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EV Charging Ecosystem Research

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Executive Summary

The automotive world is preparing for a seismic shift in the coming decade, from a driving experience that centers around internal combustion engines (ICE) to one that emphasizes electric and hybrid vehicles (EVs).
By 2030, total EV sales are expected to increase ten-fold, and the global EV forecast shows a compound annual growth rate of 29 percent, with the total number of EVs on the road rising from 11 million to 145 million vehicles. To properly manage this massive change, we must first understand the ecosystem that surrounds electric cars and their underlying charging infrastructure.

Because robust charging infrastructure and ease of use are crucial to accelerating the transition from ICE to EVs, a broad and comprehensive overview of the current state of the electric vehicle charging market is critical to understanding how best to support its development into the future.

This study examines the current and anticipated infrastructure and key stakeholders of EV charging from the perspectives of private consumer and fleet managers, and identifies opportunities in the Asian, American, and European markets.

Executive Summary

The automotive world is preparing for a seismic shift in the coming decade, from a driving experience that centers around internal combustion engines (ICE) to one that emphasizes electric and hybrid vehicles (EVs).
By 2030, total EV sales are expected to increase ten-fold, and the global EV forecast shows a compound annual growth rate of 29 percent, with the total number of EVs on the road rising from 11 million to 145 million vehicles. To properly manage this massive change, we must first understand the ecosystem that surrounds electric cars and their underlying charging infrastructure.

Because robust charging infrastructure and ease of use are crucial to accelerating the transition from ICE to EVs, a broad and comprehensive overview of the current state of the electric vehicle charging market is critical to understanding how best to support its development into the future.

This study examines the current and anticipated infrastructure and key stakeholders of EV charging from the perspectives of private consumer and fleet managers, and identifies opportunities in the Asian, American, and European markets.

Electric vehicles offer the potential to disrupt the status quo relationship between transportation and oil, and offer a cleaner, better way to fuel transportation for everyone. Overall, electric vehicles can cut US oil use by 1.5 million barrels a day by 2035.

The global EV compound annual growth rate is forecasted at 29 percent over the next ten years, with total EV sales growing from 2.5 million in 2020 to 11.2 million in 2025, then reaching 31.1 million by 2030. EVs would secure approximately 32 percent of the total market share for new car sales.

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Global Electric-Car Revolution Set to Take Off
China set to lead EV market

By 2030, China will hold 49 percent of the global EV market, Europe will account for 27 percent, and the United States will hold 14 percent.

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Number of electric vehicles by region today

1.74M

million highway legal
plug-in electric cars

3.2M

plug-in electric passenger cars and light-commercial vehicles

4.5M

units, accounting for
42% of the global fleet in use.

Number of electric vehicles and charging points by region
today and in 2030

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USA

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Europe

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China

Key Players

The growth of EV use and the corresponding expansion of charging points present great opportunities for the many players engaged in the EV public charging market. These stakeholders constitute a vast network that includes manufacturers of charging equipment, installation and maintenance companies, charging station operators, site owners, electricity suppliers, and software providers that offer apps for payment, routing, and booking.

The current infrastructure for EV charging consists of a variety of different entities that each serve different functions, as well as some that operate as integrated entities.

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Fitting the Pieces Together: Industry Player Interactions 

The interactions between the different players shed light on the complexity of the charging process today, with the many functions divided between value propositions of the different players. To understand how the process can be simplified in the future, we have mapped out the interactions. We have recognized 3 different pathways of interaction the EV driver can go through, depending on how the entities are set up.

In the following diagrams, you can see the interactions between each entity and the EV driver activity across the three different pathways.  

EV driver plugs into a charging station

power

CPO

power

eMSP

power

Roaming

In this first diagram (and the most direct), the Driver interacts directly with the CPO in the form of the software used to manage the Charge Point Owner. The Charge Point Operator handles the request for charging together with the CP (Owner), who ultimately interacts with the DSO. The $13 paid by the EV Driver is distributed between these 3 players, CPO, CP and DSO, where the CP takes $10 and the DSO $3. We’re unable to measure how much money the CPO is paid per transaction and how his services impact the price, but his share of the transaction is taken from the CP’s income.

In the second pathway, the EV Driver interacts with the eMSP who, through internal agreements with the CPO, mediates the interaction. The interaction then follows the same process as in the previous pathway, except that the final verifier and handler of the charging interaction is the eMSP. For these handling services provided, the eMSP charges a 15% fee on the price, which changes the $13 distribution amongst the CPO and CP, leaving the DSO’s income untouched.

