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1 million publicly funded EV chargepoints in Europe by 2025 - Why and how the ‘green bounceback’ will stimulate public EV charging

There is little doubt that COVID-19 has been a difficult time for chargepoint operators (CPOs) - the majority of which are already making a loss. This is primarily due to the significant reduction in the utilisation rates of public chargepoints. In fact, according to Zap-Map, in the UK, there has been a 60% reduction of EV drivers using public chargepoints. The story will be similar across Europe with some expecting the industry to be in recovery mode until 2025. This paints a picture of doom and gloom for players involved in public charging.

But have us analysts been too quick to jump to negative conclusions? Is there actually light at the end of the tunnel for CPOs? Europe’s response to the COVID-19 crisis provides some reason for optimism and may result in the answer to these questions being ‘Yes’. By focusing first on a national level and then on an international level, I’ll explain why.

  • Individual countries’ COVID-19 stimulus packages have a strong focus on consumer incentives for electric vehicles (EV)s

COVID-19 has hit the automotive sector hard and at Delta-EE we expect overall European vehicle sales to fall by approximately 25-35% during of 2020. For the major automotive manufacturing markets, e.g. Germany, Spain and France, the negative economic impact of this needs to be addressed. And it has - in the form of stimulus packages focussing not only on providing support for vehicle manufacturing (the supply side) but also consumer incentives (the demand side). Crucially, these consumer incentives are focussed on upgrading existing EV incentives. It’s not only the aforementioned countries which are doing this – Netherlands and Austria are two countries (out of several others) which are also getting involved with upgrading their EV consumer incentives as the map below details.

overview of customer incentives to influence ev uptake

These incentives, in addition to the EU’s vehicle emissions targets and increased consumer demand for ‘green’ technologies, could result in a better than expected market share for EVs over the coming decade and, in theory, accelerate a virtuous cycle for public chargepoints. This growth in EV uptake and the resulting virtuous cycle is shown below:

total EVs on the road in Europe

covid-19 stimulus packages for EVs

  • The EU’s COVID-19 recovery plan and the ‘green bounceback’

‘Build back better’, ‘Climate-friendly expenditure’, ‘the green bounceback’… these are just a few of the terms one will come across when Googling Europe's COVID-19 recovery plans. There can be little doubt that Europe's COVID-19 recovery fund will have green strings attached. So what does this mean for public EV charging?

Whilst the whole recovery plan is disappointingly light on detail, for the transport sector it seems the focus is more on stimulating sustainable automotive manufacturing and consumer uptake rather than EV chargepoint provision. Nonetheless, policymakers haven’t forgotten about public charging and it is clear that they believe providing EV charging is a key enabler of the sustainable mobility transition (i.e. there is a concern that the chicken (EVs) will happen without the egg (public charging) in certain locations without regulatory intervention). This is evidenced in the specific mention of supporting the financing of the installation of one million charging points by 2025 in the EU’s COVID recovery document.

So while the EU’s recovery plan doesn’t suggest significant new growth for the EV charging market, it does suggest three important things:

  • There will be an acceleration towards sustainable transport, and therefore EV uptake, which is a positive for public charging (as discussed above)
  • Policymakers are conscious that public charging is a key piece of the eMobility puzzle and this political support is an important positive for the long-term health of the sector.
  • Multi-national charging networks contribute to the EU vision of connecting the 27 countries. As such, central EU funding has historically focussed on developing fast charging corridors (e.g. Ultra-E, TEN-T).

At Delta-EE, we have recognised the above and have forecasted 26% year-on-year growth (CAGR) over the decade for the UK, French and Dutch public charging sectors (the individual annual growth rates have been aggregated for the purpose of this blog post). If you like big, attention grabbing numbers this is equivalent to an overall growth of 1251% from 2020 to 2030. This growth in public charging is segmented into on-street, destination and transit as shown detailed in our 3x3 matrix below*.

compound annual growth rate

*Our full chargepoint forecasts also include home and workplace charging (segmented by employee and depot charging). Forecasts for Germany and Norway are underway.

So who are going to be the winners from this?

All public charging players could potentially benefit but I think there are two players would stand to benefit more than the average:

  • High power charging (HPC) players – The development of multi-national charging networks mentioned earlier will result in an increase of transit charging (as shown in the 3x3 matrix above) and HPC is a key part of transit charging.
  • Chargepoint manufacturers and installers – the increased chargepoint deployment will mean that more chargepoints are going to be needed. This is good news for the manufacturers and installers.

If you have any questions on, or challenges with, this blog post it would be great to hear from you! Or would like further information on our European chargepoint forecasts or on our EVs & Electricity Research Service, please don’t hesitate to get in touch.

 

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Friday, 27 November 2020

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