The large jump in electric vehicle (EV) demand over the past three years has brought into focus the growing importance of charging stations in key countries. Rystad Energy research shows that– at present – public charging infrastructure is not a limiting factor to the fast adoption of EVs, especially in nascent markets. In countries such as Germany, France, and Netherlands, there is no direct correlation between the growth of charging infrastructure and the number of EVs sold. Of far more significance to consumers are issues such as high fuel prices for combustion engines or high sticker prices for EVs.
Rystad Energy data, however, also shows that charging points deployment needs to ramp up if it is to reach the targets countries have set for EV adoption, which are often an integral part of net zero emission cut plans. The costs involved in reaching these targets and the new evidence about the importance of charging infrastructure (or lack thereof) calls into question these commitments and if investment might be better redirected towards more significant barriers facing EV adoption.
Rystad Energy research has found no clear correlation between BEV adoption and widespread availability of public DC charging points. In the long run as BEV adoption increases and becomes the default, the number of BEVs per charging points will need to come down. At present however, in countries such as the Netherlands and Denmark EV adoption is growing despite there being higher number of BEVS per charging point. This indicates that there are other, possibly more significant barriers to widespread BEV adoption.
Consumers seem content with home charging, particularly in locations where the average journey time is low enough that public charging is not required. Indeed, for early EV adoption, home charging is the first major requirement, followed by workplace charging and then regular public charging. However, power prices for public charging points are often higher compared to home charging, and incentives – such as off-peak power charging – are harder to avail.
Governments will need to decide if their public charging installation commitments are necessary and achievable or if viable alternatives exist. For example, California has pioneered the concept of shared-private charging whereby residents with private chargers could lease out the charger for public use and draw income from its usage. As a result, public charging points owned by the state and other companies make up only 45% of total public charging infrastructure. This has allowed the government to focus charging infrastructure funding along highways, which are mainly DC fast charging solutions
Many countries currently support non-public charging, like Germany, for example, which has a separate funding of €350 million to incentivize it. This decision has proven to be successful as more than 75% of charging now occurs at home or workplaces in the country.
“The emerging evidence shows that the availability of public charging stations, which also tend to be used less than private charging, does not influence EV adoption during the early phase of EV adoption. Given the costs involved, governments are better advised to instead focus on funding and incentives to reduce sticker price and incentivize private charging before pushing ahead on public charging initiatives”, says Abhishek Murali, analyst, Rystad Energy
China at the forefront of charging point deployment
China is leading in absolute terms with around 1.15 million charging points by the end of 2021. The country has been deploying charging stations at a staggering rate, and last year alone installed 340,000 public points. However, public charging points accounted for only around 44% of the total in the country in 2021, the rest being private charging points. Further, of the 1.15 million public points, about 41% are DC fast chargers, which take between 15 and 45 minutes to charge most EVs up to 80%—making it significantly quicker than regular Alternating Current (AC) charging stations.
The US emerges as the second largest player in this area, albeit with a much lower 107,219 charging points at the end of last year. Of this, only roughly 20% of installations are DC charging points. The country has been steadily increasing installations every year, with close to 40,000 additions in 2021. The US government, under the Bipartisan Infrastructure Law signed in November 2021, earmarked $7.5 billion to build a more reliable network of chargers. Electrify America, the country’s public charging network, is also placing special attention to deploying fast charging solutions across highways to facilitate long cross-country trips. European countries then follow with the Netherlands having installed 91,738 charging points by the end of 2021. France and Germany have significantly lower numbers of units at 62,711 and 54,653 charging points installed, respectively, although the countries are much larger markets in terms of new EV sales. Having said that, we note that more than 85% of European charging points at the end of 2021 were AC charging points. Hence, the deployment of fast DC charging infrastructure in Europe has been relatively slow. Nevertheless, Europe is starting to put a spotlight on deploying charging infrastructure, especially in the aftermath of news of the end of internal combustion engine (ICE) vehicle sales by 2035 across the European Union (EU) member countries.
Many countries have thus seen charging station year-on-year growth rates in recent years. Growth rates for the UK and the Netherlands, for example, are balancing out at around 50% as well as 35%, respectively, as seen in the chart below. Germany, however, has seen decreasing rates throughout the past few years. While in 2018, newly installed charging points increased year-on-year by 77%, in 2021 the growth rate was only 40%. China has also shown decreasing growth rates for the past three years. Charging points year-on-year growth slowed down from 72% in 2019 to 42% in 2021. The Chinese government, rather than opting to deploy charging infrastructure, implemented a model that requires companies to do so and then benefit from subsidies. This led to many companies setting up their own networks and forming partnerships with other automakers.
This chart (above) also encapsulates the early stages of EV adoption across selected countries (even for slightly more mature markets). It reveals that there is no direct correlation between the growth of charging infrastructure and the number of EVs sold. China has seen a surge in EV sales over the past three years despite the lower growth rate for public charging points deployment. On the other hand, rapid deployment of charging infrastructure in Netherlands has not resulted in the same growth for EV sales – but rather a slowdown. Norway is one of the few countries with simultaneous growth in EV sales and charging points.
A lack of public charging points has not slowed the acceleration of early EV adoption
As EV adoption in the current market is showing little sensitivity to public charging deployment, other factors should be considered. For instance, fuel prices for combustion engines or sticker prices for EVs – seem to have a larger impact on EV adoption. Also, private charging (as seen in and widely adopted by Norway) can bolster a lacking public charging infrastructure to a large extent, especially since the average range of a trip does not require extensive public charging infrastructure. In Germany, meanwhile, the average trip range per day was around 39 km, according to the governmental body BWI. In general, for early EV adoption, home charging is the first major requirement, followed by workplace charging, and then regular public charging. In addition, power prices for public charging points are often higher compared to home charging, and incentives – such as off-peak power charging – are harder to avail. However, countries such as the US, which have a very varied split of annual driving distance across different states, will need to ramp up development of fast charging stations to support EV adoption outside urban centers.
Government targets set to boost charging infrastructure can vary substantially. China for example wants its charging infrastructure to be able to support 20 million EVs by 2025. The EU, on the other hand, aims to have one million charging points set up by 2025 and 3 million by 2030. Germany declared a goal of 1 million installed charging points by 2030, equating alone to a third of the EU target. However, up until now, Germany is lagging far behind its self-set government target, with current capacity falling 470% short in the case of a linear adoption over the year. This will put pressure on the government to exponentially boost charging point buildout to be able to reach its target. Already, Germany needs to double its charging points installations to be on a linear route to reaching government goals set for 2030. The UK has set its target to 300,000 charging points by 2030. With current installations, the UK is just slightly lagging annual charging station goals. However, it is expected that with past growth rates of 50%, the UK will be well on track to reach its target by 2030.
While governments have been announcing various targets for charging points and deployment rates, focusing instead on reducing EV sticker prices via production incentives for automakers and subsidies for consumers could help break past early adoption barriers. Furthermore, deploying DC fast charging points across inter and intra-state highways to facilitate long distance travelling would lower the load on the distribution network. And deploying more public charging in areas where home charging is not possible would also help governments be better prepared for their self-imposed targets.