The EV Charging Industry Chain in Europe and US Urgently Needs a Breakthrough
As the penetration rate of new energy vehicles (NEVs) in the global market continues to rise, some regional markets are shifting the driving force for promoting industrial development from aggressive subsidy policies to charging infrastructure construction. Especially for the US and European markets, where the construction speed of charging piles lags far behind the growth in EV sales. Alleviating the constraints of insufficient supporting facilities on industrial development has become an urgent issue that needs to be addressed.
A Huge Gap in Vehicle-to-Charger Ratio
For the development of the US EV market, the severely lagging construction of charging infrastructure has become a key factor limiting its growth. Data shows that in 2022, although the penetration rate of NEVs in the US has jumped to about 6%, the vehicle-to-charger ratio surged to 17:1. Faced with such an imbalanced supply gap, some third-party institutions believe that the previously planned construction plan of 500,000 public charging piles in the market is obviously insufficient. In the next three years, the compound growth rate of the US public charging pile market is expected to reach 80%, with the market scale expanding to US$19.1 billion.
Therefore, after focusing on the localization of EV and battery assembly production under the framework of the Inflation Deflation Act, Washington D.C. has turned its attention to the field of charging piles. On February 15, the US government officially issued new regulations for the national EV charging facility network, requiring that all charging piles built with federal government funding must be produced and assembled locally. The goal is to build a charging pile industry chain with a local share of no less than 55% by July 2024.
Coincidentally, the trend of "disconnection" between EV growth and charging infrastructure development in Europe is also evident. According to the European Automobile Manufacturers Association (ACEA)'s tracking report on the construction of EV charging infrastructure in the region: between 2016 and 2022, the share of battery electric vehicles (BEVs) in the EU market will expand to 12.1%. Although the number of public charging piles in the period increased sixfold, but this growth was far outpaced by the 18-fold surge in BEV sales. The unsatisfactory consumer experience caused by charging problems has also posed additional challenges to the promotion of BEVs in the region. ACEA also stated in the report that to convince more European consumers into switching to EVs within the next decade, "charging must become as convenient as refueling."
Although the agreement to stop selling new fossil fuel vehicles in Europe by 2035 has not yet been fully legislated, optimistic forecasts from all parties in the EU on the number of NEVs in the region have been reported in the news. According to the International Energy Agency (IEA), by 2025, the number of NEVs in the EU is expected to reach 21.9 million, with a compound annual growth rate of 41% from 2021 to 2025. Another agency predicts that in the next decade, the demand for charging piles in Europe will increase from EUR 5 billion in 2021 to EUR 15 billion.
Uneven Development of Charging Pile
Setting aside the impact of the rapid growth of EVs, the development of charging infrastructure in the respective regional markets of the U.S. and Europe is not "slow". According to data from the U.S. Department of Energy's Alternative Fuels Data Center (AFDC), by the end of 2022, the number of EV supply equipment (EVSE) ports in the country increased to 143,000, up 11.7% year-on-year. The total number of charging stations rose to 53,000, an increase of about 6% year-on-year. The operation of charging infrastructure mentioned in the EU Act "Alternative Fuel Supply Infrastructure Deployment Directive (AFIR)" shows that by the fourth quarter of 2022, there will be a total of 479,000 charging piles across the 27 EU member states, of which 422,000 are AC and 57,000 are DC.
Currently, based on charging capacity, charging piles in the U.S. and European markets can be divided into AC slow charging and DC fast charging. Among them, AC slow charging piles account for about 80% in the US market, and the development is extremely uneven. Take ChargePoint, the largest charging network operator in the U.S. market, as an example. It is understood that although it has approximately 51.5% of the U.S. charging pile market share, most of the more than 68,000 charging piles it operates are still Level 1 and 2 AC slow charging piles designed for commercial use on workdays. Only about 1,500 Level 3 DC chargers are available to meet the needs of EV users for cross-state long-distance travel, leaving significant gaps in the charging network. In terms of DC fast charging, Tesla dominates， with its 17,000 fast chargers capturing approximately 58% of the market share
The imbalance of the proportion of fast and slow charging piles in Europe is more extreme. Today, AC charging piles of 22kW and below account for about 88% of the regional market, while level 1 and 2 ultra-fast DC charging piles with power levels above 150kW account for only about 4.7%. However, charging pile manufacturers and operators that provide public services in the market are working to address this extreme imbalance. The German P3 consulting company conducted a study on the construction of charging networks in some European countries in 2022. The results showed that compared with the statistics in 2021, the charging network coverage provided by the top charging service providers in Europe has increased by 35%. The growth rate of some third-party service providers is even more significant. The charging service of EnBW mobility+ has grown by 60% in one year.
