The electric vehicle (EV) charging sector stands on the verge of a monumental expansion, with a staggering $1 trillion in investments anticipated globally by 2040, as per recent research by Bloomberg New Energy Finance (BNEF), a premier consulting organisation. This surge is set to revolutionise the industry, creating a wealth of opportunities for hardware manufacturers, site developers, charging operators, and software providers. However, the exact number of chargers required remains uncertain, hinging on factors such as government policies, consumer preferences, and technological advancements in fast charging.
In BloombergNEF’s Economic Transition Scenario (ETS), over 342 million chargers will be needed by 2040, with annual investment peaking at $69 billion in 2035. While slow chargers currently account for a quarter of this investment, their share is expected to grow to 50% by 2038 due to increasing home charger sales and a saturated fast-charging network. The demand for fast chargers is projected to decline globally in the 2030s, particularly in China, as the market shifts towards replacing old infrastructure rather than installing new.
By 2040, regions will require between 1.1 and 2.3 kilowatts of public charging per EV, significantly lower than today’s 2-10 kilowatts per EV, thanks to rising utilisation and charging power. The trajectory of the EV charging sector varies across regions, with China currently leading in charger installations, Europe on track to meet its 2030 public charging goals, and the US needing a sixfold increase in annual public charging installations by 2030.
Policymakers are now focusing on commercial vehicle charging, with the advance of megawatt charging expected to boost the industry. However, these chargers will only deliver about 10% of truck and bus electricity demand by 2040 in the ETS. By 2050, EVs will require 5,000 terawatt-hours of electricity annually in the ETS, or 12% of global demand, reaching 8,000 terawatt-hours in the Net Zero Scenario. Preparing the power grid to support this demand will necessitate significant grid investment in the late 2030s.
Mobilising the capital needed for grid expansion is a formidable challenge, but EV charging also presents a lucrative opportunity. Cumulative revenues from public charging could exceed $100 billion by 2030, with competition, grid connections, and electricity costs impacting profitability.
As of the end of 2023, the global charging network comprised nearly 4 million chargers, with annual installations growing by 40% year-on-year. China continues to dominate, housing 69% of the world’s installed chargers. South Korea, France, and Germany also made significant strides, while installations in the US and the Netherlands saw a decline.
Despite these developments, the global ratio of EVs per charger rose slightly to 10.3-to-1 in 2023, highlighting the growing need for ultra-fast chargers. These chargers, which can deliver more power in shorter sessions, accounted for 86% of the $24 billion invested in public charging in 2023, despite making up just a third of new chargers.
India is poised to play a pivotal role in the global EV charging landscape. As the world’s fifth-largest car market, India’s transition to electric mobility is critical for achieving its climate goals and reducing urban air pollution. The government has set ambitious targets, including the installation of 2.5 million public charging stations by 2030.
India’s diverse geography and urbanisation patterns necessitate a unique approach to EV charging infrastructure. Rural areas will likely rely on slow chargers, while urban centres will need a robust network of fast chargers to cater to the high demand. The push for indigenous manufacturing of EV components and chargers will not only create jobs but also reduce dependency on imports.
India’s EV revolution will require a massive overhaul of its power grid. With the anticipated increase in electricity demand, the country must invest heavily in grid modernisation and renewable energy sources to ensure a stable and sustainable supply. Innovative solutions such as smart grids, bi-directional charging, and energy storage systems will be crucial in managing this transition.
The EV charging sector is on the brink of unprecedented growth, with a trillion-dollar investment forecasted by 2040. While the path to this future is fraught with challenges, it also offers immense opportunities for innovation and economic growth. For India, the journey towards a sustainable and electric future is not just a necessity but a transformative opportunity that can reshape its energy landscape and drive inclusive growth.
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
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