Cleantech Market Intelligence
EV Charging Enters Consolidation Phase
The ChargePoint/Ecotality joint venture, announced last week, underlined the fact that the EV charging sector is experiencing a bout of consolidation. Earlier, Car Charging Group acquired New York-based Beam Charging, which will strengthen its presence in New York City. This will be especially interesting if Mayor Bloomberg’s commitment to add 10,000 public parking spots by 2020 comes to fruition. Better Place closed operations in North America and Australia. In the United Kingdom, Chargemaster acquired Elektromotive last year. These were two of the biggest charging equipment providers in the United Kingdom, so Chargemaster’s move positions the company well for the growing U.S. market.
This inevitable consolidation will continue, and it’s healthy for the industry. There are too many companies chasing after too small a market right now. This is not to say the EV charging market is small – please, no more stories on the “dying EV industry” – but Pike Research has found that there are well over 100 companies competing in the EV supply equipment (EVSE) sector globally. These include not just companies that sell their own EVSE units but also “third party providers” that sell and service EV charging equipment made by others, like CarCharging Group. Many of these companies are competing primarily for the commercial charging market – that is, units installed for use at offices, fleet depots, apartment buildings, parking garages, and a slew of public facilities like airports and retail outlets.
Globally the market for EVSE was around 180,000 units in 2012. Half of those were residential units, so that means just 90,000 in commercial sales. It doesn’t take complicated math to figure out that, if the market were evenly divided among the 100-plus companies offering EVSE, that would be a pretty small revenue base.
Looking at the U.S. market alone, we estimate that sales of commercial EVSE were around 20,000 in 2012. These units serve a total fleet of plug-in vehicles that reached around 71,000 at the end of 2012. That is simply not enough demand to maximize utilization of these EV stations. The PEV market is growing fast, so station utilization will rise and begin to match the expectations of the EVSE providers. But for the near term, the EVSE market is out ahead of PEV sales, and the market will struggle to sustain the number of players wanting a piece of it.
So more consolidation is ahead, as companies look to secure a single geographic market or expand their portfolio of EVSE offerings by partnering with companies that have complementary technology. For the moment, the industry would do well to focus its resources on the current EVSE equipment and networks in order to give PEV drivers the most seamless user experience possible. This means keeping track of the basics, such as making sure equipment is working when drivers show up. But it also means focusing on “interoperability:” making it easy for drivers to find and use all available EVSE units, something that the industry has been working on – by featuring stations from competing providers on a network app or enabling drivers to pay for charging without needing a network pass – but is still a long way from achieving.