Video | Solactive AG says ‘expansion of EV charging infrastructure is going to be left to private sector’

Konrad Sippel, head of research at Solactive AG, spoke to Proactive Investors about the role of the private sector in the race to reach net zero targets.

Investment Case for Charging Infrastructure

As the battery technology has rapidly progressed in the last decade, the cost for electric vehicle (EV) batteries has dropped from USD 1200/kWh to almost 10% of its cost in 2022, [1] and the EV capacity has been improved significantly. People's focus on EV has gradually shifted from price and driving range to charging time, and numbers of charging station. 

According to the estimation of Alternative Fuels Infrastructure Directive of the European Parliament, every ten EVs will need one publicly accessible charging point. [2] Currently 80% EV owners in the U.S. have their own chargers at home, as the chargers are comparably easy to be installed in garage of detached or semi-detached houses. Another reason is leading EV manufacturers, like Tesla, provide home charging device and integrated services with low cost to enhance the customer experience. As there are a growing numbers of global EV owners from a wider income range, having more public charging points (PCP) become necessary to guarantee access to each person. 

Although the EV market share is much lower than the champion EU, China is the world’s biggest EV market with three million new EV sales and more than one million PCPs in 2021, [3] so we can see its charging infrastructure growth history as a reference to the expansion on a global scale. The number of PCPs and EVs in China increased almost hand-in-hand, keeping the ratio of EVs to PCPs stable and well below the recommended ratio of 10. To support the goal of having an EV stock of 26 million in 2030 in the U.S., roughly 2.4 million PCPs are needed, estimated by ICCT. [4] The U.S. currently has around 46,000 public charging stations and 113,000 charging outlets, [5] so we are estimating a potential market of almost 2.3 million additional new PCPs. The better news is, as a result of the Bipartisan Infrastructure Law, the U.S. government will provide USD 5 billion funding for building an EV charging network and USD 2.5 billion to support charging infrastructure. [6]

Most European countries have reached or stayed well below the recommended EV/PCP ratio as of 2020, [7] but more PCPs are required to keep the ratio healthy. The European Union currently has less than 250,000 charging stations, and it needs at least 1 million PCPs by 2025, and 3 million by 2030 to achieve its emission target, according to experts. [8] Market research projects the global electric vehicle charging station market size to grow six-fold from 2022 to 2027, at a CAGR of 44%. [9]