Before there was a Route 66 in the American southwest, there was the stage coach and the train. Each mode of transport needed supporting infrastructure before it could get up and running. Now, as petroleum-based travel is giving way to electric-powered cars, new infrastructure again is necessary to support the new technologies, and there are signs the sector is beginning to gain momentum.
The market for EV charging infrastructure is expected to grow by 33 percent from 2019 to 2033 as measured by compound annual growth rate, according to U.K.-based research group Technavio.
Globally, China and the European Union are the leaders in the EV vehicle market. According to Charging ahead: Electric-vehicle infrastructure demand by McKinsey, China is on pace to dominate the number of EV and hybrid-electric cars on the road by 2030 with 26 million plug-in hybrid EVs and 49 million battery EVs. The EU is expected to have 14 million plug-in hybrid EVs in use and 15 million battery EVs and the United States, 11 million plug-in hybrid EVs and 7 million battery EVs. Asia Pacific drove the majority of growth in EV charging infrastructure with 43 percent of the market in 2018, according to Technavio.
“Though there is an increase in adoption of EVs, one of the major constraints in the market happens to be the limitations in their charging infrastructure. To overcome this hurdle, some of the major companies are focusing on developing better charging technologies,” Technavio notes.
Who will provide the charging infrastructure needed to meet this demand?
In the United Kingdom, the government’s Charging Infrastructure Investment Fund is targeting $512 million to invest with $256 million expected to come from private investment. London-based Zouk Capital was selected to run the fund. According to Renewable Energy Magazine: “The fund will be invested in U.K. companies and platforms that comprise all elements of public EV charging infrastructure in order to make a commercial return for the U.K. government and private-sector investors.”
Energy companies and utilities, meanwhile, are a natural fit to replace and/or reconfigure petroleum stations with EV charging infrastructure. Royal Dutch Shell, for example, purchased Greenlots, a startup EV charging software and services company. The company plans to use Greenlot’s technology as a foundation for its North American EV division. In the United States, meanwhile, Chevron was part of a $240 million investment in ChargePoint, a network of charging locations valued at $1.5 billion. U.S. utility American Electric Power and automaker Daimler invested in ChargePoint with the energy company.
Most innovations drive a wave of other services that pop up to support them, and demand for EV cars is leading to substantial investment in charging infrastructure and providing opportunities for investors.