In the last couple years, one by one automakers have begun spelling out their electric vehicle (EV) strategies. Ford, for example, revealed that it will invest $11 billion to develop EVs by 2022; GM plans to launch at least 20 EV models by 2023; and Toyota intends to add 10 new battery electric vehicles (BEV) worldwide by early 2020s and have electric options throughout its entire lineup by 2025.
With EVs predicted to see substantial growth, industry and other stakeholders are left with the ongoing challenge of ensuring that enough charging infrastructure is in place to meet the expected demand, support a competitive marketplace, maintain energy affordability, and preserve the reliability of the electric grid.
Government agencies, utilities, charging network companies, automakers, and even oil companies are positioning themselves in this growing sector. All see an emerging opportunity, and no one wants to be left out of a promising market. Each player is developing a slightly different strategy that aims to answer a few questions. What are the EV charging models (location, type of charging, number of stations) needed in the short term (5-10 years) and the long term (20+ years)? How and when will EV charging become financially viable? What is each player’s competitive edge over the others in the EV charging field?
Ambitious EV Adoption Forecasts Create a Massive Demand for Charging Infrastructure
While the precise numbers vary, most forecasts show a significant acceleration in EV adoption over the next decades. For example, the International Energy Agency forecasts that there will be between 125 and 220 million EVs on the road by 2030 globally, depending on which policies are implemented. That requires steep progress – in 2017, there were just over 3 million EVs worldwide. A second challenge is breaking down the demand for EV charging by location and type of charging technology. The three levels of charging currently available in the United States (Level 1, Level 2, and direct current fast charging, or DCFC) are each suited to specific locations and use cases.
Relevant Locations for Different Charging Levels
Sources: CAR Research; Howell, D, S. Boyd, B. Cunningham, S. Gillard, L. Slezak (2017). Enabling Fast Charging: A Technology Gap Assessment, DOE.
Note: The values in the table are based on the assumption that, while driving, the vehicle’s energy consumption will be 285 Wh per mile, and this does not account for charge efficiency.
There are several different connector standards for AC and DC EV charging. SAE J1772 is the most common AC connector in the U.S., and it is also used in Japan; In Europe, however, Type 2 (Memekes) is used; China uses the G/B T 20234 standard; and Tesla has its own standard for AC. For DCFC, in addition to Tesla’s DCFC connector, CHAdeMo (used mainly by Nissan, Mitsubishi, Citroen, and Peugeot), GB/T (China), and CCS (North American and Europe versions) also are used. Clearly this diversity of connectors is problematic for customers, electric vehicle service equipment (EVSE) suppliers, and other stakeholders. It is important that work continue to harmonize electric vehicle connector and communication protocol standards across regions and globally.
The development of an effective U.S. EV charging model has long-relied on a pyramid approach. Home charging provides the foundation of this pyramid. The second layer is the development of an effective workplace charging infrastructure, followed by fast charging for intra and inter-city driving. Although the ability to charge at home is critical for most EV buyers, increasingly there has been a greater focus on synergies between home and workplace charging. Some have even suggested that, with the development of very fast DCFC, the pyramid may be flipped upside down someday—with a charging model that mirrors the current gasoline station model.
Currently, about 90 percent of U.S. EV owners charge at-home overnight. Nonetheless, while many early EV buyers have access to a garage or carport to park their vehicle, at-home charging can be a challenge for those living in multi-dwelling units (MDU) or using on-street parking. For broader EV adoption, it is essential to expand charging capabilities in residential areas and find solutions for the millions of households without garages. To that end, starting in 2017, California’s building code mandates that 6 percent of parking in new non-residential areas, and 3 percent in multifamily dwellings, have the electrical capacity in place to easily install EVSE. This regulation also requires new single family homes to be wired for a EVSE. Including such requirements in building codes nationally could serves as a valuable enabler for EVs.
In workplaces and public locations, such as shopping centers, Level 2 is primarily used. Charging at work is quickly growing in importance. EV owners use it as a way to increase daily range, and corporations use it as a way to cut their carbon footprint and as an employee perk. Increasingly shopping malls, stores, and other public locations will include charging stations. Finally, while currently not widely available, DCFC is the most viable choice for EVSE stations along highway corridors. These inter-city fast chargers enable EVs to have a use pattern similar to gasoline powered vehicles.
Currently, 55,000 public charging points in 19,300 stations (including 8,800 DCFC) are available across the United States, and more are added every week. These numbers, however, are not nearly enough to support the EV growth predicted for the next decades. A Department of Energy study estimates that if, in 2030, we will have 15 million EVs in the United States, then we will need 27,000 DCFC and 600,000 Level 2 outlets in public locations. The bulk of that EV supply equipment would be needed in cities, as well as in smaller towns, rural areas, and interstate corridors. To encourage EV adoption, it is essential to increase the supply of both public charging geared towards long distance trips on highways and charging in residential and office areas.
Creating a model for where to install EVSE depends on the EV is a critical pathway problem for mass-market EV acceptance. Further, new mobility models such as car-sharing and automated, connected and electrified robo-taxis are adding to that challenge, and will likely lead to further refining of the charging infrastructure.
Various Players Are Competing and Creating Alliances on the EV Charging Market
Government agencies and a variety of private companies, including automakers, oil companies, electrical utilities, and charging network companies, are competing and sometimes collaborating to deploy EV charging infrastructure. Nevertheless, establishing a profitable business model has been especially challenging for public EV charging, because of high upfront investment costs, low and uncertain near-term demand, and competition from home charging. In addition, data on EV owner charging behavior remain limited and not sufficiently representative of future trends. Uncertainty about future demand for charging is a serious issue for investors, because it raises financing costs.
