Why OEMs, EU Moving Faster on EV Charging

As the auto industry grapples with soft sales of electric vehicles, rising interest rates and persistent inflation, and wondering what the tipping point might be to get reluctant buyers take the plunge on an EV, the EU and a consortium of seven automakers plan to ratchet up the availability of fast chargers in Europe and the U.S., respectively.

The U.S. Plan

The new joint venture includes BMW Group, General Motors, Honda, Hyundai, Kia, Mercedes-Benz and Stellantis NV, which plans to install 30,000 fast-charger connectors across the U.S. and Canada. The first chargers are expected to go into operation in the summer of 2024.

“We intend to exceed customer expectations by creating more opportunities for a seamless charging experience given the significant growth expected in the market,” Stellantis CEO Carlos Tavares says in a joint statement with GM CEO Mary Barra. The better experience people have, the faster EV adoption will grow.”

The U.S. Department of Energy says there are approximately 32,000 public and network (i.e., Tesla) fast chargers in the U.S. Recently, Ford, which has not joined the consortium, recently made a deal with Tesla that allows Ford customers to access Tesla’s fast-charging network. GM followed Ford with a similar deal.

There are 164,000 gas stations in the U.S. With continued build-out of chargers by Tesla and networks like ChargePoint and EVgo, plus efforts by OEMs and public utilities and local and state governments – with supporting funding coming from the federal government by way of the 2022 Inflation Reduction Act – there could be 100,000 fast chargers in the U.S. by 2030 or earlier. At that rate, gas stations will still outnumber chargers because gas stations have multiple pumps.

Such efforts to quickly grow fast-charger availability are seen as necessary to give consumers reluctant to buy an EV more confidence and to diminish range anxiety. A recent survey conducted by global consulting firm EY reports that over half (51%) of U.S. consumers are more worried about finding a charging station in nonresidential facilities than expensive charging costs.

Automakers have years of learning on this. In Japan, for example, automakers found that test fleets of EVs sat at consumers homes until urban public chargers were set up despite the fact that the range of the vehicles far exceeded their daily driving miles.

Even if they are up and running, out-of-home chargers, except for Tesla’s, have proved to have reliability issues. A study released in 2022 by the University of California-Berkeley found that about one-quarter of the public chargers in the San Francisco Bay area were out of order at any given moment.

A portion of the charging stations to come out of the consortium will be located at highway stops that offer amenities and conveniences.

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Profits Under Pressure

Solving the access and range anxiety issues as quickly as possible is seen as key to the industry not only fulfilling government mandates but also returning revenue and profit on the enormous investments the industry is making in electrification. GM and Ford have told Wall Street, for example, that they will realize no profits from EVs through 2025. And Wall Street is skeptical of that target.

The consortium’s fast-charger plans have everything to do with trying to make their vehicles profitable as soon as possible.

Automakers are discounting EV prices to clear excess inventories because consumers are delaying purchases of new cars, and specifically EVs. Inflation and rising interest rates are one factor. EV resistance is another.

And then there is a percentage of buyers who are politically against buying an EV, as well as a percentage of buyers who are going to put off consideration until government mandates leave them no choice. It also is hurting automakers that only a few EV midsize or large SUVs (two of the most popular segments) are on sale. In short, there are a lot of deterrents to buying an EV today.

The EU Hitting Fast-Charging Accelerator, Too

A new law in the EU will allow EV owners in Europe to travel across the international bloc of countries with complete coverage, allowing them to conveniently pay for recharging vehicles without apps or required subscriptions by 2030.

EU countries this week agreed on the new law, which will mandate and help fund the building of additional EV fast chargers, as well as more refueling stations for alternative fuels, such as hydrogen, along the main highways across the EU.

Specifics:

The new EU regulation is part of the “Fit for 55” packages of regulations and incentives drafted to facilitate reaching the bloc’s goal of reducing greenhouse gas emissions by 55% (compared with 1990 levels) by 2035 and, ideally, reach climate neutrality by 2050.

“The new law is a milestone of our ‘Fit for 55’ policy providing for more public recharging capacity on the streets in cities and along the motorways across Europe,” says Raquel Sánchez Jiménez, Spanish Minister of Transport, Mobility and Urban Agenda.