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$80 billion of investment is required in order to support demand for charging infrastructure by 2025. This is a significant commercial opportunity: not just for traditional fuel providers to provide a “petrol station”-like experience, but also more premium “airport lounge”-like experiences depending on location and charging time. This range of commercial opportunity is reflected by the range of businesses currently involved in providing charging infrastructure.


investment required for charging infrastructure by 2025

The International Energy Agency has projected that between 14 million and 30 million public chargers need to be deployed globally to serve regular passenger vehicles. This compares to about 632,000 public EV charging points today: clearly a significant commercial opportunity.

Solving the recharging problem for EVs will require not only a large amount of investment, but will also require the consideration of a wide variety of issues and opportunities, including:

  • Charging speed: while a normal wall socket can replenish an EV battery overnight, this is not a universal solution for EV owners and users. While rapid-charging stations can allow 100 miles of range to be added in 35 minutes of recharging, this is still a much longer time to recharge cars than the time taken to refuel an ICE vehicle in a petrol station. However, this is changing: for example, Tesla recently unveiled its “V3 Supercharger”, which aims to add 75 miles of range in 5 minutes. Rapid recharging will be key to increasing the perceived convenience of using EVs and hence driving demand.
  • Charging standards or “interoperability”: at present, these can vary significantly. For example, Tesla’s proprietary network of “Superchargers” do not work with other car models. Even if a car can be recharged at a particular point, charging processes at different points may require a different set of adaptors, plugs, apps and subscriptions. Getting to scale quickly – or forming alliances – will be vital to simplifying the customer experience.
  • Density and location: while China has the most public charging points, the figure only represents 2 charging points per 10,000 people: this is on par with the per-capita penetration level in the US, and is significantly below the per-capita penetration in several European countries, as shown on the chart below. Achieving density – especially in metropolitan areas to start with – will be key to driving EV demand.

Electric vehicle charging points

  • Customer experience: differences in the location and charging speed of charging points will lend themselves to different customer experiences, and hence different forms of marketing, pricing and ancillary products. For example, fast-charging points offered by traditional fuel providers in existing petrol stations may (once charging speeds improve) allow for a 10 minute “petrol station-like” experience. [By contrast, charging points in alternative locations – such as shopping centres or areas with leisure and entertainment opportunities – may allow for, and encourage, a longer experience away from the car and correspondingly increased footfall and ancillary revenue.] The advent of autonomous vehicles and associated infrastructure may also change customer experiences significantly: for example, charging may become part of the package offered by car parking operators for self-parking EVs .
  • Power grid management: there are concerns that the recharging of EVs at unpredictable times – particularly peak times – may create levels of demand for electricity that might, in the worst case, lead to power shortages. Updating power transmission and distribution systems to cope with this new demand pattern will require investment by utilities companies, as well as potentially new pricing models. Developments such as smart charging (whereby EVs’ systems direct them to recharge at off-peak times when prices and demand are low), or even EV batteries which discharge power back into the grid at times of high demand when the EV is not in use, will also help.
The successful roll-out of charging infrastructure will depend on improving charging speeds, achieving sufficient density of charging points in key locations, improving customer experience, and potentially improving grid management systems in order to accommodate the demands of EV recharging.

As ever, legal requirements will be a significant driver of the size and growth of commercial opportunities. For example, in Europe, the EU’s Directive 2014/94 (the “Alternative Fuel Infrastructure Directive” or “AIFD”) requires Member States to set targets for public recharging points which would allow EVs to operate in urban and suburban areas by the end of 2020. In China, it is anticipated that 4.3 million private charging points and 500,000 public charging points will be built by 2020. In the US, there are no federal targets for the installation of EV charging stations and state level incentives vary.

Various EU Member States have:

  • legislated in different ways to meet their obligations under the AIFD,
  • set targets for the construction of charging stations and
  • rolled out different types of incentive schemes to enable the installation of charging infrastructure (public/private funds, reduced administrative burdens, mandatorily reduced grid connection pricing).

Whilst EU and Member State regulators look to industry to take the lead on developing infrastructure, “back-up” provisions have been (or in some cases, will be) enacted to ensure access to charging stations should the market not respond appropriately. Guidance of legislation from a number of EU Member States underlines the importance of “smart” and “interoperable” technology.

The EV battery lifecycle

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Stage 2:

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Powering the future:

Commercial opportunities and legal developments across the EV batteries lifecycle

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