Electric vehicle charging companies in Europe and the US have begun battling for the best locations for fast public charging stations, and industry watchers are predicting more rounds of consolidation as more large investors join the fray, Reuters reports.
Long-term investors are backing many existing electric vehicle charger companies. It is expected that there will be more of them in the near future. The impending bans in various countries on the use of fossil-fuelled vehicles have made the sector more attractive to infrastructure investors such as M&G’s (MNG.L) Infracapital and Sweden’s EQT. Tomi Ristimaki, CEO of Finnish EV charger manufacturer Kempower (KEMPOWR.HE) said:
If you look at our customers, it’s like a land grabbing game now. Who gets the best locations now can guarantee electricity sales in the coming years.
Reuters reports that there are more than 900 electric vehicle charging companies worldwide. According to PitchBook, the sector has raised more than $12 billion in venture capital funding since 2012.
According to Michael Hughes, chief revenue and commercial officer at ChargePoint (CHPT.N), one of the largest providers of electric vehicle charging hardware and software, as large investors fund consolidation, “the fast charging landscape will be very different than it is today.”
Corporates from Volkswagen (VOWG_p.DE) to BP (BP.L) and E.ON (EONGn.DE) have invested heavily in the industry, which has seen 85 acquisitions since 2017.
There are more than 30 fast charger operators in the UK. Two new ones opened last month: Australian company Jolt, backed by infrastructure fund BlackRock, and Zapgo, which received £25 million ($31.4 million) from Canadian pension fund OPTrust.
In the US market, Tesla (TSLA.O) is the biggest player, but more shops and charging stations will soon join them, with the number of fast-charging networks in the US more than doubling from 25 in 2022 to 54 in 2030, according to Lauren McDonald, chief executive of EVAdoption, a San Francisco-based research firm.
It could take four years for a properly located EV charging station to become profitable after its usage reaches about 15 per cent. Charging station companies complain that bureaucracy in Europe is hampering development. Nevertheless, the sector is seen as a good bet by long-term infrastructure investors such as Infracapital, which owns Norway’s Recharge and has invested in the UK’s Gridserve. Christophe Bordes, managing director at Infracapital, said:
With the right locations, long-term investments in (charging companies) absolutely make sense.
Hughes of ChargePoint says the big players will start looking for new properties outside of existing sites, purpose-built for mega complexes with 20 or 30 fast charging points surrounded by retail shops and amenities. He noted:
There’s a race for space but it will take longer than anybody expects to find, build and enable these new sites for the next generation of fast charging.
Competition for the best sites is becoming increasingly fierce and site owners may move from one operator to another before making a final choice of winner. Blink Charging (BLNK.O) CEO Brendan Jones said:
We like to say there’s no such thing as a dead deal when you’re talking to a site host.
