European EV Charging: The three key issues facing the market

Mar 2020

European EV Charging: The three key issues facing the market

Mar 30, 2020

The roll out of an adequate EV charging infrastructure will play a crucial role in aiding EV adoption, and is a very significant undertaking of itself. Our recently launched European EV Charging Outlook provides in-depth analysis of the key issues and players in the market, as well as our view on how we think the market will and should develop.

This article draws on analysis from the report and outlines three key questions that the report addresses:

  • How many chargers are needed?
  • What technologies will dominate?
  • What will it cost?

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How many chargers are needed?

The chart below shows the current state of charging infrastructure in Europe expressed in terms of the number of EVs – Battery Electric (BEV) and Plug-in Hybrid (PHEV) – per public charging point. In 2019, there was roughly one charging point per eight EVs across the EU & EFTA, against a European Commission target of one charger per ten EVs.

One thing that it is important to notice about the current situation, as it provides guidance for how the market is likely to develop over time, is that the markets with a higher proportion of EVs on the road tend to have fewer charging point per EV. This is most clearly illustrated by Norway. This is reflective of the fact that charging infrastructure growth in most markets tends to lag behind EV market growth, and this is a trend we expect to continue as the market grows. As such we expect that as the market develops it’s unlikely that the EC’s target of 10 EVs per charger will be met, given the cost involved and the state of development of the market at present, we do not necessarily see this as a major issue however.

In our view, the majority of charging will continue to take place privately at homes and workplaces, with public charging limited to on-highway charging for longer journeys and opportunistic charging, such as at retail outlets that offer it as a service for customers. It is also important to remember that in Europe the ratio of plug-in hybrid vehicles to battery electrics is still relatively high, at around 35% of the market in 2019, compared to the global average of 25%. Our expectation is that PHEV charging will be even more weighted towards private charging than for BEVs. Further, looking at OEM model line-ups over the coming years, this ratio is likely to move slightly in favour of PHEVs as European OEMs get up to speed with electrification, before moving in the direction of BEVs more comprehensively later in the decade.

What technologies will come to dominate?

The reality is that a blanket target for EVs per charging point is a vague and not especially useful way to think about the charging infrastructure requirement given the range of charging technologies on the market, and those that will be available in the near future. We provide a summary table of the different charging technologies below. 

In general, the discussion about future technologies focuses on ever faster charging rates, however this is also contingent on the rate at which vehicles can actually charge, and often fails to account for the huge disparity in costs that each technology carries with it. For example, the cost for a medium 22kW AC charger is around USD3,500, a 50kW DC charger around USD30,000, and a 150+KW DC upwards of USD250,000. The reality is that the roll-out of charging infrastructure will be in part determined by vehicle capabilities and financial imperatives for those fronting the cost for the investment.

Using the same bottom-up methodology as for our battery forecasts, we expect that the majority of the 26 million EVs that will be on Europe’s roads in 2030 will have Type 2 CCS charging capabilities, and therefore have the ability to fast charge up to 50-100kW, with a minority of high-end vehicles capable of 350kW. Other charging methods are likely to be phased out at vehicle level, with the exception of the Telsa Supercharger. The chart below breakouts of our expectation of market share of the EV fleet (parc) by charging capability.

What will it cost?

The cost for the roll-out depends therefore on what you expect the level of coverage will be in terms of EVs to chargers, and what technologies will be rolled-out. In the chart below we show our forecast market share for public EV chargers over the period to 2030. This forecast is based on development in technology at the vehicle level and an assessment of what charging networks will do in terms of charging technology choices. We have also modelled the development of the BEV & PHEV fleet in Europe building on the work from our EV & Battery Quarterly Outlook. We also forecast the level of coverage in terms of EVs to charger based on our own assessment of what is viable, and through contact with charging networks and analysing their investment plans. Based on this, we forecast a cumulative cost for the roll out of EV charging in Europe of approaching USD100bn by 2030, at the charging station level, excluding upgrades to the grid and private charging.

Given this scale of investment it seems inevitable that there will be significant levels of consolidation in the charging business in the coming years, given the large number of small operators active in the market at present, as well as the entry of OEMs in a major way in order to ensure that the charging infrastructure is there to support electrification efforts needed to meet tighter emissions targets.