The electric vehicle (EV) market is experiencing unprecedented growth, with global sales of electric cars surpassing 2.1 million units in 2019, representing 2.6% of total car sales worldwide. This surge in EV adoption is driving a significant rise in the EV charging infrastructure market. The National Renewable Energy Laboratory recently reported a 7.6% increase in public electric vehicle supply equipment in just three months of 2020, underscoring the expanding demand for charging solutions.
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Government Policies and Incentives Fuel Growth
Governments around the globe are actively supporting the shift towards electric vehicles through favorable policies and subsidies. The European Union (EU) has introduced several measures, such as stringent fuel standards for trucks and cars and Clean Vehicle Directives aimed at increasing the procurement of electric buses. Similarly, France has incentivized EV purchases with grants up to €12,000, while other countries like India, the US, and the Netherlands are implementing policies designed to boost EV sales and, consequently, the market potential for EV charging infrastructure.
Cost Reductions Promote Infrastructure Expansion
Research indicates that both hardware and installation costs for EV charging stations have decreased by 50% from 2011 to 2013. This cost reduction is attributed to the growing preference for dual chargers over single-pedestal units, enabling manufacturers to adopt more viable business models. This reduction in costs has fostered a more favorable environment for the expansion of EV charging infrastructure. Additionally, the entry of new companies from various industries into the EV charging market highlights the sector’s growing prospects.
Compatibility Challenges Remain
Despite the positive trends, compatibility issues pose a significant challenge to the rapid expansion of EV charging infrastructure. The diversity in plugs and outlets means that not all EV models can use every charging station. Each station is typically linked to a specific network, creating interoperability issues that could hinder widespread adoption. These challenges are contributing to consumer reluctance to switch to electric vehicles and remain a major barrier to the growth of the charging infrastructure market.
High Demand for Fast Chargers, Cost Concerns
The demand for fast-charging infrastructure has surged due to the increasing need for high-speed charging solutions. However, the high cost of fast chargers, such as Chademo models, with installation costs in the US ranging from $4,000 to $51,000, remains a significant hurdle. This expense impacts the overall growth of EV charging infrastructure. While many organizations are installing Level 1 DC fast chargers and Level 2 AC stations, which are more affordable, the slow charger segment is also expanding due to its deployment at public and residential stations.
Asia Pacific Emerges as a Key Market
The Asia Pacific region is expected to capture a significant share of the global EV charging infrastructure market, driven by favorable government policies in rapidly developing economies such as China, India, and Japan. Japan, for example, boasts a higher number of electric charging stations compared to petrol pumps, reflecting its strong commitment to EV adoption. India aims to have approximately 1,000,000 EVs by 2024, according to the National Research Development Corporation (NRDC). European countries like the UK, France, and Belgium are also working towards improved interoperability for EVs across the region.
Impact of COVID-19 on EV Charging Infrastructure
The COVID-19 pandemic has had a profound impact on the automotive industry, leading to significant disruptions in EV production and sales, which in turn has affected the development of charging infrastructure. Logistical and supply chain issues have been major obstacles. Despite these setbacks, Europe has seen a rise in electric passenger car sales, surpassing China in terms of EV sales, indicating resilience in the market.
Strategic Collaborations by Key Market Players
Major players in the EV charging infrastructure market are focusing on strategic mergers and acquisitions to strengthen their market presence. ChargePoint, for example, has partnered with BMW Inc and Volkswagen Inc to set up fast chargers along the US west coast. Other leading companies such as AeroVironment, BP Chargemaster, and ABB are also employing similar strategies to enhance their market positions. Automotive giants like Volkswagen Group, BMW Group, and General Motors are investing in charging infrastructure to reduce fleet emissions. Additionally, collaborations between manufacturers and car rental services, such as Eaton Corp’s partnership with Green Motion, are further driving the expansion of charging infrastructure.
