Rise in Investments and Consolidation in EV Charging Industry

Summary

  • Currently, EV charging companies are receiving huge investment from long term investors due to the anticipated ban on fossil fuel-powered cars in several countries.
  • Firms like Infracapital, EQT’s and ChargePoint are heavily investing in the EV sector.
  • In the race for space, larger companies are planning mega-facilities with multiple fast-charge dispensers for increased profits and market dominance.
  • The EV charging industry saw 85 acquisitions since 2017, with firms such as Volkswagen, BP, and E.ON making substantial investments.
  • In coming times, high competition will prompt site hosts to switch between operators before settling down.
  • Firms are vying for exclusive contracts to set up charging points at specific locations.
  • Forecasts predict that the number of U.S. fast-charging networks will surge to 54 in 2030 from 25 in 2022.

Investment in the EV charger arena

Many long-term investors are currently pouring money into EV charger companies, with more set to emerge. Prominent investors like Infracapital and EQT’s find the sector appealing due to the looming fossil fuel-powered car ban in various countries.

“The present EV business is immensely competitive, with everyone trying to grab the best positions. Having an optimal prime spot ensures future profits through continuous electricity sales,” remarked the CEO of Kempower.

The Changing Landscape of EV Charging Stations

With large-scale funding leading to further consolidation, Michael Hughes, Chief Commercial Officer at ChargePoint, remarks, “The face of fast-charging stations will undergo major shifts.”

Major corporations such as BP, Volkswagen, and E.ON have been investing heavily in this rapidly growing industry. Since 2017, the sector has witnessed 85 acquisitions and is seeing continuous growth.

Emerging Players and the Future Market

The United Kingdom alone hosts over 30 fast-charger operators, with two recent ones – Australia’s Jolt and Zapgo. Australia’s Jolt has the backing of BlackRock’s infrastructure fund, whereas Zapgo succeeded in securing £25 million from the Canadian pension fund OPTrust.

In the U.S., despite Tesla being a market leader, fuel stations and convenience stores are also entering the business. These additions will likely more than double the number of fast-charging networks by 2030.

Ongoing Challenges & Opportunities

Although the outlook is optimistic, the companies complain about the hurdles, mainly bureaucratic, in European expansion. However, they still have the support of long-term infrastructure investors like Infracapital, who believe in the sector’s potential.

The Race for Space

Hughes remarks that larger players are now looking beyond existing sites to establish larger, strategically located mega-facilities. Each facility, surrounded by retailers and amenities, would house up to 30 fast-charge dispensers.

However, intense competition may lead to hosts switching among operators before settling on the eventual victor. “There’s no dead deal when it comes to site hosts,” says Brendan Jones, CEO of Blink Charging.

Further Consolidation

This cutthroat competition also translates to firms such as UK’s InstaVault securing exclusive contracts to build charging stations at specific locations. Aiming at under-served areas, new entrants like Zapgo intend to lure landlords with a share of charging revenues in exchange for prime locations.

This decade will witness the market majorly controlled by those funders who hold the deepest pockets. In the words of Steve Leighton, CEO of Zapgo, “If the larger infrastructure funds show interest, they may just sweep off Zapgo at some point.”

In the U.S., companies like Walmart, Pilot Company, and Circle K are gearing up to invest massively in charging stations, expects McDonald of EVAdoption. “As in other industries established by startups, eventually, big firms enter, leading to consolidation. By decade-end, the logos on the charging stations will differ a lot,” he adds.

In conclusion, the vast investment and increasing consolidation within the EV charging sector may result in significant implications for forex trading. Assets linked to the companies involved, including EQT and ChargePoint, could potentially exhibit notable fluctuation.

($1 = 0.9307 euros)

($1 = 0.7967 pounds)

PIP Penguin
Logo