New analysis from Frost & Sullivan, “Strategic Technology and Market Analysis of Electric Vehicle Charging Infrastructure in North America”, predicts that the electric vehicle (EV) charging station market in the US will grow immensely, with the number of charging points reaching approximately 4.1 million by 2017.
The market research company says the US government is extending its plans to the installation of charging station and funding programs such as ECOtality’s EV project, which is trying to install EV charging infrastructure in six major states.
Of the projected 4.1 million charging points, the most common ones will be the level 1 charging stations, as every EV sold will have a level 1 charging cord included in the vehicle. Level 1 charging station can be plugged in a household socket which takes approximately eight to 10 hours to charge the vehicle and does not involve any installation cost. About 71% of the charging stations are expected to be level 1 followed by level 2, which will account for 27% of the market share by 2017. Nearly 87% of the EVs are expected to be charged in residential locations, as they will be parked in the garage for 10 to 12 hours in a day.
“EVs are more expensive than conventional vehicles, therefore, federal government is granting customers as much as US$7,500 in incentives to purchase an EV,” said Frost & Sullivan Research Associate Prajyot Sathe. “Incentives include discounts on the purchase of EVs, tax credits or exemption and other advantages such as usage of heavy occupancy vehicle (HOV) lanes and free parking.”
According to Frost & Sullivan, the charging infrastructure is expected to grow at a compound annual growth rate (CAGR) of 128.12%, due to the currency of the “green” concept and oil prices’ volatility. Attracted by its potential and low entry barriers, participants are emerging from multiple industries such as technology, vehicle manufacturers and utilities.
Even while offering substantial opportunities, the EV charging infrastructure market is plagued by issues typical to a nascent market. Participants are looking for solutions to ensure standardization of charging systems in vehicles, charging stations, and business models. EV owners are also inconvenienced by the low access to charging stations and the eight to 10 hours needed to charge their vehicles at level 1.
However, Frost & Sullivan expects the problem will be overcome in the next two to three years through research & development. As the market is still evolving, participants are in the process of identifying the scope of development of technologies and economically viable business models.
“Participants are introducing various strategies such as providing EV charging facilities in restaurants, leisure places and malls as a value-added service to customers,” said Mr Sathe. “They also adopt various business models such as subscription and pay-per-use to attract more buyers and make the most out of the market’s potential.”