Utilities, automakers and big oil companies will drive the deployment of electric vehicle charging infrastructure, according to a new report by EY, which warns that despite market uncertainty, investment needs to be made or “it’s highly likely they’ll be late to the party”.
‘Driving the electric vehicle revolution’, released as part of the consultancy’s Renewable Energy Country Attractiveness Index (RECAI) publication, suggests that the key investors in the future of e-mobility have already been determined.
However, they face considerable uncertainty over how quickly EVs will displace traditional vehicles, and how what forms of charging will actually be required. Investment now could see heavy losses from low utilisation, or lead to stranded assets if the wrong charging infrastructure is deployed.
Much has been made of the split between home, workplace and destination, and public charging networks, with many in the UK sector expecting public charging to be the least utilisation option.
However, those deploying such infrastructure have suggested that this will be needed to solve the issue of range anxiety for drivers concerned their EVs won’t make the distances required, while also being used to meet current driving behaviour which sees people ‘fill up’ at petrol station-like EV charging hubs.
According to Michael Cahill, management consultant at EY, the danger to any investors in this space will be in not acting soon enough to capture a portion of the market.
“If they don’t invest now, it’s highly likely they’ll be late to the party. But, equally, players might not want to risk investing too early and narrowly in a market where technology and policy is constantly developing,” he said.
A number of those able to do so have already made such moves across the utility, automotive OEMs and oil and gas sectors as competition has already begun to take hold.
For the former, EY says the opportunity lies in making use of a new source of demand to which utilities can sell electricity while also increasing their business interactions with customers. In the UK, this has been evidenced most recently by the launch of an end-to-end EV package by ScottishPower, which has partnered with a car dealership to offer drivers an EV of their choice with an installation of a home charger, powered with green electricity.
Similarly Sweden’s Vattenfall has its own InCharge offer, E.On recently launched its own charging business and tariff and EDF Group recently took aim at the competition with a pledge to become Europe’s leading e-mobility energy company within four years.
While this could pose issues for some of the utilities, particularly those like Vattenfall which operate networks, integrating charging intelligently is likely to offer a positive asset to their business by providing some stability control as renewables penetration grows in countries around the world.
Vehicle-to-grid will offer such an opportunity with, EDF Energy recently announcing an upcoming launch of a V2G offer with Nuvve.
Automakers are also using this technology as a way into the market, with Carl Bayliss, head of EV and energy services business development at Nissan – the automaker involved in two V2G innovation projects in the UK – saying this week: “We will very quickly find that the proof of concept and the business models that we are looking to validate will be very easy to bring to market.”
The likes of Nissan, and other ‘transport sector incumbents’ as EY calls them, will also be able need to take action of EV charging infrastructure to ensure their vehicles are well served once on the road. A number have already made this move, with Tesla establishing its own rapid network dedicated to its customers.
Similarly, IONITY – a joint venture launched by BMW Group, Daimler, the Ford Motor Company and the Volkswagen Group – is rolling out 400 high speed chargers across Europe to guarantee that the EV models to be launched in the coming years have charging infrastructure already in place.
This is also why the 350kW chargers from Tritium being installed despite no current vehicles on the market being able to take full advantage of the charging speed.
This is being done alongside oil companies, identified by EY as the final main group able to invest in this emerging sector, with Shell to receive IONITY chargers at 80 of its locations. Many of these companies have already begun to flex their buying power, such as BP which this year bought UK charging network operator Chargemaster for £130 million.
In addition to its work with IONITY, Shell purchased Dutch-based charging provider NewMotion, while Total recently bought French firm G2mobility and partnered with ChargePoint to offer its business customers in the UK EV charging solutions.
Despite these early moves across the charging sector, EY have warned that risk mitigation will be required to ensure the right decisions are made at this early stage, alongside a full understanding of the sector.
Samuel Pachoud, advisory senior manager at EY, said: “Fundamentally, investors in the space need to understand the full ecosystem – electric vehicles, charging infrastructure, grid services, energy storage and connected services – before identifying commercially viable business models and injecting investment at scale. Convergence at customer, technology and infrastructure levels will provide the opportunity.”
