European Charging Market to Replace Petrol Station Market in Next Decade

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The charging markets in Europe and the USA have many similarities, but also many differences. And the European transition to electric driving is a few years ahead of the USA. That is why this article is partly a copy of the previous article I wrote about the charging market in the USA.

It is unbelievable the number of times I have read the following in the comments or on social media: “The carmakers or government should build our EV charging infrastructure. Without it, there will never be a transition to electric driving.” The first part is BS. The second part is very true.

About the first part

It is not the task of car companies and governments to build our charging infrastructure. The only reason Tesla started building charging stations was because electric driving was new. There was nothing of the sort. Nissan and Renault did the same in collaboration with third parties.

Nowadays, the charging infrastructure can be built by normal commercial companies. A charging station is no different from any other shop. It only sells a single product, but that is not unique. It is just a retail outlet that sells electricity to drivers of electric cars. The curbside chargers you see in many cities in Western-Europe are no different from the candy and soda vending machines that are all over schools, workplaces, and shopping malls.

About the second part

Without adequate charging infrastructure, there can be no transition to electric driving. This article is about the future of the charging market. My main interest is getting everybody behind the wheel of an electric vehicle. For that to become reality, adequate charging infrastructure is needed.

In my vision, there are four charging options or modes.

  • Charging while parked at home or at work. Electricity can be provided by the grid, one’s employer, or rooftop solar power.
  • Charging while parked, connected to a public (curbside) charger operated by a CPO (charge point operator). This is often an “level 2” AC charger located where people park for a long time, like at night near their home if they do not have parking on their own property.
  • Charging while doing something else, like shopping or seeing a movie. This typically takes between half an hour to a few hours. The timetable for charging depends on the destination/purpose, whether charging is complimentary, and whether the site has AC chargers or DC fast chargers. Preferably, DC fast chargers will be available, with around 50 kW of power capacity. (The AC chargers we still see often are only effective for expensive cars with expensive internal triple phase AC/DC converters. AC chargers are too slow for electric autos with just a single phase internal AC/DC converter.)
  • Charging while traveling. The requires using a superfast charging station with a capacity up to 350kW. Speed of charging is of the essence.

The first is what everybody likes to do. It is the cheapest option and requires no hassle with cards, payments, and eMobility Service Providers (card companies). Without a private driveway, garage, or nice employer, most people must use one of the commercial charging market options.

Seeing charging stations as any other shop, there are three things that are important for success. Those three things are a highly visible location, a high-traffic location, and an easy-to-reach location. For level 2 AC chargers, it is about the same as any other vending machine. It should be at a location where the customers are and where it is easy to find and use. Do not expect the customers to search for you.

Currently, the European charging market serves a fleet of about 2.2 million BEVs. Nearly half of them can charge at home or at the driver’s workplace. That leaves over half of the EV owners needing regular use of a public charger, from a few times a month to a few times a week.

For regular use, they can choose any of the above mentioned three types of chargers. These chargers should be in the vicinity of where they park at night, where they work, along the routes they often travel, or at places they often visit, like malls or grocery stores.

Besides the regular charging, most EV drivers will use a supercharger from time to time. In Europe, the average passenger vehicle drives 10,000 kilometers per year. Newer vehicles drive a bit more than older vehicles, as do more expensive vehicles. Currently, BEVs are mostly new and expensive.

For simplicity, the public charging market is estimated at 1,100,000 cars times 15,000 kilometers times 140 Wh. That makes a nice 2.31 billion kWh. If the average price is €0.40/kWh, then revenue for the charging companies is about $924 million from daily charging. Beside this, there is the charging while traveling. Anecdotally, this is about twice a year for 30kWh times 2.2 million BEVs. That is another $50 million.

A 1-billion-euro European charging market is starting to become interesting for companies to invest in. Only, this is a theoretical charging market.

Easy access to charging is a prerequisite for most EV buyers. As a consequence, most BEVs are bought by people who do have access to easy (and often cheap) charging. While range anxiety is often discussed as a problem for BEV drivers, charging anxiety is actually a big reason for not becoming a BEV driver.

But the €1 billion figure is interesting enough that charging companies are accelerating the speed with which they install chargers. Profitable business is within reach after normal initial losses for 1 to 3 years. Support of governments is still needed to get the necessary permits and grid connections. Some subsidies to build chargers in under-served areas will also help.

