More EVs, more EV chargers. Who should invest, own and operate?
Electric Vehicles, having suffered a number of setbacks and repeated delays, finally appear to be making modest inroads in selected markets such as in California and Japan where a growing network of charging stations are already in place with more expected. Not surprisingly, utilities, municipalities, EV manufacturers and third parties are beginning to take notice that this may be the next big business opportunity with attractive growth prospects – assuming EV sales continue to grow.
More to come in California: Gov. Jerry Brown has set a target of 1.5 EVs by 2025 as part of state’s climate mandate
Source: Plug-in EV; Tracking progress, California Energy Commission
EV sales are gradually growing in different parts of the world driven by peculiarities of each country and market. In California, the main driver is a target for 1.5 million EVs on the road by 2025 set by the Governor Jerry Brown, mostly to reach the state’s ambitious climate law as described in March issue of this newsletter (graph on right).
In Japan, another important market, the number of EV charging stations, including fast-chargers and those installed in homes, has already reached 40,000 – exceeding the number of gas stations, which are around 34,000, according to Nissan, the maker of popular all-electric Leaf. A densely populated country, Japan is poised to see rapid uptake of EVs as its car manufacturers are looking beyond its borders for new export markets.
Leaf is among the world’s most successful EVs, selling 160,000 cars globally since its launch in 2011. According to Nissan, its biggest markets are the US with over 30,000 sales followed by Europe at 15,000 in 2014 alone. Tesla, based in Palo Alto California, has been a great success in the US, California in particular, but its sales remain limited simply because the company cannot manufacture them fast enough to meet the strong demand.
Looking ahead, projections of sales figures for EVs vary. Navigant Research, for example, predicts the number of plug-in EVs (PEVs) to reach 12 million globally by 2023. Even discounting the numbers, it suggests a growing market for EV charging services is likely to continue to evolve as it responds to growing demand.
More EVs need more chargers: Number of US public electric vehicle charging stations, 2005-13
Source: 2015 Factbook: Sustainable energy in America, Bloomberg New Energy Finance & Business Council for sustainable energy, Feb 2015
The same study predicts that worldwide revenue from EV charging services will grow from a negligible $152.6 million annually in 2015 to $2.9 billion by 2023. According to Lisa Jerram, study’s principal analyst, “Sales of EV charging systems are expected to grow steadily in the coming years, surpassing 2.5 million by 2023,” adding, “That represents a significant market for providers of charging systems.”
The residential charging market has entered a phase where the focus is on bringing down the price rather than on including innovative new features. The commercial charging market, by contrast, continues to be in a state of flux as competing manufacturers test various designs and business models especially for the public charging market.
The EV charging infrastructure is moving along different paths in different counties depending on the regulatory and policy directions. In some countries, public charging is being promoted as a public good or essential service while in others they are built, owned and operated by automakers or monopoly utilities. Regulation and policy clearly does matter. Lack of clear direction creates uncertainty and delays the uptake of EVs.
As further described in the March 2015 issue of this newsletter, the regulators in different parts of the US are reaching somewhat divergent and contradictory views on who should invest in EV charging stations, sometimes not sure which way would provide better, faster and cheaper services.
Published Originally in EEnergy Informer: The International Energy Newsletter April 2015 Issue.
