As the world becomes more environmentally conscious, electric vehicles are leading the charge (get it?) in the global investment towards renewable energy, but the growth of US EV Chargers is not keeping pace. By the year 2025, it is expected that 1 in 5 new cars sold will be electric worldwide, with sales doubling to 2 in 5 new cars sold by only 2030.
With the race towards electric vehicles (EVs) heating up in the auto industry, the supporting industries for EVs in the US are accelerating at a rapid pace – like EV charger potential location searchers. The biggest opportunity out there is without a doubt the growth of the US EV charger market and the micro real estate that underlies the EV chargers.
EV chargers are vital to building infrastructures around the world that can support the boom of EVs on the road. While many EV owners charge their cars at home, this still leaves a lot of demand for safe places to charge up outside the home. For instance, EV owners who take long trips, drive for work, have long commutes, or have more than EV at home are just reasons why the growth of US EV chargers is occurring outside the home – and several companies are springing up to take advantage of this wave.
With EV sales on the rise in both the commercial and consumer markets, there is no better time than the present to invest in technologies and strategies that will help you capitalize on this opportunity. Below are some overall trends to provide a broad scope of the market for the next few years.
The Current EV Charger Market
In the last year, we saw many automakers such as Ford, Toyota, and GM (not to mention upstarts like Rivian and Lucid) commit to making solely electric vehicles by the year 2035. While less than 1% of vehicles in the U.S. are currently electric, the growth of US EV chargers will make our current parking lots look unrecognizable in the decades to come.
Since EVs started to hit the market, there has been one obstacle the industry has had to overcome: range anxiety. Range anxiety is the worry that many EV owners have when driving over long distances. While the average range of EVs is currently 150-250 miles and increasing every year, there are still plenty of instances where EV owners need to charge up in the middle of a long drive or throughout the week to stay on the road.
Even if EVs accomplish a single-charge range of +400 miles, there will always be a need for EV chargers. That is why countries around the world are racing to upgrade their infrastructure to support more EVs on the road.
This is why as of 2021, the global EV charger market was worth just over $17.5B, even with less than 1% of vehicles being fully electric in the U.S. However, with the big shift to EVs all but certain, economists predict that the EV charger industry will grow to $111.9B by 2028.
The Continued Growth of US EV Chargers Must Overcome Several Obstacles in 2022 and Beyond
It can be kind of scary to turn on the news, or God forbid, look at Twitter these days. Every business, every person, every living and non-living thing is hurting from inflation. With supply-chain issues caused by Covid-19 only starting to wreak havoc on the global economy and energy prices going through the roof because of the war in Ukraine, there are plenty of reasons to be worried.
The EV charging industry is no exception to any of the woes of the chaos that we call our global economy. And in some instances, this industry is a little more susceptible to the pains of the current condition.
Shortages, Shortages, and more Shortages
When it comes to EV chargers, unfortunately, there are shortages all over the place. Outside of the current economic mess, there was already a shortage of high-skilled workers to build, install, and maintain all the EV chargers demanded by the market.
The EV charger market is also the latest victim of the computer chip shortage. These chips are used in nearly all EV chargers, which means that production has been limited in recent months.
Finally, in the spirit of keeping the planet breathable, many EV charger manufacturers are trying to make the production process environmentally friendly. While the bar for “environmentally friendly” can vary on the company and country, the goal is net-zero emissions. However, maintaining these standards has been tougher than before with the current supply-chain issues.
The Old Grid
One movie quote sums this issue up perfectly; “You’re gonna need a bigger boat.” Right now, many electrical grids around the world aren’t prepared for the switch to EVs. Because many of consumers’ energy needs don’t directly translate into electricity, like heating a home with natural gas or fueling your car with gasoline, the current energy system isn’t meant to handle the electricity demands of all the EVs entering the market.
This problem will hit large cities first. With rolling blackouts becoming more common due to the strain of climate change (e.g., increased electricity demand for AC units), the emergence of EVs and growth of US EV chargers will only add to the problem for major cities – and then, where should all of these EV chargers be located?
No matter where you are in the world, the government is slow. And no process is more agonizing or time-consuming than securing the proper permits. EV chargers are still fairly new to the market and not all countries and regions have gotten up to speed on optimizing this process. If you’re looking at an EV charger map and notice big swaths of land in the US without EV chargers, there’s a good chance you can thank the local politicians for that one. There’s also no real regulations on EV charge maintenance, so over time there are likely to be many broken EV chargers from defunct EV charger companies.
It Ain’t Cheap
Come this holiday season, you’ll remember just how expensive new technology is when you’re asked to buy the new iPhone, not for yourself. EV chargers are just the same.
While tax incentives and third-party providers can reduce the cost of adding an EV charger to commercial properties, you’re still looking in the tens of thousands per EV charger. This can also depend on the type of charger and where you plan to install it. For instance, in the European Union, the total cost of installing a Level 3 EV charger is around $150,000 when hardware, planning, and labor are included.
