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The evolution of public EV charging
What will happen when charging becomes a commodity?

The European public EV charging market is heading for disruption. Although the market is still at an embryonic stage, EVcharging is already about to become a commodity and players need to innovate in several directions to stay in business.
Some are still hesitating, while others are already investing in collaborations or acquisitions to secure their future market
positions. The European market is characterized by high fragmentation and intense competition for market shares and direct
customer access. What are the implications for the market in these fast-changing times? What key success factors will drive
business models to evolve to cope with the imminent disruption?

Introduction
The EV charging market has huge potential growth. EVs andcharging stations are not widespread yet, but a significant
increase in EV production is expected in the next years.
Despite high relative uptake of the electric car park in recentyears, absolute growth is still marginal, having only amounted
to 400,000 electrified vehicles from 2017 to 2018 in Europe.
Applying current vehicle usage patterns and market prices ofpublic charging services to the electric vehicle park would result
in total revenues of only 114 €m for 2018.
Historic and future development of electric vehicle parks
and public charging revenues in Europe

4.605
2030

1.076
2025

2020 2102019 1572018 114

2.311

+36%

+36%

2030

2025

2020

2018 1.256

2019 1.720

2017 8642015 376

2016 600

2014 1942013 103

+65%

9.009

+32%

Market size Public EV Charging
Est. revenues in EU28+2 (mEUR)
33.738

Vehicle Park (BEV + PHEV)
passenger cars in EU 28+2 (k)Source: Arthur D. Little analysis, European Alternative Fuels Observatory, Bloomberg

The expected market uptake is attracting new, eager investors.
Today, margins of public EV charging players are low and ROI isnegative. However, big oil companies such as Shell and BP havebeen proactive in securing their shares of the market.

With a rising number of EVs, infrastructure and end-customer
solutions are working to keep up. North European countries,in particular, have built up impressive charging infrastructures,and the industry agreed on a European plug standard (CCS).
The Netherlands alone is operating more than 40,000 publiccharging points; this means CPs are found on the road every
3 km, on average. End customers can also select from a big
variety of charging cards, which offer access to more than
100,000 charging points all over Europe. Basic electric vehicle
charging services are on their way to becoming a commodity;
we can already see the first signs of industry consolidation in allvalue-chain steps. It is clear that small, independent players will
only be able to survive if they can offer innovative solutions that
distinguish them from the rest of the market.
Still, the European charging market shows high fragmentation,
both regionally and along the value chain. However, theexpected boost, consolidation and evolution of business models
have led to the assumption that the market stands on thethreshold of disruption. Some players have started to integratealong the value chain, while others have diversified into adjacentbusiness models to expand their scale, reach and service
offerings.

The public EV charging value chain today
Historically, there have been three roles in the public EV value
chain:
nnCharge point operators (CPOs) run and maintain the
charging station. They do not necessarily need to own theViewpoint

charging infrastructure. Their tasks can be separated into
technical (deployment, operation, maintenance) and financial
CPOs (marketing, pricing), and both parts can be fulfilled bydifferent entities. Unsurprisingly, this business was originallyformed and dominated by utilities. A high number of small,regional players are active in this field.
nnnn

Mobility service providers (MSPs) offer service contracts
to end customers and provide the user interface for accessto and usage of charging infrastructure. Today, practicalaccess to charging is mainly through RFID cards and apps.
A key success factor is to offer the end customer easy
access to as many charging points as possible, regardlessof the user’s location. Historically, automotive OEMs were
front-runners in enabling long-distance e-mobility for their
EV customers and offering additional services via thecustomer interface (cross-selling of other mobility services).
However, as this is a software-intense business, manysmall, innovative IT start-ups have entered and now directlycompete with OEMs (e.g., NewMotion, Plugsurfing, Virta).
eRoaming platforms act as aggregators of the two otherroles, connecting CPOs and MSPs. They release MSPs
from the labor-intensive task of directly and individually
coordinating with the many CPOs. Currently, the market
is divided between just a few platforms. Aggregators suchas Hubject and Gireve were put in place by energy andautomotive companies. Their key success factor is offering
MSPs and CPOs access to as many partners as possible.

The evolution of EV charging business modelsThose value chain roles are still valid today. But value chain
integration has started, and only a few pure players are left
in the market. Business models are undergoing change, as
illustrated in below figure.
Charge point owners (points of interest), such as shopping
centers, restaurants and gas stations, need to cope with the
improved charging performance of new electric vehicles. They
will have to upgrade their infrastructure to higher charging
speeds. This is especially true as drivers of battery electricvehicles (BEVs), with battery capacities of 90kWh and more,demand charging speeds of at least 150kW for public charging
incidents.

CPOs vertically expand across the value chain
Charge point operators are currently the most active players
along the public EV value chain. Because the network ofcharging points is wide-meshed in most markets, growthpotential still comes from improved geographical coverage.
Besides building up new locations on their own, CPOs may offer
customized turnkey solutions to B2B and B2A customers andoperate them as full-service providers (at least technically) afterdeployment.

