As electric vehicles flood the market, charging network remains stuck in low gear

Electric vehicles are ready for Europe, but is Europe ready for them?

Driven by emissions regulations and incentives, electric cars are starting to flood the European market. Yet many buyers who would otherwise make the switch to electric are holding back. Cost remains an issue, but concerns about the public charging network loom equally large.

"Charging is one of two key factors that drives consumer sentiment, along with affordability," said Martin Koehring, senior manager for sustainability, climate change and natural resources at Economist Impact, which has studied EV readiness among nine western European countries and China.

Koehring said 38 percent of all British consumers have expressed dissatisfaction with the charging network, and "that is clearly one of the reasons why only a quarter of UK consumers actually are considering switching to an EV."

A scathing report in May from the European Court of Auditors on the EU's support for public charging infrastructure found that "on top of higher vehicle purchase costs, the lack of charging and refueling stations is holding back the market development of alternative fuels."

The EU, which has made improving the charging network a pillar of its European Green Deal environmental strategy, is far from reaching its policy objective "to make electric vehicle charging as easy as filling a conventional vehicle tank," the auditors said.

"The EU is still a long way off its ambitious Green Deal target of 1 million charging points by 2025, and it lacks an overall strategic roadmap for electromobility," the report found.

It's not necessarily the number of charging points that is lacking, Koehring and other analysts say, but that the existing network does not meet consumers' needs in terms of charging speed, reliability, ease of use, location and a seamless payment experience. 

"If you’re not a Tesla owner, then you have this struggle where you drive somewhere and either the chargers are busy or they don't work, or you have different payment systems," said Arturs Smilkstins, a partner at Boston Consulting Group in London, citing common complaints. 

Tesla owners benefit from the company's own network of fast-charging stations, which was free for early buyers and until now has been limited only to Teslas. The automaker has just started a pilot project in the Netherlands to open the network to other EV brands.

A consumer-friendly charging network may have an impact on EV uptake, experts who have studied the issue say. Interest in buying an EV is generally highest in countries with the most charging points, the most points per vehicle and the most powerful network. (see charts, below)

For example, 56 percent of drivers in the Netherlands, which has the most charging points in Europe, say they are willing to buy an EV in the next five years, followed by 48 percent in Sweden and 47 percent in China, Economist Impact found in its recent EV readiness report. 

But it is not a perfect correlation. Forty-one percent of drivers in Spain, which ranks low in number of charging points and power delivery, say they would consider an EV, ranking fourth in the Economist Impact study.

Al Bedwell, global powertrain analyst at LMC Automotive, says the reason for this apparent discrepancy is that public charging just isn’t a big issue yet, because most EV owners still charge at home or work. 

According to a study in the Journal of Transportation Research, only 10 percent of charging events (including both full-electric vehicles and plug-in hybrids) occur at public locations. 

But that will change as more urban dwellers buy full-electric cars, and more people use EVs as their primary vehicles. 

Public charging will increase from 25 percent of all charging in 2020 to 50 percent in 2030, according to Allego, a Dutch company that operates 26,000 charging points in Europe. Allego went public this summer through a merger with a Special Purpose Acquisition Company (SPAC) at an enterprise value of $3.14 billion.

BCG has termed the current state of the charging infrastructure "early stage open-market chaos." Energy companies, national and local governments, automakers and startups are all jousting to eventually replace the approximately 123,000 internal-combustion fuel stations along Europe’s streets, roads and highways. 

Globally, the charging market could be worth 1 to 2 trillion euros a year by 2030, and 4 to 8 trillion euros by 2050, a report from has-to-be eMobility, a charging company in which Volkswagen Group holds a minority stake. 

"The market is highly fragmented with intense competition for market share and direct customer access," the report said. 

In a sign of the rapidly shifting charging infrastructure environment, has-to-be eMobility was acquired by a competitor, ChargePoint, in early October, at a deal valued at 250 million euros. With the acquisition, ChargePoint says it now operates more than 150,000 charging points in North America and Europe.

Independent companies such as Allego and ChargePoint, which have thousands of charging points already on the ground, are banding together with energy providers such as BP, Shell and TotalEnergies to make their voices heard in Brussels as it dictates energy policies to achieve carbon neutrality by 2050. 

They are part of ChargeUp Europe, a lobbying group that started a year ago and represents more than 500,000 charging points across the EU.

"We want to make sure we have our own seat at the table," said Arne Richters, head of public affairs and communication at Allego. 

Richters said private industry was best placed to build out charging infrastructure, rather than public authorities, whose role should be to think holistically about what kind of network they want and then create detailed, sustainable public tenders.

“In the Netherlands, where you see most of the public charging infrastructure being realized, none of that was funded by public authorities," Richters said. "All of that was funded by private market parties, on public lands nonetheless, with really strict criteria in terms of how you operate."

