Electric Vehicle (EV) Charging Infrastructure Market Trends

Growth Drivers:

• Rise in sales of EVs: The rise in sales of electric vehicles is among the primary factors driving the growth of the electric vehicle charging infrastructure market. This spike is due to factors such as environmental awareness, government incentives, and continuous technological advancements in electric vehicles. As per the International Energy Agency, the electric vehicle industry witnessed a surge with electric car sales reaching USD 14 million in 2023. This rising number of EVs on the road is expected to boost the demand for charging infrastructure during the forecast period. 

• Decreasing battery costs: A decline in battery costs boosts EV adoption and further drives the market growth. As battery technology improves, the overall cost of EVs decreases with traditional internal combustion engine vehicles. This affordability factor, combined with the environmental benefits of EVs, is encouraging consumers to switch to these EVs. The increasing fleet of EVs will correspondingly require a robust, widespread charging network that caters to the requirements of EV owners.

Challenges

• Insufficient grid capacity: In 2022, only about 0.6% of the U.S. electricity demand was used to charge EVs. According to a report by the International Energy Agency (IEA), by 2030, with roughly 26 million EVs on the road, electricity demand could increase by as much as 20%. By 2035, it can further increase to 40%. Unlike any quick-charging functionality, the wide-scale acceptance of an EV stresses the grid capacity in accommodating the increased demand for electricity. This demands a huge investment in the upgrading or modernization of grids to handle such challenges. As a result, this factor limits the adoption of EV charging infrastructure.

• Charging standards: The challenge arising from non-standardized charging protocols and connectors is a major factor limiting growth. Global standardization creates a barrier for market players as different countries use different charging standards. For instance, Combined Charging System (CCS) is rapidly growing in Europe and North America, but CHAdeMO is still dominant in Japan, and China has its own GB/T standard. This fragmentation can cause confusion among consumers and added expense for manufacturers developing different types of charging equipment.