As part of its tracking of global trends in electromobility, SEVA noticed an important market analysis published in Reuters. It looks at the competition for prime locations in Europe and the US between companies operating EV charging stations. It provides a useful insight into the challenges in this rapidly developing sector.
Companies operating electric vehicle charging stations in Europe and the United States are beginning to compete for the best locations for public fast chargers. Experts predict more mergers and acquisitions as more large investors enter the sector. Many charging service operators are funded by long-term investors and more are expected to come. Looming restrictions on the sale of fossil fuel-based cars have made the sector more attractive to infrastructure investors such as M&G Infracapital and the Swedish company EQT.
“When we look at our customers, it now looks like a game to gain territory,” says Tomi Ristimäki, CEO of Kempower, a Finnish company that makes EV chargers. “Whoever gets the best sites now can secure sales of charging services and electricity for years to come.”
A Reuters analysis shows there are more than 900 companies providing EV chargers worldwide. Since 2012, the sector has attracted more than $12 billion in venture capital.
As large investors fund further consolidation, “the world of fast chargers is going to look quite different from the one we have today,” says Michael Hughes, chief commercial and financial officer of ChargePoint, one of the largest suppliers of equipment and software for EV chargers.
Corporations such as Volkswagen, BP and E.ON have invested heavily in the sector, which has seen 85 acquisitions since 2017 alone. There are more than 30 fast charging station operators in the UK, and two new ones launched last month: Australian firm Jolt, backed by infrastructure fund BlackRock, and Zapgo, which raised £25m from Canadian pension fund OPTrust.
In the US market, Tesla is the biggest player, but more dealer networks and fueling stations will soon be added, more than doubling the number of fast-charging networks in the US by 2030: from 25 in 2022 to 54, according to Loren McDonald, CEO of research firm EVAdoption.
It can take up to four years for a well-positioned charging station to break even, and that’s after it reaches a threshold of actual usage of around 15%. Charging station companies complain that expansion in Europe is slowed by red tape. Yet the sector is in the crosshairs of long-term infrastructure investors.
“With the right locations, long-term investment in charging companies makes sense,” says Christophe Bordes, director at Infracapital. ChargePoint’s Hughes believes larger players will start looking for new untapped locations for large charging hubs with 20 or 30 fast-charging plugs surrounded by shops and services in the short term.
“Competition for sites is already fierce,” he says, “but finding, building and securing these new locations for the next generation of fast chargers is taking longer than many people think today.” Competition for the best sites is intense, and site owners can change operators several times before deciding on a winner. “There’s no such thing as a failed deal when we’re talking about site owners,” says Brendan Jones, CEO of Blink Charging.
Companies are also vying for exclusive contracts with site owners. For example, UK company InstaVolt – owned by EQT – has agreements with companies such as McDonald’s to build charging stations at their restaurants. “If you get a partnership like that, it’s yours until you screw it up,” says InstaVolt’s CEO, Adrian Keen.
A new player in the UK market, Zapgo plans to target underserved parts of the south west of England, offering property owners a share of charging revenues to get good sites. It plans to build 4,000 chargers by 2030.
“Like all industries that have been created by a lot of small start-ups, there will be a gradual consolidation as the big players get involved,” McDonald said. “By the end of this decade, corporate logos on charging stations will be very different from what we see today.”