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EV charging networks

Sparking growth, but work to be done.

Charging network crucial to keep on schedule with EV plans
An adequately extensive and accessible charging network is crucial for the development of the electric vehicle (EV) market. Consumer surveys consistently show access to chargers is the primary concern among EV drivers and potential buyers alike. It is often more important than driving range, battery lifetime and even vehicle price. The data confirm a positive correlation between the size of the electric car parc and charging points, both private and public.

Europe and US behind schedule…mainland China ramping up its scale
Europe opened c.1.8K new public charge points per week in 2022, flat vs. 2020. It will need a >9x acceleration in its rollout to meet the EU Charging Masterplan targets for 2030, which we think is 40% too high. BNEF (Bloomberg New Energy Finance) cut its estimates for the number of chargers in the EU and US in 2021, but increased the Kwh capacity. Meanwhile, mainland China is ahead of schedule (>30% points above BNEF estimates), nearly doubling the number of new charge points rollout y/y. 60% of all public chargers are in mainland China, supporting a BEV sales market already double that of Europe and the US combined.

Next catalyst: a moment of doubt in Europe?
Purchasing incentives are starting to fade out, noticeably in Germany and France. Some original equipment manufacturers (OEMs) have already cut EV prices since 4Q22, and we doubt the expected cost savings have been achieved, especially given raw material and lithium price inflation. Once OEMs’ backlogs thin out, we see downside to our short-term estimates for the EV revenue pool (volumes x price).

OEMs investment in charging to remain niche
The providers of charging services, software and hardware are mostly companies outside the old Autos space. Their financials suggest operating size is still too small to turn into profit. In our view, OEMs do not intend to take on a significant role in developing the charging network. Indeed, their involvement via cooperation’s and direct investments (eg MGB’s announcement at CES23) should be discounted as marketing expenses, aimed at: i) ensuring ubiquitous access to charging for their customers; and ii) enhancing their own brand within the new EV customer universe.

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Electric vehicles: who's charging ahead?

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