In this final pathway of interaction, the last step of complexity is present with the participation of the Roaming platform, who will mediate the interaction between eMSPs and CPOs. The EV Driver experience will be the same as in the second pathway, as the Roaming Platform only acts in internal processes, specifically in allowing the charge when there’s no existence of any internal agreement between the CPO and the eMSP in question. We’ve showcased the money distribution to be the same as in the second pathway, as we’re unable to measure the impact of the Roaming Platform fee in the price of the transaction, but we do know that both CPOs and eMSPs pay monthly fees to Roaming Platforms.

Understand The EV Private Consumer Perspective

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Charging locations

Imagine that you are taking your EV out of your home and it is fully charged. Where will your next charging?

On average, 60% of charging takes place at home, where the electricity rates are cheaper and the vehicles are parked overnight.

 For similar reasons, people also tend to charge their EVs at their places of work.

Today, less than 10% of charging is done on the road

...or at the destination

Understand The EV Private Consumer Perspective

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Charging locations

Imagine that you are taking your EV out of your home and it is fully charged. Where will your next charging?

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On average, 60% of charging takes place at home, where the electricity rates are cheaper and the vehicles are parked overnight.

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 For similar reasons, people also tend to charge their EVs at their places of work.

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Today, less than 10% of charging is done on the road

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...or at the destination

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Times of Charging

Most consumers charge their EVs at night in their garage or driveway, when the electricity rates are the lowest.

Moreover, consumers are increasingly relying on "Top Up Charging," in which they do not let their vehicle’s charge drop below 20%, nor do they “refill” above 80% because, due to the batteries’ chemistry, charging between those thresholds is most efficient.

Future Outlook

In the coming years, battery technologies are expected to improve exponentially, finally becoming capable of addressing the many challenging combinations of consumer demands: high power and high energy density, long life, low cost, excellent safety, and minimal environmental impact. Similarly, charging technologies will also continue to improve, and alternatives will drive the direction of the market. The interplay of these changes, coupled with continually increasing awareness of the need for sustainability, is expected to affect consumer behavior, making it easier for EV-hesitant drivers to “take the plunge” and leading to wider-scale adoption.

Where?

When?

How?

Today 90% of charging is done at home or at workplaces. As more EVs enter the market, these numbers are expected to decline by approximately 15%. In addition, as more and more people are going to charge their vehicles at home around the same hours, it could create an overload on the grid. All of this could increase motivation to recharge vehicles not only at home but also outside.

Thanks to improved, innovative battery technologies, EVs will be able to reach full charge in 10 minutes, comparable to the time it takes to fill a tank with gasoline. This will be another motivator for people to charge their EVs outside.

By 2025 it is expected that 163 million cars are going to be part of a subscription model, either through OEMs or by third parties. Charging will continue to trend toward frictionless, meaning that charging will be offered and handled by the subscription operator alongside other useful features such as payment, routing and booking.

Understand the Fleet Perspective

Why did we choose to look at fleets?

The importance of fleets will grow in the coming years. Electric vehicles in the United States currently comprise less than 1% of total vehicles in fleets today, whereas by 2030 there will be eight million electric vehicles in fleets, accounting for over 7%.

In terms of EV charging infrastructure expenditure, infrastructure for fleet charging will increase dramatically and take a significant share of the market's expenditures. 

EV fleets represent a particularly promising segment of the potential market for charging services, which can help fleet operators reduce their costs by making it easier to procure and manage energy in efficient ways. Furthermore, the new generation of fleet management software allows for unprecedented visibility into battery charge levels and charging resources.

Future Outlook

Our objective is to examine what the future will look like in the electric vehicle market as there is a growing number of electric fleets. Fleet management includes needs that differ from those of private consumers, which translates to a variety of additional opportunities for new players who are looking to enter the market. Our future outlook analysis includes 3 aspects: where, when, and how the EV charging infrastructure will look from the perspective of the fleet.

Where?
Charging as a service will probably be the primary model used by fleets. As the complexity of managing installation, maintenance, monitoring, combination with grid and energy storage facilities, and different EV users, most fleet managers will prefer to use a third party provider that will give them a complete and simple service package, such as charging access at the logistic depot, and the CaaS company will construct everything from scratch. In other words, fleet managers will only pay for the vehicle charging itself. 

When?
In order to schedule fleet vehicle charging, the cost of electricity, battery state, power availability and fleet tasks all need to be taken into account. For fleets with a large number of vehicles, load timing becomes a complicated task. Therefore, we expect to see increasing use of fleet management and optimization software. As EVs take up a larger and larger share of fleets, management, optimization and fleet maintenance software has a tremendous amount of room for innovation and growth.


