Compilation / Ma Xiaolei
Editor/ Qian Yaguang
Design / Zhao Haoran
Source/ The Economist
More and more car buyers are choosing electric vehicles.
As the cost of batteries falls, so does the price of electric vehicles. Compared to fuel cars that are more complex to drive and repair, electric vehicles are the dream of automakers who pursue a fresh driving sense.
But the shift to electric vehicles isn't just about driving pleasure. The transport sector accounts for a quarter of the world's carbon emissions, and road vehicles account for three-quarters of it.
If the world is to strive to achieve net zero carbon emissions by 2050, it needs to fully deploy electric vehicles as soon as possible. 6 million people will buy an electric car in 2021, but still only 8% of the total number of car buyers. This proportion must rise to two-thirds by 2030 and to 100% by 2050.
Many investors are assuming that this will all happen as smoothly as Tesla's acceleration. Elon Musk's Tesla Corp. has a market capitalization of more than a trillion DOLLARs, and the soaring market value of new entrants such as Rivian, who makes electric pickup trucks, proves that electric car manufacturers are also thriving.
However, outside of the high-tech"hipster cars that most clearly exemplify the EV revolution, a relentless bottleneck has emerged that even those staring at new EVs are not fully aware of.
Governments are only just beginning to perceive this problem, and that is how will all electric vehicles be charged?
The current number of public charging piles is 1.3 million, which cannot meet the needs of the world's rapidly expanding electric vehicle fleet. According to estimates by forecasting agency the International Energy Agency (IEA), 40 million public charging piles will be needed by 2030, with an additional $90 billion in investment per year. If the net zero target is to be achieved, the number of charging piles worldwide will need to increase fourfold by 2050.
Governments' current commitments to phase out fuel vehicles and switch to electric vehicles are not in line with the net-zero schedule. Still, even if the shift to electrification is not as fast as expected, the money the world needs to spend on charging infrastructure is still enormous.
At research firm Bloomberg NEF imagines that in a slower scenario, sales of electric vehicles will continue to rise as battery prices fall, but it will be difficult for electric vehicles to reach a third of total vehicle sales in 2030, and about $600 billion of investment will still be required by 2040.
The number is small and the condition is poor
According to Bloomberg NEF's forecasts, 24 million additional public charging points (309 million in total) will be added in 2040 alone. If net-zero emissions are to be achieved by 2050, Bloomberg NEF believes it will require a cumulative charging investment of up to $1.6 trillion.
In addition to the small number of public charging piles, the operation of the charging industry is also very poor. For example, the European Commission believes that on average, every 10 electric vehicles need a public charging station. According to the Boston Consulting Group (BCG), there is now an average of 5 electric vehicles and 1 public charging pile in Europe and China, while the average 9 vehicles in the United States have 1 charging pile.
This is only at the theoretical level. In practice, Volkswagen conducted a survey of charging piles in the Chinese market and found that there are many charging piles that cannot be used or "cannot be used" (intentionally or unintentionally occupied by fuel vehicles). The survey found that only 30-40% of the 1 million public charging piles in China are readily available. A similar situation exists in Europe and the United States.
In the summer of 2021, Volkswagen CEO Herbert Diess complained on the social network LinkedIn that his vacation wasn't going well because Ionity, a European charging network, offered too few charging points at Brenner Pass between Austria and Italy.
Dies wrote: "There is no quality charging experience. "Volkswagen owns a partial stake in Ionity.
The type of charging
Battery life anxiety and the availability of public charging piles are a huge problem▼
In a recent survey by consultancy AlixPartners, of the seven countries that account for 85 percent of global car sales, the price was highest in the top five reasons not to choose an electric car, with the other four being charging-related concerns.
One of the big advantages of electric vehicles is that they can be charged at home, or at work (if the company has installed charging piles).
In the U.S., 70 percent of households have on-street parking with charging piles installed (lower in Europe and China). BCG estimates that home and workplace charging accounts for nearly three-quarters of total charging energy use in the United States in 2020, seven-tenths in Europe and three-fifths in China.
Current electric vehicles typically have an endurance of about 400 kilometers. Some are more than 650 km away. According to Bank of America, the average American drives 50 kilometers a day. Europeans and Chinese this number is even smaller.
When charging at home and work, there are two types of charging piles that can meet the charging needs. One of the slowest charging stations can provide a cruising range of 8 kilometers for 1 hour. Another Type 2 charging pile provides a range of 16 km to 32 km per hour. Both types of charging piles are cheap. Car owners can use a few hundred dollars in dedicated outlets (usually subsidized by the government) and bear the cheapest electricity bills.
However, the range of charging services in homes and workplaces is limited. As electric vehicles gradually spread to people living in ordinary apartments or homes that cannot install charging piles, public charging networks become critical.
