Fuel For Thought: The dynamics of EV charging and its impacts on the broader electrification of mobility
Automotive Monthly Newsletter and Podcast
The dynamics of EV charging and its impacts on the broader
electrification of mobility
The automotive electrification outlook is an amalgamation of
many intertwined factors from vehicle technologies and
infrastructure availability to consumer sentiments and OEM
partnerships. Many propose this to be a “chicken-and-egg” paradox,
although S&P Global Mobility analysts believe the vehicle
(demand side) and charging stations (supply side) can be, and will
be, developed and deployed largely at the same time. While there
will be momentary shifts toward an oversupply of vehicles or an
excess demand for charging, in the long run an equilibrium will
emerge in most markets globally.
Trends on charging demand and station supply in the
North American market
By now, most OEMs have set their goals and aspirations for
partial or complete battery-electric vehicle (BEV) production,
ranging anywhere from 2030 through 2050. While the monthly BEV
production figures continue to grow globally, electric vehicles in
operation (E-VIO) is an important metric when considering charging
infrastructure planning. In 2021, S&P Global Mobility analysts
estimate 2.2 million BEVs and plug-in hybrid electric vehicles
(PHEVs) are on the road in the US market. By 2030, this number
should grow to 32 million.
If we break this number down a little bit, there are some
interesting trends regarding US state distribution. In 2021,
California made up 39.2% of all BEVs and PHEVs in operation, but by
2030, their dominance will drop to only 21.0 % of the US market
E-VIO. States such as Texas, Florida, New York, and New Jersey grow
dramatically, to account for more than 25% of the national VIO
combined.
Furthermore, the Mountain and Midwest states in the center of
the country continue to attract more BEV and PHEV adoption through
both new car sales as well as “importing” these used vehicles from
the coastal states to the interior. In fact, this is producing a
phenomenon where some US States have negative scrappage rates. This
means, more electric vehicles (EVs) are being registered than new
EV sales, accounting for an influx of used vehicles into the state
E-VIO. This not only puts a strain on OEMs to meet the demands for
BEVs and PHEVs nationwide, but also requires charging
infrastructure developers to increase their focus where charging
demand is growing fastest.
S&P Global Mobility can also break these figures down to
each state and even major metropolitan area in the US. This local
view is important because charging is installed and used on a local
basis more so than a state or national view. Cities such as
Detroit, Michigan, US are currently managing with charging
infrastructure congestion, but Dallas-Fort Worth is struggling to
keep up with the growing E-VIO demands, and both cities will
experience changes to their equilibrium over the next eight years
as EV sales continue to grow.
Charging technology requirements
Moving into charging technologies, it is important to describe
how each technology has its unique role. While AC charging is and
will be the most preferred type of charging, to address range
anxiety and faster charging, automakers have been looking at
high-voltage architectures. The 800V architecture provides
significant benefits in terms of faster charging, compact and
lightweight wirings, improved performance and efficiency, and
better energy regeneration during braking. This new trend will
allow charging rates as high as 350 kW and further reduce the
charging time to less than 20 minutes.
S&P Global Mobility analysts forecast the production of BEVs
with system voltage higher than or equal to 800V will increase at a
massive 56% compound annual growth rate (CAGR) to about 2.5 million
units in 2030, remaining a niche application during 2020-30. This
growth will largely be attributed to light commercial vehicles and
pickup trucks that feature battery capacities higher than 100 kWh
or certain premium vehicles such as Porsche Taycan. These vehicles
will require EV charging infrastructure that supports charging at
800V.
Overall, about 40% of the BEVs manufactured in 2021 were capable
of peak DC charging above 100 kW. In the short-to-medium term,
perception of vehicle charging performance will challenge consumer
acceptance of EVs until vehicle technology catches up with
performance improvements on the infrastructure side. S&P Global
Mobility analysts forecast 150 kW to be the most regularly deployed
fast-charging rate until 2025, and about 50% of the BEV production
in 2030 will be able to charge at or about 200 kW.
Charging Infrastructure deployment
By the end of 2021, there were around 4.3 million cumulative AC
charging stations deployed globally, and this should increase
exponentially to more than 65 million units by 2030, a 31% CAGR.
Similarly, there are around 200,000 cumulative DC charging stations
deployed globally, which will quadruple to more than 1 million
units by 2030. Of the AC charging stations deployed globally, more
than 80% are domestic charging stations installed in people’s
homes, and S&P Global Mobility analysts expect the trend to
continue.
The type and location of EV charging infrastructure varies
across major regions. The Greater China and European region are
leading in terms of xEV deployment and EV charging infrastructure
deployment. Today, approximately 21% of the global AC charging
stations and more than 60% of the global DC fast charging stations
are concentrated in the Greater China region.
