The State of the U.S. EV Charging Infrastructure

If electric vehicles (EVs) are our future, then the EV charging market must rise to meet the challenge. While this is still an immature market, many companies have risen to fill the void, with even Tesla hinting that it might jump into the EV charging space. To find out more about the EV charging infrastructure currently in place in the U.S. and what it might look like in the future, GLG’s Joyce Ho held a teleconference with James Christodoulou to find out more. This is an excerpt from their longer conversation.

Can you provide an overview of the current state of the U.S. EV charging infrastructure market?

The one thing to remember is that electric vehicles and the EV charging market, although they’ve been around for several years, are still in the early stages of adoption. That’s not to say that the technology is going to change dramatically. Quite frankly, the underlying technology of electric vehicle charging stations is pretty well developed, but the ecosystem as a whole is still in its early stages.

Before we start to talk about the whole charging ecosystem, bear in mind that it is there to charge batteries, and therefore it’s very important when looking at the charging infrastructure market to keep an eye on development in battery technology, both in terms of energy density and thermal stability, the ability for a battery to hold a charge, which will translate into range. The real quantum leaps that may come in electric vehicles and electric vehicle charging infrastructure will be driven by changes in battery technology.

As far as the current state of the charging industry, it’s not necessarily developing technologically, but it is expanding. Fundamentally, there are three types of charging stations: Level One, Level Two, and Level Three.

Level One and Two are low-speed charging stations. Level One stations are those that you would plug into a wall outlet at home and charge your car very low and slow. Level Two also provides AC current, which is usually a higher-output plug like those at a retail or office parking location where calls will get a faster charge than Level One. The alternating current needs to be transformed into direct current by a unit in the car.

Level Three is charging stations where the output is not limited by the conversion capability within the car to convert from AC to DC. This is DC current going directly into the battery, and DC fast chargers can range from 50 kilowatts per hour, which is more than twice the rate of the fastest Level Two charging station and probably 10 times the rate of the average Level One charging station. I’ve seen designs that can provide 350 kilowatts per hour of charge. That’s very, very fast charging.

I predict that the market will split into most of the charging done at home (Level One) with most non-home charging done at Level Three charging stations. Level Two charging stations will be located at many retail or office locations as an amenity or a convenience to attract and retain customers or employees, and also to satisfy new ESG green requirements with existing and new construction. Currently there are roughly 140,000 Level Two charging points at approximately 53,000 locations in the U.S. and approximately 25,000 Level Three charging stations, which translates to about 80% Level Two units and 20% Level Three units.

As time goes by you’ll likely see a slowdown in the deployment and proliferation of Level Two charging stations. In fact, in the next several years, you may actually see decommissioning of Level Two charging stations in favor of continued expansion of Level One charging stations where people will charge at home, and Level Three charging stations at key locations throughout the country to provide fast charging for cars when they extend their driving beyond the battery’s range. That’s kind of how I see the market segmented for charging infrastructure and also how I see it going forward as far as development and evolution.

One of the challenges that people rightly focus on when they look at the proliferation of electric vehicle charging is to make sure that the charging station network doesn’t expand beyond the capabilities of the various electric utilities in the associated areas. On the one hand, while we’re focusing on development of battery technology, we also want to be acutely aware of improvements to the ability of utilities to provide electricity to electric vehicle charging stations. Utility capacity and electric vehicle charging station expansion need to keep pace with each other. It doesn’t do anybody any good to have charging stations expand beyond the capability of utilities to provide them with electricity, because then you’ll have just dead or slow chargers.

I still believe the majority of charging will take place at night when there is typically excess capacity on the utilities’ electric grid to provide electricity. And then the second major time will be during the day, most probably between three and seven or three and eight in the evening, which is kind of consistent with people’s normal driving patterns after work as they go about their day. This is probably when they’ll do their non-home charging fill-up.

About James Christodoulou:

James Christodoulou is currently employed at Ryze Renewables as CFO. Before joining Ryze, James was President, COO, and Director at Blink Charging Co. Before this, James held the position of Chief Financial Officer at Galeon Navigation. Before Galeon, James was President at Angelmar Corporation for six years. He was also Chief Executive Officer and President at Industrial Shipping Enterprises.

Questions:

• For a start, can you please give us an overview of the current state of the U.S. EV charging infrastructure market? How big is it at present versus its potential, and how is the pie divided between different subsegments?
• You mentioned that you are going to see more decommissioning of Level 2 chargers over time, and we are probably going to see more Level 1 and Level 3. Can you tell us more about the costs of installing and running Level 1 versus Level 2 and Level 3 chargers? How are the respective capex and opex of these three types of charging infrastructures?
• Right now, we know that the U.S. EV charging infrastructure landscape can be broadly divided between auto OEMs, third-party operators, and oil giants. Can you highlight some of the key players and the competitive dynamics between them? And do you think that this is a winner-takes-all market?
• Given the advantage of oil companies, or maybe like what you said should be called energy companies, how are they going to affect the outlook for companies like ChargePoint and Blink Charging? We know that ChargePoint is currently the largest EV charging operator in the U.S., but it’s still not profitable at the moment. And so, how do you see the type of competition or threats that oil companies will pose to the likes of ChargePoint and Blink Charging?
• We know that last month Tesla announced that it would open up its supercharging network to non-Tesla EVs, and it’s also sharing its EV charging connector design to other charging network operators. So how would you read this move of Tesla? In what way it will change the EV charging competitive landscape in the U.S.?
• Right. So we talk about oil companies or energy companies expanding rapidly in the EV charging infrastructure space, and obviously, we can see that they’re doing a lot of acquisitions in the past two or three years to enhance their capabilities and also geographical coverage. So, based on that, do you expect a lot more M&A activity is going to happen in the sector going forward? And what do you think would be qualified as prime assets?
• We saw a big push from the Biden administration to encourage EV adoption and, of course, development of its infrastructure. So, the question here is, to what extent can the 2021 Infrastructure Investment and Jobs Act, and also the Inflation Reduction Act, just passed in August, accelerate the buildout of EV charging infrastructure across the U.S.?
• What’s your outlook for the US EV charging infrastructure market in the medium to long term? And how would a recessionary environment affect its growth?

This electric vehicle industry article is adapted from the GLG Teleconference “U.S EV Charging Infrastructure: Are Oil Giants Set to Win the Race in Non-home Charging?” If you would like access to the transcript for this event or would like to speak with electric vehicle industry experts like James Christodoulou or any of our approximately 1 million industry experts, contact us.