This doesn’t mean EV chargers are a bad investment, in fact, it’s quite the opposite. There are plenty of ways to offload the upfront costs of installing an EV charger and to use them as a source of revenue – this is why the growth of US EV chargers will continue. However, if you’re considering installing an EV charger, you should probably have a good amount of money in the bank and don’t forget about EV charger insurance.
It’s hard to find a business article that doesn’t mention the effects of Covid-19, so let’s not ignore the elephant in the room. The pandemic has permanently altered the way we do business and life. People are commuting to work less but also are getting food and products delivered at an increasing rate. So, what does this mean for the EV charger market?
In the short term, it means fewer people are driving less and less every day. This has caused an overall slowdown in the auto industry. People aren’t going to buy new cars as fast because theirs aren’t breaking down as quickly. With the shift to EVs taking a hit, the demand for EV chargers has also decreased.
In the long term, it’s still too soon to say. While the shift to EVs has already been decided by automakers such as Ford and GM, the industry’s recovery from Covid-19 is still in effect. Workers may never go back to commuting in the same numbers as before, but this may be outweighed by the high demand for delivery. While companies like FedEx are capitalizing on the shift towards electric vehicles, the consumer market might lag behind expectations in comparison.
Despite the downturn caused by Covid-19, there is only an upside for the EV charger market in the future. While near-term expectations may have taken a hit due to the pandemic, the shift towards EVs seems unstoppable. Governments and companies are preparing for the electrification of cars everywhere, and thus, EV chargers will undoubtedly continue to be in high demand.
Which Countries Are Leading the Electric Charge?
Just like teens struggling through calculus, every country is learning at its own pace when it comes to EVs and EV chargers. On the surface, consumer attitudes in different countries play a huge role in how governments around the world are responding to the call to make automobiles environmentally friendly.
In countries like the Netherlands or Finland, the attitudes towards EVs are quite positive. The Dutch community has widely been known for loving their bikes and smaller cars as means of transportation, and thus, are embracing EVs with open arms. Even countries like China, which is known as a leading global polluter, are embracing the EV industry.
In countries like the U.S., it’s a mixed bag. Americans aren’t exactly known for giving up things they love, like trans-fats, guns, and Tom Brady playing in the NFL. However, Tesla is one of the most valuable companies in the world and makes most of its vehicles in the U.S.
Who Has More EV Chargers?
Numbers don’t lie, and in this case, they put China as the #1 owner of EV chargers around the world. As of 2021, China is estimated to have 1.04 million public EV charging ports on the road, compared to only 111,000 in the U.S. and 80,000 in the Netherlands. While the Netherlands has the most EV charging ports per capita in this example, the shear rate that China is installing EV chargers is incredible.
With China adding more than 240,000 chargers in 2021, that is more than the U.S. and Netherlands’ total EV charger grid combined. China is known for its incredible ability to upgrade its infrastructure quickly due to the oversized control the government plays in running the economy. While China’s government might not play the rules of the free market, it’s hard to discredit their success.
Following China’s success, Chinese companies will be at a manufacturing advantage in years to come because they have had the ability to scale up productions, lower costs, and optimize processes all while meeting the demand of the Chinese market. Because of this, the biggest competitors in the EV charging industry will likely come from China.
How Does the growth of US EV Chargers Compare?
Home to the most valuable companies and some of the world’s larger automakers, the U.S. is poised to be a leader in the EV market, including related industries like EV chargers. However, there is plenty standing in the way of a successful transition to electrifying American roads.
While the U.S. has over 43,000 public EV charging stations with over 111,000 public EV ports, they aren’t spread out evenly across the 50 states. Unsurprisingly, California has the most EV charging stations, with over 13,000 in total. With over 30% of existing charging stations in California, that leaves huge gaps in the national infrastructure. So, it is clear there is significant growth of US EV chargers on the way.
Although every business owner outside of California should see this as an incredible opportunity, this spells problems for the U.S. Unlike China or the Netherlands which have EV charging stations strategically placed throughout the country, the U.S. is failing to make EV ownership desirable or capable.
Unless you’re in California and only plan on driving around California, owning an EV that you can use for your daily driving and for longer trips is not nearly as convenient as owning a traditional gas-powered car.
Outlook for the growth of US EV Charger Market
If you’re in the EV or EV charging business, you’re in luck. All signs are pointing in the right direction for EVs and the required infrastructure to be huge opportunities in the decades ahead. EV chargers are already a $17.5B industry and it’s expected to grow to $111.9B in just a few years.
Despite the impending boom of the broad EV market, there are some short-term obstacles that the industry must face. Like all high-end manufacturers, the effects of Covid-19 are still playing out. Consumer behaviors are shifting and shortages in materials, labor, and clean energy continue to limit the supply of EV chargers.
The EV market in the U.S. is at an exciting turning point. While other countries like China and the Netherlands have been quicker to adopt and build infrastructures for EVs, the U.S. is in a great position to capitalize on upcoming opportunities. As the home of leading automakers such as Tesla, Ford, and GM, the U.S. is nicely positioned to become a leader in EV technologies, including EV chargers – though it probably won’t come cheap.