Many national governments are stimulating charger deployment with incentives and special licensing plans. For example, the Dutch charging plan calls for 1 million public and semi-public chargers by 2030. In Germany, the number of 4 million is mentioned. The EU has 3.5 million for the whole of the EU in its targets for 2030. If you think those numbers do not add up, that is because the EU copied the numbers from the legacy car industry. They are from a time when BMW expected to sell 15% BEVs in 2030 and it was considered a leader in the transition. BMW now expects over 50% and is considered a laggard.

The increase in public charging options makes having a BEV as their next car an acceptable option for more people. This growing demand in the charging market makes installing more chargers attractive. The chicken and egg problem has changed into a spiral of positive feedback stimulating BEV buying and charger installation.

Some European countries are already above 20% of new car sales being BEVs this year. A bigger number of countries will pass the 10% mark. More demand stimulates more and more capable models. We see over 150 (and growing) BEV models now at dealerships. And we see another chicken and egg situation becoming a positive feedback spiral.

In 2030

Fastned charging station Peutie West near Brussels Belgium. Image courtesy of Fastned.

Fast forward to 2030. Depending on who you ask, there will be 50 million to over 100 million fully electric vehicles on the roads in Europe. The analysts of BloombergNEF (the most progressive among the settled industry advisors) think 50 million. The futurologists like Tony Seba and many readers of fan sites for renewable energy and electric vehicles (like this one) think it will be at least double that number.

With that number of BEVs on the roads, the portion that do not have private charging is likely above 60%. How much driving they do is harder to predict. When a product becomes cheaper and better, consumption tends to increase. Driving and travelling will change. Some see an increase in the use of robotaxis and carsharing. That is fewer vehicles that drive more miles. Others think that cheaper travelling and use of full self-driving tech will stimulate more travelling by private car at the costs of travelling by public transport.

Beside the transition to electric driving, there will be a change in how we use transport. The numbers for cars in 2030 are based on a business-as-usual scenario, or in this case, a driving-as-usual scenario. They are likely wrong, but they can help to estimate the number of kilometers driven by electric cars. With more electric cars on the road, there will be more older cars and smaller second cars that drive less.

That makes the lower bound 60% of 50 million cars times 12,000 km times 140 Wh/km times €0.35/kWh, which equals €17.5 billion. The upper bound would be 60% of 100 million cars times 10,000 km times 140Wh/km times €0.35/kWh, which equals €29.4 billion. This is for normal daily driving.

Compared to the USA, in Europe the car is more often used for holidays and vacations. That adds another 10% at high-speed, high-profit, highway chargers.

Trucking will be in a war over the still limited supply of electric trucks. With their lower costs per kilometer, the first companies that can switch to electric have a big competitive advantage over those that did not order their trucks in time. Truck charging at megachargers will rise fast to a €30 billion market a few years after 2030.

Smaller but lucrative markets will be electric general aviation that needs charging facilities at hundreds of smaller airports and landing strips, and inland shipping using container-sized battery swapping.

Smarter gas stations close before going broke. Those that are too slow in understanding what is happening … bankwuptcy.

In 2040

Driving in Europe will be almost completely electric in 2040. It’ll be hard to find fuel for ICE vehicles, and even harder to find places to drive. Many cities and urban areas will be closed to vehicles with a tailpipe. Auto ownership in Central Europe and Eastern Europe will be growing to the levels in Western and Southern Europe. Cheaper driving will enable more driving.

The gains in efficiency will be wasted on bigger vehicles that are more fun.

In 2040, the charging market will be a very large market. Competition between charging companies and the lower costs of renewable energy will have lowered charging prices before taxes. The governments will have shifted taxes from gasoline to electricity, supposedly to fight congestion on the roads.

There is a growing dense network of flying buses between small airports, creating a new mode of fast, clean, silent, and cheap public transport for the middle distances between 100 km and 500 km.

Inland shipping will be converting to battery swapping. For ships, it is just unloading and loading a container filled with electrons. The infrastructure to do that is in every river port.

The charging market will grow to become a €150 billion market, a lot smaller than the gasoline and diesel markets of yesteryear, but still an interesting and profitable market for those companies that were first and got the best locations.

The transport sector is ahead of schedule in reaching the goals of the Paris agreement.

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Maarten Vinkhuyzen

Grumpy old man. The best thing I did with my life was raising two kids. Only finished primary education, but when you don’t go to school, you have lots of time to read. I switched from accounting to software development and ended my career as system integrator and architect. My 2007 boss got two electric Lotus Elise cars to show policymakers the future direction of energy and transportation. And I have been looking to replace my diesel cars with electric vehicles ever since. At the end of 2019 I succeeded, I replaced my Twingo diesel for a Zoe fully electric.

Maarten Vinkhuyzen has 279 posts and counting. See all posts by Maarten Vinkhuyzen