Richters is cautious about automakers' direct involvement in charging infrastructure. 

"It sounds easy to do, but it's not, especially when fast charging these vehicles, because you need to calibrate the infrastructure to the vehicle side," he said, "and it comes down to very precise communication protocols that you need to adhere to, because you have a direct link to the battery and you're pushing in huge volumes of electricity fast." 

No other automaker has yet followed Tesla's lead, although many are partnering with outside companies -- and even competitors -- to build out the network. 

The best-known initiative in Europe is Ionity, a consortium of seven automakers (BMW, Ford, Hyundai Motor, Daimler/Mercedes-Benz, VW, Audi and Porsche) that is building a highway network of ultra-fast (350 kW) charging stations.

Ionity currently has 400 stations with a total of 2,400 charging points, largely in northern and central Europe. Just this month, Ionity said it would be the first open network with the Plug & Charge feature, in which the vehicle and its charging contracts are automatically identified by plugging in at a station. 

Among non-Tesla brands, Mercedes is perhaps most actively involved in charging. In addition to Ionity -- available at a reduced price for owners -- initiatives include:

• Mercedes Me charging, which gives connected access to more than 200,000 points in Europe alone
• A 33 percent share, with partners BMW and BP, in Digital Charging Solutions, which integrates charging into vehicles operating systems. Mercedes says this gives EV drivers access to 9,000 fast and ultra-fast charging points operated by BP in Europe
• A partnership with Shell to expand charging networks, with "enhanced access" to the energy giant’s global Recharge network of 30,000 charge points
• The launch of "premium" charging sites in Europe that will offer a “bespoke charging experience with top-notch facilities.”

Meanwhile, in the U.S., GM plans to spend $750 million on charging in the coming years, starting with the installation of 40,000 Ultium-branded points at dealerships.

Stellantis has also recently announced two collaborative efforts: One, the Atlante Project, aims to set up a network of fast-charging (100 to 175 kW) stations that uses vehicle-to-grid technology to increase the share of renewable energy. Atlante is part of Free2Move eSolutions, a joint venture with NHOA Energy (formerly Engie EPS).

In contrast to Ionity, the project will serve the southern European market (France, Italy, Spain, Portugal) where charging stations are relatively scarce compared with northern Europe and Scandinavia.

NHOA and Free2Move say at least 90 percent of the network in the region has yet to be built; Atlante hopes to capture 15 percent of the market in the area.

Atlante's first station opened in mid-October in Italy’s Piedmont region, the first of 35,000 charge points due by 2030.

Stellantis also aims to create another network of "destination charging" stations at sites such as movie theaters, shopping malls or hotels, through a just-announced partnership with TheF, an Italian startup. More than 15,000 "quick-charging" (50 kW) stations are planned.

The two networks will offer “preferred conditions” for owners of Stellantis vehicles, said Anne-Lise Richard, vice president global e-mobility at Stellantis. She said they would be branded as Stellantis stations.

Stellantis is not investing upfront in the projects, Richard said, which are intended primarily to expand the charging network in underserved areas and also to "co-design the experience that we want our customers to have in this infrastructure." 

Charging "is one of the main items that customers point out as a pain point as to why they are not adopting EVs," Richard said. "We think of public charging and infrastructure as an enabler; it doesn't mean that if you do not have it, you can't sell EVs at all, but it helps customers project themselves into life with an electrified vehicle."

Experts say that while consumers may be frustrated now, the situation should improve well before 2030, the next big step down in emissions targets in the EU.

Said LMC's Bedwell: "Our BEV (battery-electric vehicle) forecast makes the assumption that it will be in the 2026 to 2028 time frame before adequate charging infrastructure will exist across the region, and this forecast driver turns from net negative to net positive."

The EU's guiding document on charging stations has been the 2014 directive on Alternative Fuels Infrastructure, or AFID, which called only for a density of one charge point for every 10 electric cars. 

But the AFID is now under review, with public comment open until Nov. 21. Draft legislation for a regulation -- which has more force than a directive -- addresses many of the points raised by critics, Richters of ChargeUp said.

In a letter sent to regulators last summer ChargeUp called for interoperability requirements, payment regulations and “e-roaming” across national borders, in addition to metrics that focus on the charging capacity per vehicle.

"If we get all of that, then I think the future of EV driving and interfacing with infrastructure will get a much better than what we are used to," he said, "because in the past it was indeed quite tedious and very differently implemented."

Bedwell said a continued increase in EV market share would help drive charging investment.

"It’s always been a chicken-and-egg situation," he said. "You need enough EVs in use so that people can see a business case to invest in charging points.” 

Now, he said, "We are emerging from the chicken-and-egg situation. There are enough vehicles in use where people can see the business case."