OEMs partnering with charging players
In the interest of advancing adoption of BEVs, mainstream
automakers are partnering with charging point operators (CPOs) to
subsidize an initial service for new EV owners who are unfamiliar
and anxious about charging their vehicles. As such, OEM and CPO
partner programs have emerged to provide discounts or free charging
for a partial time frame. In the US, Electrify America has
agreements with Audi, BMW, Ford, Hyundai, Kia, Lucid,
Mercedes-Benz, Polestar, Porsche, Volkswagen and Volvo. EVgo has
current agreements with Chevrolet, Nissan, and Toyota, while
ChargePoint has an agreement with Mazda.
OEM and CPO agreements are also widespread in Europe and Asia,
where the need exists. For example, Ionity – a cross-industry
joint-venture (JV) of BMW, Ford, Hyundai, Mercedes-Benz, and
Volkswagen Group including Audi, Porsche and VW – recently
announced at VW’s Power Day, that it would collaborate with Enel X,
Iberdrola and BP to fill the demand of its users’ infrastructure
needs.
Start-up landscape on charging models
While the EV charging infrastructure market is largely driven by
established firms rapidly deploying both AC and DC charging
stations, various unique business models and charging technologies
are entering the market. Companies might prefer to focus on just
manufacturing electric vehicle supply equipment (EVSE), providing
just network and cloud-related services, or just operating the
charging station without owning the equipment among others. Also,
some firms only focus on public DC fast charging equipment
installations, while others might opt for a mixed approach to suit
larger customer needs.
While S&P Global Mobility analysts expect wireless charging
and battery swapping to be a smaller subset of the entire battery
charging ecosystem, the technology is maturing and the deployment
of such unique battery charging systems is increasing. US-based
startup Ample has made it clear that standardization of battery
packs among EVs can be beneficial for EV fleet owners. Nio, one of
mainland China’s leading EV startups, has been a pioneer in the
battery-swapping ecosystem, with more than 8 million battery swaps
at more than 900 battery-swapping stations in mainland China.
Some unique startups such as Elonroad are installing a special
wired charging system that charges vehicles while they are being
driven, transferring energy using a special setup under the vehicle
that is in contact with the charging strip on road. Such unique
ideas should further improve customer sentiments toward EV charging
and enhance EV adoption, although strong industry inertia is
flowing toward traditional charging models.
Consumer survey – major feelings of the consumers
towards charging
The S&P Global E-Mobility consumer sentiments survey found
that, while researching where EV owners routinely charge their
vehicles, only 5% of respondents answered that they charge EVs when
parked in a public/semi-public space while they are engaged in
leisure or related shopping activities; the vast majority, about
56%, of respondents said that they prefer to charge either at home
or work. Such a large difference in charging patterns indicates
that EV charging habits have yet to be fully integrated into our
lives.
While OEMs, utilities, startups, and established charging
infrastructure firms race against one another to capture a larger
share of the rapidly growing EV charging market, globally, more
than 37% of respondents suggested that the public charging
infrastructure is insufficient for their charging needs. Although
such a perception is remarkably different between regions -such as
in mainland China where EV owners rely on public charging
infrastructure for routine charging versus regions where a
dedicated parking spot in a home allows EV owners to charge at
home, making them oblivious to the public charging infrastructure.
Only 11% of EV owners in mainland China said that public charging
infrastructure is insufficient, compared to around 40% of EV owners
in Germany and the UK.
Conclusion
As the industry moves ever forward with electrification
strategies and technologies, major markets globally will see an
upending of the status quo. An incumbent demand for charging will
emerge and affect businesses, the cities’ landscape, and even our
personal driving experience. New infrastructure and new technology
will start appearing in our lives with the aim of reducing the
anxiety of the new form of mobility, while also allowing a smoother
transition toward the new refueling process.
What is important to remember is that in this likely decade-long
transition, the local impacts will be felt as strongly or stronger
than the national ones. A national or state policy may drive the
adoption of EVs or charging stations through grants, rebates or
other incentives, but the transition to a clean mobility fleet will
happen one vehicle at a time, and one charging station at a time in
the neighborhoods and garages all over the world.
_______________________________
Dive Deeper:
EV Charging Infrastructure: How
many charging points are needed and where? – LEARN MORE
Battery demand, technology
development & supply chain evolution – LEARN MORE
Average age of vehicles in the US
increases to 12.2 years – READ THE ARTICLE
Webinar Replay: Global EV Charging Outlook – WATCH NOW
Ask the expert a question – Mark
Boyadjis
Ask the expert a question – Claudio
Vittori
This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.