How?
The significant load growth from an electrified commercial fleet can potentially exceed the capacity of the local existing infrastructure, requiring capital-intensive upgrades on the distribution network, and long-lead times for traditional utility upgrades. This is where microgrid solutions can help.Three primary advantages of microgrids for fleet electrification include resilience, cost savings, and carbon reduction, with varying degrees of benefit depending on the stakeholder, such as the fleet, the utility, and the general public.

The Role of OEMs

OEMs, or original equipment manufacturers are some of the most significant players in the automotive industry, established organizations with a large market share and a stable customer base. Aside from their key capabilities – car manufacturing, maintenance and installations – how are they participating in the implementation of charging infrastructure today, and what should their role be in this evolving market?  

The development of public and semi-public charging infrastructure remains uncertain; large-scale investment has yet to be made in support of public-charging infrastructure as a standalone business. While some OEMs are offering home-charging solutions with customer EV purchases and attempting to kickstart the charging market through platform integration with other eMobility ecosphere partners, the current lack of widespread public charging stations continues to be a barrier for full EV adoption due to “range anxiety”. As a result, OEMs have placed greater emphasis on hybrid vehicles, rather than on creating sufficient charging infrastructure to support EV sales.

Notable Activities to Date

Today, in general, automakers are taking part in the ecosystem of electric vehicle charging infrastructure to enable the adoption of electric vehicles. In addition, some are slowly building profitable businesses on their own, rather than treating this industry as an enabler only.

We suggest examining OEMs courses of action from three different perspectives: charging network, customer experience, and business opportunities. 

Suggested Strategies for OEMs to benefit from the EV Infrastructure Ecosystem 

Having described the current market situation as it pertains to OEM activity, we would like to suggest possible directions of action. We will address the prism of the EV infrastructure and its quality, the customer's needs that are expressed in the need for an integrative experience, and new optional business models for expanding charging capabilities.


To view all strategies offered, please download the full report.
 

 

Grid Aspects 

The increased electrification of transportation means that utilities need to be prepared, and grid operators must assess whether their systems are ready to support EV adoption. The electricity grid is the basis for charging infrastructure, and includes three main elements: production, transportation and distribution of electricity. 

The following section in the report provides a general overview of the grid and its three components. Our focus now will shift to generation.

To see the full section, click below.

Generation

The next section analyzes current electric vehicle adoption in the US. We will examine the country's current readiness to face two central challenges: power generation capacity and grid preparation for the growing demand. As another factor for analysis, we will consider the ability to meet demand during peak hours.

Our goal is to determine the capacities of the current grid, and to determine the extent to which additional capacity will be needed to enable full adoption of electric vehicles. We will use USA GRID as a case study.

To analyze if the US’s grid will be able to cope with the adoption of EV’s, we must first know what its current state is. The US currently produces 4.1 Trillion kWh of electricity annually. It's estimated that if all 276 million cars in the US were electric, their annual consumption would be 1.25 Trillion kWh (taking into account transmission and charging losses). This would mean that only a 30% increase in energy production needs to take place for the US to be able to meet the increased electricity demand caused from EVs.

How long and how difficult would it be to increase production by 30%? From 1960 to 2000, electricity production increased from 0.76 Trillion kWh to 3.8 Trillion kWh, a 400% increase during a period of 40 years. This equates to a 4% CAGR. Thus, to increase the production from 4.1 Trillion kWh to 5.35 Trillion kWh (which is what’s needed to be able to provide the extra 1.25 Trillion kWh for EV charging) would take approximately 6.5 years , assuming a 4% CAGR. This means that, from a power generation standpoint, the US will have full capability to provide for the extra electricity consumption derived from EVs in less than 7 years.

 BCG, The Costs of Revving Up the Grid for Electric Vehicles Utilities must upgrade the grid to, December 20, 2019.

Conclusion

Drive TLV conducted this study to shed light on the charging ecosystem, an unregulated market that is expected to grow substantially in the near future. The electric charging market is expected to grow sevenfold in the next seven years, together with the number of electric vehicles themselves, which is expected to grow worldwide. This is a complex ecosystem that, in addition to the barriers that exist within it, also offers opportunities for its various players. As long as the market has not yet fully developed, players should look ahead to understand how they can integrate well in the market and gain a competitive advantage, as well as effectively address the various consumer barriers that stem from the complexity of the charging process discussed above. We have compiled a number of recommendations for both existing players and new players to consider, and discuss the steps that should be taken from the standpoint of other players in the industry, such as automakers and utility companies.

