Innovations Happening in the Electric Vehicle Charging Space
The need for a robust charging infrastructure
Electric vehicles are speedily replacing ICE (internal combustion engine) vehicles. According to a report by the International Energy Agency, just 120,000 electric cars were sold worldwide in the year 2012. This number is less than the average number of electric cars sold every week in 2021.
At the end of 2021, there were about 16.5 million electric cars on the world’s roads, three times the number in 2018. Still, electric cars constitute less than 2% of an estimated more than 1.4 billion cars in use globally. Despite strong year-over-year growth, it’ll take several years for ICE cars to be replaced by electric ones.
A key factor restricting the growth of electric vehicles is the availability of robust charging infrastructure. Governments globally recognize this, and that’s why they are allocating billions of dollars for developing public charging infrastructure. In the U.S., President Biden has set an audacious target of making half of all new vehicle sales in 2030 to be electric. Further, the bipartisan infrastructure bill provides for $7.5 billion investment in EV charging infrastructure.
There are more than 100,000 publicly accessible EV chargers in the U.S. However, this number pales when compared to China. The number of public EV chargers in China is roughly eight times that in the U.S. Bloomberg New Energy Finance recently stated that there will be a need of between 340 million to 450 million EV chargers by 2040.
Leading EV charging companies are trying to fill the gap
EV charging companies including ChargePoint (NYSE: CHPT), Blink Charging (NASDAQ: BLNK), EVgo (NASDAQ: EVGO), and Volta (NYSE: VLTA) are constantly innovating to make EV chargers more accessible. They are using different models (owner/operator/hybrid), are targeting different segments and markets (fleets/ commercial properties/ universities/ employers/ and so on), and are exploring different revenue options (advertising).
Despite all the efforts, the companies are still not profitable. But that isn’t necessarily a big concern. The companies are focused on gaining market share and expanding footprint. As EVs grow, these companies should benefit immensely from their investments today.
Other actors are playing their part too
The innovations in the EV charging space aren’t limited to big players. PowerHero has made an adapter that gets attached to any home charger to make it a networked charger. The homeowner can then make its charger available for use to other drivers, for a fee. Like Airbnb (NASDAQ: ABNB), this concept can revolutionize the EV charging landscape by making over a million home chargers available for public use. This can potentially speed up EV adoption drastically. PowerHero’s Peer-to-Peer economy-sharing platform can solve the problem of limited public charging capacity.
A lot to look forward to
In all, existence of a robust charging infrastructure is a prerequisite for widespread EV adoption. Companies operating in this segment are finding it difficult to make money just be selling electricity. The key lies in collaborations with commercial property owners, employers, and so on, who offer EV charging as a perk. Fleet operators are also expecting increased pressure to go electric, and form another key customer segment.
Ad revenue, platforms like PlugShare, and efforts to make home chargers networked are some other avenues which companies are (or can potentially) monetizing.
Finally, we are also seeing lots of consolidation in the segment. EVgo recently acquired PlugShare, an app to locate EV charging stations, and review them. Blink Charging is also focused on acquisitions to fuel growth. Recently, it acquired SemaConnect, which significantly expands its EV charging footprint. The EV charging space should see further consolidation in the coming years. Overall, we expect exciting times ahead for EV enthusiasts and investors.