EV Charging Manufacturing Costs and Future Challenges
October 26, 2021
Benjamin Ringrose
The Growing Industry
The EV charging market is growing at extreme rates. Future market value estimations vary hugely due to many unknown circumstances but the global electric vehicle charging infrastructure market is projected to reach a value between $27-49 Billion by 2027. But, it could be much more. The market is being driven by a variety of factors from the climate to technology developments by charging point leaders such as Tesla.
The major factors driving growth are:
The escalating climate crisis, levels of carbon emissions and other hazardous pollutants from traditional fossil-fuel-powered vehicles. Resulting in EV vehicles becoming more favourable with lower maintenance needs and government subsidies supporting the EV industry. The requirement for EVs correlates to a rise in the number of electric vehicle chargers and infrastructure.
Government policies for installing fast-charging stations and rebates on the purchase of electric vehicle charging stations. These policies have resulted in increasing investments from vehicle manufacturers towards the development of charging station infrastructure to support their current electric vehicle production.
The increasing prices of petroleum products is only favouring the EV charging industry as the cost difference continues to grow with petrol being around 128p per litre versus electricity costing between 10-14 pence per kWh. Consumers from emerging countries are already affected by the increased cost of petrol. Vehicles operating on electricity will reduce the operating cost of users. Manufacturers are expected to develop EVs with better battery life and longer usage duration increasing the range of EVs.
Overall, technological developments in the automotive sector, price changes of petrol and diesel, and increasing government regulations on CO2 emission are factors encouraging people to purchase low-emission and electric vehicles. Both the private and public sectors are investing heavily in the EV charging infrastructure networks to increase reliability and the number of charging stations. As well as this, multiple EV and EV charging manufacturers are collaborating with charging infrastructure developers to gain the availability of charging stations. Market players are also pumping money into their research and development activities to build cost-effective and faster EV charger types for electric vehicles.
However, this surging growth that the electric charger market is experiencing does not mean there are no challenges. Factors such as infrastructure growth and manufacturing costs still pose threats.
Who Are The Current Industry Leaders?
This industry is very competitive with new market entrants on a regular basis. These are some of the current EV charging manufacturing industry leaders. Read here for more insights into EVs and EV charging.
Shell – Shell is one of the largest multinational oil and gas companies in the world. However, with the energy transition and the world heading for a greener future, Shell offers EV charging services and aims to have 500,000 charging points installed around the world by 2025. This includes over 5,000 charge points on forecourts in the UK by 2025. Shell provide a wide range of rapid and high-power charging equipment and a mobile application that allows the user to locate the nearest Shell charging station and offers information on price. Their charging network is a combination of 50kW and 150kW chargers.
Siemens – Siemens, the German-based company and one of the largest manufacturer brands in Europe, specialises in various industries such as healthcare, electronics, energy, and transportation. The company have also ventured into EV charging manufacturing and has installed various electric vehicle chargers from basic charging to rapid charging. Siemens has manufactured and developed their own ‘wallbox charger’ that can be used for private residential areas or shared areas for at-home charging. In addition to residential charging, Siemens is developing a network across the world in major cities such as London and they have committed to manufacturing 1 million EV chargers for the US market by 2025.
Tesla – the US-based electric vehicle company offers many of the best electric vehicles currently available, along with other products and services like solar panels and storage systems. Tesla holds about 15% of the global market share. They also offer a wide range of charging stations around the world but these were originally only available for Tesla models. Tesla’s CEO Elon Musk announced in late 2021 that Tesla is set to open its charging network to all-electric vehicles. The company manufactured their own supercharger which can charge up to 250kW. They have over 25,000 superchargers installed around the world across 4,500 charging destination locations. The Tesla Supercharger is one of the fastest EV chargers currently available with the ability to charge an electric vehicle’s battery in 30 minutes.