Key Takeaways

The private consumer’s charging experience should be holistic and simple. 
The charging industry is crowded, unregulated, and disorganized. Typically, a customer is required to “go through,” or interact with 2-3 parties just to complete the charging process. The involvement of so many players leads to a process that is cumbersome for the end user, and that needs to be consolidated. Although we see an increase in integrations and collaborations, currently, there is no holistic user charging experience due to the fragmentation of the market.

Charging outside of home or workplace during day time will become increasingly popular. 
It is projected that the percentages of EV charging at home will decline as more public charging stations and infrastructure become available. By 2030, non-home charging is projected to grow by 30%. On-route charging, destination charging and workplace charging will become more and more prominent, resulting in a shift in the times at which people charge their vehicles, increasing the demand for charging during the off-peak hours of the day (morning and early afternoon) instead of at night.

Innovation in battery technology will change the behavioral equation.
Large battery manufacturers and startups are all working to reduce battery charging time. Addionics is one of them, a start-up company focused on innovating the architecture of batteries on a microscopic level, enhancing the battery’s capacity and reducing charging times by half. Reduction of the charging time will dramatically impact consumer behavior -- if charging will take as little as 10 minutes, we will see more “fueling-like” behavior, leading to more charging on the road, and less at home/office. Such reduction can lead to faster adoption of EVs, as this is one of the largest barriers that consumers face today.

The use of fleets is increasing, together with EV adoption, we will see many EV flees.
By its nature, a fleet is an efficient, systematic and centralized organization. The rising adoption of EVs in fleets represents huge opportunities for developing dedicated charging infrastructure. It is worth noting that although electric fleet charging is estimated to be less than 5% of the total charging infrastructure in volume, it will constitute over 30% of the total market value of the charging industry by 2030. This could bring great opportunities for players along the EV charging value chain.

Large fleets will be early adopters of mass distribution of EVs, and they will leverage all the external support they can get (CaaS, Opt. S.W, Microgrids).
Globally, organic growth in vehicle electrification is moderate, but business fleets are switching from ICE to an EVs at a much faster rate. Due to the characteristics of fleets, the deployment of an electric fleet occurs in substantial numbers. As such, innovative companies will play a major role because fleets will be early adopters of mass distribution of EVs.

Charging, from technological aspects to infrastructure participation, should be addressed by OEMs at a higher level.
A key focus for OEMs should be the life cycle charging activity, which includes static and dynamic infrastructure, expansion and density of public charging networks, and providing holistic charging experience to consumers. Life cycle charging infrastructure is critical because it will address those "pain" points for consumers that prevent them from broad adoption of electric vehicles, such as speed and adequate geographical deployment.  Due to the expected increase in public versus private charging, this point cannot be ignored. Another barrier to adopting electric vehicles is the need for a user experience that facilitates the process of charging EVs. There are many services available such asstation management and booking - each offered by different players. As a result, customer experience is suffers, and today there is no broad solution to this problem.

V2G Technology is not yet mature enough, but might have a significant impact on EV charging infrastructure in the future.

Implementation of V2G technology by an OEM in the EV car will ease authentication and billing process by PnC process. It will also improve the local load balancing management and connectivity between different charging stations, reducing the needs of many other technologies. 

Moreover, in the future, V2X technology will be able to convert the car to be a player in the energy storage ecosystem. The EV could become an energy provider for homes or buildings and even be part of the microgrid solution, offering new revenue potential on the EV value chain.

In order to overcome obstacles to EV adoption, it will be wiser to include more stakeholders in grid planning.
Grid planning and management should involve different stakeholders that cooperate towards a common goal of dealing properly with grid implications. The investment needed to prepare the grid for EV penetration is enormous, and no one has stepped up yet to take on the challenge. Since full EV adoption will take time, these large investments can therefore be planned fully in advance and implemented without a significant issue. 

One other consideration is that the problem of electricity isn't one of generation or capacity itself; rather, it's one of geographical distribution and time management. All stakeholders, whether fleet owners or utility companies, should focus their efforts on developing strategies that result in EV charging happening mostly outside of peak hours, reducing the electricity supplier’s need for investments in expanding their electricity generation capacity.

There is a gap between the growing desire for EVs, and the current rate of sufficiently supportive infrastructure.
Sustainability and climate change are at the forefront of discussion today, and we see regulations across all geographies that aim to reduce greenhouse gases emissions. Almost all developed countries are pushing vehicles to be zero-emission by 2035. The incentives provided by the various countries support not only the vehicles themselves but also the needed infrastructure to make this huge transition from an ICE to EV future a reality, while also meeting individuals' needs to switch to electric cars.

