the first to rollout and many countries are testing the viability of the technology.
POTENTIAL BUSINESS MODEL(S) FOR DC FAST CHARGING STATIONS
As we discussed earlier that most of the charging infrastructure initiatives are driven by government initiatives, what is in it for EV charger manufacturers and network providers? We believe, as the market starts growing from consumer demand and begins to reach mainstream, there is a strong potential for a complete transition to convert it into a commercially sustainable business.
We have listed down three business cases below
Charge fees for electricity usage– Now, this is the easiest of the three. You source electricity in bulk from energy and utilities companies in bulk and charge a mark-up on your services. The pricing could vary as per location, timing and number of users.
Advertising- Since, all the charging outlets will have a digital user interface, location based advertising could bring in substantial revenues. For example, we learnt from our Bike sharing report that the biggest bike sharing operator in US, Citi Bike generates ~20-25% of its revenue from ads.
Installing chargers at supermarkets and stores- About 25-30% of urban traffic is a result of people not able to find a parking spot. If supermarkets and stores could provide charging points, it will not only increase their retail sales but also an additional revenue source. The big stores like Walmart and Target have already started making a move in this direction. Walmart plans to install 350kW charging points to 100 stores in 34 US states by June 2019.Target plans to have more than 100 charging sites in 20 US states by 2020.
INITIATIVES TAKEN BY AUTO OEMS
There is a clear co-relation between EV sales and charging infrastructure in every part of the world. And, the stakeholders most likely affected by this co-relation are the car manufacturers themselves. Furthermore, investment by OEMs also bolsters consumer trust in this new technology. Taking cognizance of this fact, Ford, BMW, Daimler, and Volkswagen Group are collaborating to construct a network of ultrafast charging stations across EU.
In Sep`18, Audi launched a new ‘e-tron Charging Service’ to enable access to 70k+ charging points by 220 providers with one card in Europe. VW`s Electrify America is currently working on expanding its EV charging station footprint in various countries across the world. In China, Xpeng Motors announced in April 2018 that it will build more than 1,000 super charging (300kW) station. Schemes like this will boost interoperability and consumer confidence in EVs, ultimately driving the EV fast charger market.
MARKET SIZE AND FORECAST
For EVs to become mainstream, the recharging times have to be at par with gas vehicles and that can only happen if fast chargers are in use everywhere. In US, the DOE (Department of Energy) wants to lower charging times to less than 15 minutes by 2028. It wants to increase the charging output to 400kW at most of the public charging stations.
The cost to set up Electric vehicle charging infrastructure has declined substantially over the past 5 years due to growth in volumes. As of 2018, the installation of Level 2 charger costs approximately $6-10K USD whereas fast chargers cost almost 7-8 times.About 19,000 ChadeMO DC fast chargers are in use globally and it will continue to grow at XX% to XX units by 2025.
A robust public private partnership is required to grow the EV fast charger market and make it commercially viable. Competition among charging providers and charger manufacturers will facilitate growth of the early infrastructure and further new product development.
In April `18, ABB beat Tesla after it unveiled its Terra High Power charger with 350 kW power output. The fast charger can replenish 200kms in 8-9 minutes. Although, it’s not practical at present because most cars have a cap on max charge limit at 50kW. But, it’s a great development for future EV products.
Oil companies are feeling the heat of EV market growth and in order to make themselves “future proof”, they have started making inroads in EV charging market. Oil companies like British Petroleum and Shell have made some big ticket investments and acquisitions. In Oct`17, Shell bought NewMotion, one of Europe`s biggest EV charging infrastructure providers.
The investment arm of Shell, Shell ventures has also made investment in Silicon Valley Start-up Ample which is working on a fast charging technology. In June `18, British Petroleum bought UK`s largest EV charging provider Chargepoint and its venture arm invested in a developer of ultra-fast charging for batteries, StoreDot. We expect many more new and interesting developments in EV fast charger market
- NEC Corporation
- Eaton Corporation
- Tritium Pty Ltd
- Signet EV
- Schneider Electric
- Siemens AG
- Efacec Electric Mobility
- GS Yuasa Corporation
- Nichicon Corporation
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