Table of contents
The European EV charging market comprises businesses engaged in the development, production, installation and/or operation of hardware and software for electric vehicle charging. We segmented the market along the value chain into: (i) charger producers, (ii) charge point operators and (iii) smart charging platforms.
The European landscape has a fragmented nature across subsegments, typically characterised by national leaders, large utility and oil companies with specialist EV divisions as well as a long tail of regional specialists. Industry executives (interviews by Gain.pro) foresee consolidation to pick up in the coming years. New regulations will require significant software investments (e.g. to improve cybersecurity), increasing entry barriers, whereas smaller incumbents might be pushed out of the market in case sufficient funding cannot be secured until a commercially viable scale has been reached.
PE-led interest has been strong with ~80% of identified assets being sponsor-backed (August 2023). As the broader EV charging market matures, players can capitalise on (i) increasingly predictable and stable cash flows, (ii) soaring utilisation rates, (iii) shorter payback periods and (iv) favourable regulations to boost EV adoption in line with the EU’s sustainability goals.
ESG topics in the EV charging market primarily relate to environmental and social issues. From an environmental perspective, players are increasingly committing to (solely) using renewables as the main energy source. Another area of attention relates to emissions stemming from the manufacturing and transportation of charging hardware. On the social side, incumbents must continuously invest in cybersecurity, as digital breaches could lead to system blackouts, damages to the entire electrical grid as well as consumer identity theft.
According to ChargeUp Europe (May 2023), the number of charging points across the EU-27 countries will increase from ~5m units in 2022 to ~35m units by 2030, representing a ~28% CAGR from 2022-2030
Industry executives (interviews by Gain.pro) estimate that the European EV charging market will grow at a ~30-40% CAGR in the next couple of years. Charger-wise, the highest growth rates will be recorded in the DC vertical, while South Europe and CEE are anticipated to be the most attractive growth regions (interviews by Gain.pro)
According to Bain & Company (July 2022), the European EV charging market will grow from ~€7-8bn in 2021 to ~€40-55bn in 2030, registering a <26% CAGR from 2021-2030
Fast-growing number of EVs which need charging capacity (interviews by Gain.pro). Underlying drivers come from both the supply- (e.g. BMW expecting ~50% of sales to be electric before 2030; Protocol, October 2022) and demand side (e.g. EU banning sales of new petrol and diesel cars as of 2035; Reuters, February 2023). From 2021-2030, the penetration rate of new electric vehicles in Europe will grow from ~12% to ~67%, thereby surpassing both China and the US (Citi, January 2023)
Favourable regulatory measures speeding up the rollout of charging stations (interviews by Gain.pro). A recent example is the agreement between the European Parliament and the European Council, defining targets for the deployment of publicly accessible electric charging stations at least every 60km along the core TEN-T network by 2026 (European Parliament, March 2023)
New growth opportunities for CPOs stemming from additional revenue streams. An illustrative example is ChargePoint (US) which plans to install ~10,000 ad display points in 10 markets in 2023 (Retail Consumer Experience, August 2022). The lucrativeness of this advertising model was further confirmed by the recent acquisition of ad-focused CPO Volta by Shell (Shell, March 2023)
Limited land and space availability dampen growth as the addressable market is bounded (interviews by Gain.pro; ChargeUp Europe, May 2023). A notable example is the limited availability of EU fast charging station tenders
Increasing commoditisation leads to growing price pressure on both hardware and software producers. The severity of this trend is illustrated by Chinese manufacturers, supplying 50kW DC chargers at one-fifth of the average price charged by European players (interviews by Gain.pro; BCG, April 2021)
Capacity problems within local governments, which are responsible for rolling out EV plans. Industry experts (interviews by Gain.pro) foresee project waiting times to further increase, with tender applications being processed at an increasingly slower rate aside from frequent permit and subsidy delays
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