US Electric Vehicle Charging Equipment Market - Growth, Trends, and Forecast (2018 - 2023)
In a world where oil is a limited resource, an alternate source of transportation fuel, like electricity, is not only a smart investment but is also an inevitable one. In the United States, about 70% of the oil consumed is used for transportation. The transportation sector is responsible for 28% of the total greenhouse gas emissions (GHG) in the country, and therefore, substituting EVs for gasoline-fueled cars presents an opportunity for a significant reduction in GHG emissions. Electric vehicles improve quality of life, reduce energy-spending, and decrease reliance on foreign oil, thereby, creating additional economic development opportunities for the future. Due to their potential environmental benefits, innovation spillovers, and an increase in the national energy security, electric vehicles attract huge investments from the government.
Many leading energy firms are increasingly entering into the refueling infrastructure market, for broader consumer acceptance in the overall electric vehicle market, across the world. For instance, on October 26, 2017, Enel, through its subsidiary, EnerNOC, announced the acquisition of a leading North American supplier of electric vehicle (EV) charging stations, eMotorWerks. Enel plans to use the eMotorWerks JuiceNet platform in all of its EV charging stations across the world, which will enable users to remotely schedule and control the greenest, and most cost-effective times to charge their EVs. Similarly, on July 07, 2017, Innogy entered the US EV charging market, by setting up a subsidiary in California, offering charging points for electric vehicles in the country. These developments, along with the increasing government support, are likely to result in the growth of electric vehicle charging equipment market in the United States, during 2018-2023 (the forecast period).
Widespread Adoption of Electric Vehicles Presents a Huge Opportunity
The US Energy Information Administration (EIA) plans to reach the annual EV and plug-in EV sales of 1.3 million by 2025 and aims to achieve 7.5 million EVs on road by then. EV charging infrastructure is expected to be increasingly vital to the country, during the forecast period, on account of the widespread adoption of electric vehicles, which presents an opportunity for the companies that are building out these charging capabilities. In California, San Diego Gas & Electric plans to build 3,500 utility-owned chargers for about USD 45 million, while Southern California Edison announced its plans to build 1,500 host-owned chargers for USD 22 million. Pacific Gas & Electric is expected to create an infrastructure for 7,500 chargers in a utility-private investor partnership.
Over the years, several models of plug-in electric vehicles (PEVs), including battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), were introduced in the light-duty automobile market. PEVs are limited by driving range and can usually travel between 60 and 200 miles before recharging. Therefore, charging infrastructure is beneficial to the success of these kinds of vehicles. A readily-available public EVSE infrastructure is required as a part of the overall EV owner’s charging patterns, which includes, home and workplace charging, for the broad acceptance of EVs by the general public. To overcome the issue, states have established plans to introduce financial incentives for setting up new public and private recharging facilities, thereby, promoting the development of the infrastructure. Also, the US government provides tax credits and rebates to incentivize consumers to purchase electric vehicles and businesses, in order to install charging stations. In addition, a portion of the charging stations in the country was built as a part of the Recovery Act Program, which chose station locations before the beginning of the electric vehicle market.
Charging stations prove to be an inadequate economic investment, due to their lower utilization and relatively-high upfront cost, particularly for DCFC stations. The cost of installing a charger varies with its power capacity. Although higher power chargers recharge electric vehicles faster, the cost of installing the same, is expensive. In addition to cost, high-voltage chargers present other challenges. Whether fast charging affects the battery life, is yet to be determined. If there are significant wear and tear, PEV owners opt for lower voltage charging, to protect the costly investment of a battery. Costs may sometimes fall if chargers are installed in bulk, although, this depends on the available power capacity of the site. Several companies are developing technologies that allow utilities to manage fast charging in real time. For instance, Delta Products is developing a residential charger in California that connects to utilities through a wireless network, facilitating two-way communication between the utility and the charger at a low cost.
Major Players: Tesla Motors Inc., Plug Power Inc., ChargePoint Inc., Bosch Automotive Service Solutions Inc., ClipperCreek, Inc., AeroVironment, Inc., Delta Electronics, Inc., EnerNOC Inc., and Innogy SE, amongst others.
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Current and future market outlook for the US electric vehicle charging equipment market
Various perspectives on the market with the help of Porter’s five forces analysis
The segment that is expected to dominate the market
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