While many public agencies from the local to the federal level have taken actions regarding EVs, California is doing the most to advance the deployment of EVSE. To date, it invested 80 million in EV infrastructure and 128 million for fuel-cell infrastructure, thus funding 38 percent of charging outlets in the state. California is not the only state taking action, however, and a coalition of western states (Colorado, Nevada, Utah, Idaho, Montana, New Mexico, Wyoming, and Arizona) also is investing to create a network of fast charging stations covering 5,000 miles of roadways and 11 U.S. interstate highways. Yet there is an even bigger long-term challenge states need to address. Large EVs fleets will create additional power demand. A key issue for all governments is whether or not the new supply can come from clean, renewable sources.
The sheer size of the demand for EV charging infrastructure is both a challenge and a great business opportunity. That is why many types of organizations are interested in this market, including charging network companies, automakers, utilities, and oil companies.
Charging Networks Companies
Today, a constellation of networks operates the nation’s charging outlets under different business models. ChargePoint, the largest network in the United States and globally, is the Airbnb of EV charging. It operates the software system, payment, branding, but the hardware is individually owned and financed. For that reason, the property owners determine charging prices. Blink, on the other hand, owns the EVSE it operates for the most part. Blink uses a usage-based payment system. Other companies offer monthly subscriptions or free charging, meaning the cost is covered by a sponsor.
Automakers are increasingly active in the charging space, because the lack of infrastructure is among the greatest barriers to EV adoption. Tesla was the first company that started addressing the circular dilemma between EV adoption and charging infrastructure on a large scale. In 2012, Tesla started deploying a national network of proprietary charging stations to enable long distance travel for its vehicles. The company now has 550 Supercharger stations in the United States and wants to double that number in the near future.
Ionity is a joint venture between BMW, Daimler, Volkswagen, and Ford. Its goal is to build 400 high-power non-proprietary charging stations in Europe by 2020. These automakers chose Europe, because the continent has stronger policies in support of EVs. Ionity is an ambitious effort, a clear move to try to catch up to Tesla’s Supercharger network, which now has 400 fast charging stations in Europe.
A recent automaker-led initiative in the U.S. is Electrify America. This Volkswagen subsidiary is self-funded via fines levied against the company as part of the diesel emissions settlement in 2016. Electrify America plans to invest $800 million in charging infrastructure and other EV related initiatives over 10 years in California and $1.2 billion in other U.S. states. As announced in its initial business plan, the company intends to build 400 community stations in California. In the rest of the country, the organization is expected build 240 DCFC stations and more than 300 community stations.
The debate is ongoing about the roles utilities can play in building, owning, and maintaining EV charging infrastructure. Proponents of significant utility involvement argue that there is a need for EV charging infrastructure today to build an EV market for tomorrow, and that utilities are the only player that can finance and build this infrastructure at a scale necessary for meaningful deployment at a fast pace. Opponents argue that utility involvement would hinder competition once they enter the market.
When utilities are given the authorization to enter this market, the next question is under what specific approach. The least involved role for utility companies is to provide private citizens and companies incentives to build the EV charging infrastructure. An intermediary approach is the “make ready,” meaning that the utility builds, owns, and operates the electric infrastructure from the distribution transformer beyond the meter, the traditional line of demarcation, all the way up to the charging station. That includes the wiring, the conduit, and necessary electrical equipment up to the make-ready “stub” where the charging station would connect. Finally, the most involved role utilities can play is to fully build, own, and operate EVSE.
Across the country, many utilities are stepping up to build EV infrastructure. The California Public Utilities Commission approved $738 million in EV infrastructure proposed by PG&E, SCE and SDG&E, including charging for buses and trucks. Utilities in Maryland have recently proposed a $104 million investment in charging infrastructure that would create 24,000 charging stations across the state.
Perhaps surprisingly to some, oil companies are hedging their bets and beginning to diversify beyond liquid fuels and into EV charging. As oil companies move into the EV charging world, they will compete with utilities. While gas stations may not currently be an ideal place to charge EVs, they represent significant real estate locations, and consumers are accustomed to visiting them for refueling their vehicles. Shell has been exploring the model since 2010 and announced its intention to transition from gas stations towards energy stations. In Oct 2017, Shell bought NewMotion, Europe’s largest EV charging network. BP wants to partner with EV manufacturers and offer charging stations at its retail sites. In January 2018, BP Ventures invested $5 million in FreeWire Technologies, a U.S. company specializing in mobile EV rapid charging systems. BP said it would use the units at selected BP retail sites in the U.K. and Europe.
Still No Sign of a Long Term Model for EV Charging
Current U.S. deployment strategies for EV charging are likely to be adequate for the next five years, but they might not be enough to support substantial EV growth in the longer term. If the promise of mass-market EVs happens, the U.S. charging infrastructure must be ready to rapidly evolve and grow. While it is still difficult to predict how much charging infrastructure we will actually need (and how soon we will need it), many charging deployment models are developing, with seemingly just as many stakeholders. Clearly the competition for EVSE deployment models that can sustain the long-term projections of EV adoption are in the early stages. The CAR research team has been actively research this “business of plugging in” since 2007 and will continue to work with stakeholders to create effective solutions.
 International Energy Agency (2018). Global EV Outlook 2018.
 California Green Building Standards Code, Title 24, Part 11.
 Alternative Fuels Data Center (2018). Locate Stations.
 Department of Energy (2017). National Plug-in Electric Vehicle Infrastructure Analysis.