ABB – located in Switzerland, ABB is a leading multinational technology company offering products and services across multiple industries including power, robotics, automotive, and electrics. ABB have a goal of providing accessible, reliable, and easy to use emission-free mobility to everyone. They have launched EV charging options from basic to high quality, varying from AC wallboxes for residential uses to fast DC charge points. Recently, ABB officially manufactured and released the world’s fastest EV charging station called ‘Terra 360’. This pioneering technology offers EV drivers over 100km of range in less than 3 minutes. This multi-purpose charge point can charge 4 vehicles at once making it perfect for use across commercial fleets, retail spaces, and refuelling stations. Terra 360 is also accessible to all EV drivers and can provide varying power levels depending on the vehicle with a max output of 360kW. In July 2021, ABB signed a contract to manufacture an e-bus charging station in Qatar over various locations, in addition to supplying high power charging infrastructure at 12 metro stations and around 8 bus stations.
ChargePoint – ChargePoint is an American based company and one of the largest electric vehicle charging networks in the world – their technology is available to all EV drivers through its network of around 114,000 electric vehicle charging stations across multiple countries. ChargePoint provides AC and DC charging stations of their own, however, they also incorporate other companies chargers into their networks such as ABB’s Terra DC-Wallbox and Terra HP Charger. Furthermore, in August 2021, ChargePoint acquired ViriCiti, an Amsterdam-based electric bus and commercial fleet manufacturer. This acquisition aims to help ChargePoint further develop its charging network across Europe.
Source: Ovo Energy, How Do Electric Cars Work?, August 2021
The Challenges and Costs
EV charging manufacturing companies and the industry have various challenges and costs facing them.
The largest challenge facing the industry is the high costs of fast electric chargers. Level 3 chargers (rapid chargers) are the future of the industry as they are the answer to another challenge of the industry – charging times. However, the manufacturing costs and implementation of these level 3 chargers can be extremely high. Because of the new technology and high costs of manufacturing these chargers, it then results in higher selling costs. For a person to buy a DC fast charger for their home, the cost can reach as high as $35,000 excluding installation costs. This is simply unaffordable for most people. These current high initial costs of fast level 3 chargers is one of the major challenges facing the industry. It has been estimated the overall costs for Tesla for their Superchargers is between $100,000 – $175,000. Further estimates say in order to make Tesla’s Supercharger network a similar convenience to petrol stations in the United States it would cost around $8 Billion.
These costs are very high, however, as the market continues to become more competitive slowly the costs are reducing. But for now, the manufacturing and customer purchase costs for rapid chargers are too high.
Another one of the challenges facing the manufacturing of EV chargers is the red tape. Governments are trying to break down the barriers for EV charger manufacturers in order to make it easier. Through the design, manufacturing, and installation processes there are barriers with governments, utility providers, business owners, and more that create red tape and it takes time for the company to overcome. Around the world, multiple major governments have put electric car and charging incentives like rebates in place and utility providers want to work with the manufacturers to make the process easier, faster and create a more reliable service.
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What Does The Future Hold?
The future of the EV charging manufacturing industry holds huge potential. There are future developments that are expected to take place in the not to distant future such as new rapid charges like ABB’s Terra 360, infrastructure developments to offer increased reliability and number of charging points, and of course, the reduction in costs of EV chargers to both buy and manufacture.
But, there are also future developments which are less well known about. For example, blockchain. Blockchain can be used for securing digital information and automating the interaction between chargers and users. Blockchain is built on an algorithm to order information and share data. It will provide a framework for different infrastructures and networks to relate with each other and share information to improve reliability. The information from blockchain could allow electric utility providers to balance the infrastructure and electricity grid.
Blockchain is a growing and exciting technology that can automate processes and allow multiple services to work with each other.
Another technology for the industry might be EV wireless charging. This technology could use the current charging infrastructure and would make a more user-friendly experience and solve the challenges of standard charge points for disabled drivers. This technology could be applied to car parks or even the roads themselves in the future…
From 2020 – 2022 in the UK, wireless charging taxis will be piloted. Qualcomm’s Halo induction technology transfers energy from a charging pad on the ground to a charging pad on the underside of the stationary vehicle. This technology would lead to shorter but more often charges allowing vehicles to use a smaller battery, reducing the vehicle’s overall costs.
