Peter Frode calculates the economic reality and viability of fast public charging-stations for electric vehicles.
Although the United States has long lagged other regions in electric vehicle (EV) adoption, the country is now reporting record growth. EVs represented about 8 percent of all new passenger cars sold in the United States in 2022, up from around 5 percent in 2021.1 By 2030, this figure could rise to 53 percent.
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The United States will need about 28 million ports by 2030 to meet the demand for electricity by zero-emission passenger vehicles (Exhibit 1). Private ports are expected to increase in number from around 2.5 million to nearly 27 million, representing about 95 percent of the total.
Exhibit 1
The United States will need 28 million chargers by 2030 to meet EV demand.
There are two types of public charging: direct current fast charging (DCFC), which is used on highways and for fast fill-ups, and slower Level 2 (L2) charging, which is available at places such as grocery stores, malls, car dealerships, golf courses, and banks, where people may park for longer periods. L2 charging may also occur next to sidewalks or near street parking. About 150,000 L2 and DC plugs are now available across the United States, but that number is expected to increase to 1.5 million by 2030, when they will represent about 5 percent of the total.
While public fast charging is a piece of the overall charging solution, current EV demand for electricity is still so low that profitability is challenging—and this could remain the case over the short to medium term. To help charge-point operators improve their financial picture both now and during scale up, we examined the EV market, including the ongoing shifts in ownership patterns and charging demand. We then analyzed the factors that influence charging station revenues and identified potential improvement levers for optimizing profitability. Among the most important: a focus on utilization and pricing.
Public charging is required, no matter what
Currently, most EV owners tend to be home owners with access to a home charger, and they often have a second vehicle for long-distance trips. But even people that fit this profile will sometimes need public charging. For instance, they might forget to charge their vehicle overnight and thus need to charge on the road, or they might find that the slow L2 charger at their workplace parking garage, where they usually connect during an eight-hour workday, is out of commission. Additionally, long journeys—those over 150 to 200 miles—will necessitate public charging.
As EVs become more common and their owners no longer come primarily from higher income groups, the percentage of charging that occurs at home is expected to fall to 50 percent by 2030 (Exhibit 2). Although about 65 percent of the US population own or rent a single-family home, many people lack garages where a charger could be placed, or find that installation is prohibitively expensive.2 Apartment dwellers may also lack a suitable installation site or encounter resistance from landlords who do not want chargers on the premises. In such situations, public charging, either fast or overnight, is the mainstay.
Key points include:
- The demand for public charging
- Business models for EV charging providers
- The economics of charge-point stations
Read the full article, Can public EV fast-charging stations be profitable in the United States?, on McKinsey.com.