However, in addition to the above-mentioned development divergence of the charging pile network, the uneven distribution of charging piles is a common issue in both markets. In the U.S., the total number of charging piles in economically developed coastal areas such as California, Texas, and Florida far exceeds that of other states, while the construction of charging piles along the inland highway network is progressing slowly. At the same time, some state government regulations are accelerating the concentration of charging pile construction in specific areas. For example, California stipulates that residential parking lots with more than 17 households must reserve at least 3% of the area for EV charging piles construction.
In Europe, the Netherlands has become the market with the most complete charging infrastructure in the EU with 112,000 charging piles, followed by Germany with 87,000. The two countries account for 42% of the charging pile facilities in the EU. Compared with the density of one charging pile per 1.5 kilometers of roads in the Netherlands, countries such as Poland and Romania only have one charging pile per 150 kilometers. In this regard, ACEA had to state that according to the current average range of 326 kilometers for BEVs, the existing charging pile ratio may be sufficient to meet daily commuting or short-distance travel, but it is still far from enough to achieve cross-border travel in Europe. In response, Eurelectric (the European electricity industry alliance) believes that the European region needs to update the charging facility construction plan in terms of policy, and in addition to the plan required by the "fit for 55" environmental protection and emission reduction package being promoted in the region, "each member state ensures that one EV charging facility is established every 60 kilometers on major roads", a new plan should be formulated to cope with the possible surge in the number of EVs and consumer charging demand.
Exploring Paths to Interconnectivity
Although there are still various problems in the development of charging pile markets in the U.S. and Europe, and even due to the slow communication and coordination between government departments, power supply agencies, automakers and charging service providers, it is difficult to quickly achieve a large-scale layout of charging infrastructure, resulting in significant pressure in the rapid development of EVs. Fortunately, all parties are also working hard to explore the interconnection trend of various charging pile systems.
The first is the interconnection of charging pile interfaces. Tesla has initiated an interface unification process led by corporate operators in the US market. It is reported that Tesla expects to open all 3,500 of its supercharging stations along highways and 4,000 commercial low-speed charging stations in the North American market to the public by the end of 2024, making them accessible to other EV models. The head of Tesla's energy department once stated that "opening charging piles to the public can increase the utilization rate of the charging network to save operating costs and make the charging network more profitable." However, due to the obvious differences between the company's DC fast charging network and other charging networks in the U.S., as well as incompatibility with the CCS (Combined Charging System) under federal standards, the achievement of this goal remains uncertain. Some people believe that Tesla's move is a strategic adjustment in response to the US government's " National Electric Vehicle Infrastructure (NEVI) Program " to prevent other charging network operators from taking this opportunity to seize the market, such as EVgo and ChargePoint.
The charging pile market in Europe shows a trend toward integrating and unifying pricing and payment models. In the aforementioned study of the European charging network, German P3 Consulting found that many European countries have unclear charging pile business models: some service providers charge based on the evaluation criteria of charging pile power, charging volume or charging time, while others use a combination of registration fees, monthly rents, charging fees, service fees, etc. for tiered pricing. This means that even if the same charging pile is used for charging, users will incur huge differences in charging costs due to fluctuations in electricity prices, differences in service providers, and varying payment standards. In addition, the European Court of Auditors' review report on the charging infrastructure of EU member states also shows that the varying availability of public charging piles and inconsistent payment systems among member states also pose many unnecessary challenges for EV consumers, such as the lack of real-time information on the charging infrastructure networking data, and the inability to track information about charging pile failures or waiting in line in real time.
In contrast, China's charging pile industry chain, backed by the world's largest EV market, focuses on exploring the coordinated development of charging facility service platforms and power grids in terms of interconnection. During the 2023 National People's Congress, Shao Danwei, a member of the National Committee of the Chinese People's Political Consultative Conference, founder of Star Charge, and chairman of Wanbang Digital Energy, proposed building a unified charging monitoring platform across the country, integrating and accessing data from various charging facilities and new energy enterprise operation platforms, and providing support for the large-scale optimization of charging resources. She also suggested using real-time price signals to guide NEVs to participate in vehicle-grid interaction, thereby improving the power market operation mechanism.