In the United States, Europe and China, the demand for public charging is expected to increase▼
There are three types of public charging piles.
A common one is curbside charging, where cars can be parked overnight by modifying lampposts or other dedicated points.
Then there's destination charging, which is becoming more and more common in parking lots in shopping malls, restaurants, movie theaters, and more. Both are Tier 2 charging piles, and the installation cost of each charging pile is usually between $2,000 and $10,000.
Fast charging typically provides a range of 100 km to 130 km every 20 minutes, which is crucial for car owners who travel long distances between cities and those who respond quickly in the city. Commercial vehicles that travel long distances, such as taxis, also need fast charging.
However, using such facilities is expensive because charging companies need to recoup the cost of $100,000 or more per fast charging pile.
Tesla's mapping software can calculate the best route on a long trip, guiding the vehicle to a dedicated network of "supercharger stations." Other new electric models have similar features.
Industry insiders in the charging industry pointed out that electric vehicle sales and charging are in their infancy. They argue that, based on the experience of just a few short years, there is no need to be pessimistic.
After all, only one in every 100 cars on the road is an electric car. Pat Romano of ChargePoint, one of the world's largest charging companies, said that from now on, the next 20 years will be the real period of growth.
Some say expansion is coming quickly. James West of Evercore ISI said that as the government steps in, there are more and more opportunities to make money charging electric car fleets, meaning "unconventional growth" is coming.
But Bank of America pointed out that how many public charging piles are needed for each electric vehicle on the road is an open question.
Yunex Traffic, which makes charging hardware, heard many different answers when asked industry insiders about the ratio of slow and fast charging piles.
Charging industry structure
Another issue is the structure of the industry.
Aakash Arora of BCG's automotive business unit calls the complex levels of charging piles a cumbersome problem. There are many parties that need to be coordinated and licensed, so the roll-out process has been slow.
First, some companies make their own charging piles, and then operators own these charging piles and make money from charging, or they may charge fees for maintaining charging piles operated by site owners.
The site owner is usually a business, other private owner or local authority that provides the location of the charging pile and collects rent from the operator who owns the charging pile. Service providers are middlemen who allow charging, who use charging piles and pay through apps or charging cards.
There are three types of companies that are dominating the field of electric vehicle charging. One is a vertically integrated automotive giant. Tesla did not disclose its investment in the supercharger network, which currently has 30,000 charging piles worldwide, and the investment could be billions of dollars.
BMW, Ford, Hyundai and Daimler and Volkswagen have all invested in Ionity, hoping to expand from 1,500 charging stations to 7,000 by 2025.
In a settlement with U.S. regulators on the "emission gate," Volkswagen founded Electrify America in 2016 and currently has 2,200 fast charging piles in the U.S.
GM said it would spend $750 million on the charging business. Its first action will be to install 40,000 charging points at the dealership.
Professional charging companies are also expanding.
In the past year, several companies have gone public. None of them are profitable, and their revenue is currently low, but their market capitalization is rising. The highest valuation (about $7 billion) is ChargePoint, which controls 44 percent of the public charging market in the U.S. and is expanding in Europe.
evBox is a Dutch company with 300,000 charging piles worldwide, including a quarter of Europe's public Tier 2 charging piles and a third of fast charging piles.
But as Bloomberg NEF's Ryan Fisher points out, over the next decade, charging companies must find a stable business model that will steadily generate profits even if the government cuts subsidies.
The third category is energy companies. Fearing losing the gas station business, they are developing a charging business. Following the acquisition of Ubitricity, a large European roadside charging company, in February 2021, Anglo-Dutch oil giant Shell said in August that it plans to launch 500,000 charging piles worldwide by 2025, including curbside charging piles and fast charging piles.
The utilities sector is also actively pushing. Wallbox, a partly owned company of Iberdrola in Spain, sells charging piles for homes and workplaces. The Electric Highway Coalition, made up of 17 U.S. power companies, plans to install fast-charging devices on inter-city routes.
The Government will act.
The new U.S. Infrastructure Law sets aside $7.5 billion for the installation of 500,000 public charging piles by 2030. The UK recently announced a mandate to install charging piles in new homes, workplaces and retail establishments, adding 145,000 per year.
Improvements in the battery should continue to provide longer endurance, thereby reducing the frequency of charging. New batteries will charge faster than old batteries, and charging piles have the same trend.
However, doubts about the accelerated development of the charging business remain.
These numbers are still known to be insignificant relative to the massive charging networks the world needs. BCG predicts that the United States, Europe and China are the countries with the most electric vehicles in the world, and by 2030, the number of public charging piles in these three countries will be about 6.5 million, which is not enough to meet the International Electrotechnical Commission's global target of 40 million.
On average, each charging pile needs to meet more vehicles, and the driver's patience will be more challenged.