Key Takeaways

The private consumer’s charging experience should be holistic and simple. 
The charging industry is crowded, unregulated, and disorganized. Typically, a customer is required to “go through,” or interact with 2-3 parties just to complete the charging process. The involvement of so many players leads to a process that is cumbersome for the end user, and that needs to be consolidated. Although we see an increase in integrations and collaborations, currently, there is no holistic user charging experience due to the fragmentation of the market.

Charging outside of home or workplace during day time will become increasingly popular. 
It is projected that the percentages of EV charging at home will decline as more public charging stations and infrastructure become available. By 2030, non-home charging is projected to grow by 30%. On-route charging, destination charging and workplace charging will become more and more prominent, resulting in a shift in the times at which people charge their vehicles, increasing the demand for charging during the off-peak hours of the day (morning and early afternoon) instead of at night.

Innovation in battery technology will change the behavioral equation.
Large battery manufacturers and startups are all working to reduce battery charging time. Addionics is one of them, a start-up company focused on innovating the architecture of batteries on a microscopic level, enhancing the battery’s capacity and reducing charging times by half. Reduction of the charging time will dramatically impact consumer behavior -- if charging will take as little as 10 minutes, we will see more “fueling-like” behavior, leading to more charging on the road, and less at home/office. Such reduction can lead to faster adoption of EVs, as this is one of the largest barriers that consumers face today.

The use of fleets is increasing, together with EV adoption, we will see many EV flees.
By its nature, a fleet is an efficient, systematic and centralized organization. The rising adoption of EVs in fleets represents huge opportunities for developing dedicated charging infrastructure. It is worth noting that although electric fleet charging is estimated to be less than 5% of the total charging infrastructure in volume, it will constitute over 30% of the total market value of the charging industry by 2030. This could bring great opportunities for players along the EV charging value chain.

Large fleets will be early adopters of mass distribution of EVs, and they will leverage all the external support they can get (CaaS, Opt. S.W, Microgrids).
Globally, organic growth in vehicle electrification is moderate, but business fleets are switching from ICE to an EVs at a much faster rate. Due to the characteristics of fleets, the deployment of an electric fleet occurs in substantial numbers. As such, innovative companies will play a major role because fleets will be early adopters of mass distribution of EVs.

Charging, from technological aspects to infrastructure participation, should be addressed by OEMs at a higher level.
A key focus for OEMs should be the life cycle charging activity, which includes static and dynamic infrastructure, expansion and density of public charging networks, and providing holistic charging experience to consumers. Life cycle charging infrastructure is critical because it will address those "pain" points for consumers that prevent them from broad adoption of electric vehicles, such as speed and adequate geographical deployment.  Due to the expected increase in public versus private charging, this point cannot be ignored. Another barrier to adopting electric vehicles is the need for a user experience that facilitates the process of charging EVs. There are many services available such asstation management and booking - each offered by different players. As a result, customer experience is suffers, and today there is no broad solution to this problem.

V2G Technology is not yet mature enough, but might have a significant impact on EV charging infrastructure in the future.

Implementation of V2G technology by an OEM in the EV car will ease authentication and billing process by PnC process. It will also improve the local load balancing management and connectivity between different charging stations, reducing the needs of many other technologies. 

Moreover, in the future, V2X technology will be able to convert the car to be a player in the energy storage ecosystem. The EV could become an energy provider for homes or buildings and even be part of the microgrid solution, offering new revenue potential on the EV value chain.

In order to overcome obstacles to EV adoption, it will be wiser to include more stakeholders in grid planning.
Grid planning and management should involve different stakeholders that cooperate towards a common goal of dealing properly with grid implications. The investment needed to prepare the grid for EV penetration is enormous, and no one has stepped up yet to take on the challenge. Since full EV adoption will take time, these large investments can therefore be planned fully in advance and implemented without a significant issue. 

One other consideration is that the problem of electricity isn't one of generation or capacity itself; rather, it's one of geographical distribution and time management. All stakeholders, whether fleet owners or utility companies, should focus their efforts on developing strategies that result in EV charging happening mostly outside of peak hours, reducing the electricity supplier’s need for investments in expanding their electricity generation capacity.

There is a gap between the growing desire for EVs, and the current rate of sufficiently supportive infrastructure.
Sustainability and climate change are at the forefront of discussion today, and we see regulations across all geographies that aim to reduce greenhouse gases emissions. Almost all developed countries are pushing vehicles to be zero-emission by 2035. The incentives provided by the various countries support not only the vehicles themselves but also the needed infrastructure to make this huge transition from an ICE to EV future a reality, while also meeting individuals' needs to switch to electric cars.

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Best wishes,
Drive TLV's team