2The evolution of public EV charging

Simultaneously, bigger CPOs, in particular, are starting toaggregate other CPOs in order to grow (i.e., in terms of charging
network size, customers and revenues) and leverage scaleeffects. This is a win-win situation for both sides, as operationof additional charging points creates only marginal costs for theaggregating CPO, and the smaller, integrated CPO no longer
needs to invest in proprietary costly software solutions.
By reaching a critical size, the CPO becomes more and more
attractive to MSPs for direct connection, and both players avoid
the fees of eRoaming platforms. In addition, the CPO is in a far
better position to negotiate with MSPs, as it can actively decide
who to give access to the charging network. Direct CPO-MSP
connection via the bilateral OCPI protocol is currently being
pushed, especially by Dutch players.
Many CPOs go even further, leveraging their increased size
to offer their own MSP services. As a result, they collect theentire margin and get direct access to end customers. Classic
examples of this strategic move are big utility CPOs such asEnBW. However, CPOs with unique selling propositions (fastcharging), such as Fastned, can also attract the end user’sattention.
CPOs have also expanded their offerings beyond the traditional
public EV value chain into the promising field of energy services.
They offer smart battery-buffer systems as part of full-service
turnkey B2B and B2A solutions to reduce operational costs. The
next step is to utilize the battery capacity of B2B fleet vehicles
via vehicle-to-grid (V2G/V2X) solutions.
Public EV charging trend map – Evolution of businessmodels in Europe
No need for dedicated aggregator
services anymore

Customer can pay with hiswallet at every CP

Peer2Peercharging/
Blockchain

Geographic expansion

Geographic expansion

White label

Customized B2B solutions

Plug & Charge

MSP fleet solutions

eRoaming

MSP

Customer

CPOMSP

CPOs get direct
customer interaction

POICPO

Direct connection
to avoid roaming
feesHigh power charging

Energy services for
POI owner

Meta-CPO
Aggregate

Energy services for
end-customer

Energyservices
V2G, V2X solutions
Business model

Key trend per business model

Source: Arthur D. Little, Expert interviews

MSPs are trying to diversify outside the publiccharging value chain
We currently see three major trends in the evolution of businessmodels for mobility service providers:
MSPs have already begun to expand their customer bases
from B2C to B2B customers by offering customized B2Bfleet solutions that integrate billing for home, work and publiccharging.

Viewpoint

Another key trend is for big players, such as Digital Charging
Solutions, NewMotion, Plugsurfing and Virta, to offer theircharging networks as full-service, white-label solutions tothird parties (e.g., DCS to Audi and PSA, NewMotion to Opel).
Therefore, it is not an attractive market for new players to enter.
MSPs have understood that offering basic charging services
will soon be a commodity, and that they need to distinguishthemselves from competitors. Differentiation is achieved
by either offering charging as part of an integrated mobility
platform (e.g., the NOW family by BMW and Daimler) or adding
intelligent energy services that help the end customer savemoney. OEMs, especially BMW and Volkswagen, have tried toconquer this market with subsidiaries such as Digital Energy
Solutions and Elli. IT players such as NewMotion, Virta andeMotorWerks (Enel X), are currently frontrunners in developing
V2G/V2X solutions.

now trying to focus on other services by leveraging their vast
technical and market knowledge. Hubject, for example, offers
consulting services in the fields of market research, technology,standardization, and calibration law. They help clients implement
plug & charge technology. However, this solution will not scale
as high as the original business model.

What are the implications on the market?
Electric vehicle charging alone is not yet a profitable business,but margins will increase as business models sharpen andvolumes rise. Today’s business model and offerings are very
similar and switching between suppliers is easy for customers.
In order to become profitable, most players are heading forscale, consolidations, and acquisitions. This process lowers
the level of fragmentation, but increases tension and forces all
players to evolve beyond their classic roles.
Major market stages of public EV charging
HarvestEmerging business models for new services
1. Vehicle-to-grid service (V2G): The EV battery is used
to provide flexibility to the electricity grid, and the EV
owner receives a financial contribution for making
their EV available. Feasibility and profitability of thetechnology are related to countries’ regulation andincentive mechanisms.
2. Vehicle-to-home service (V2H): The EV battery is used
as an energy supplier in case of a blackout, for peakshaving, and as an energy management system that
reduces energy costs. V2H technology requires – apartfrom EVs that manage “reverse flow” – a “smart home”
whose main domestic appliances are connected andremotely managed.

eRoaming platforms are stuck in the middle – The
historical business model is at risk
The originally favorable, asset-light positioning of eRoaming
platforms as aggregators between CPOs and MSPs is being
threatened from several sides. CPO aggregators are taking
more and more responsibility from eRoaming platforms, andMSPs are aiming for direct connection to avoid fees. Looking
into the distant future, blockchain solutions could even makethe aggregator business model obsolete. LO3 energy andShare&Charge are currently working on pilot solutions thatseamlessly expand beyond geographical borders and therestrictions which come with individual MSPs.
Unfortunately, eRoaming platforms cannot expand vertically into
other stages of the value chain. This is because those stages
are often already occupied by shareholders which have nointerest in such a move. Consequently, eRoaming services are

GrowthConsolidation
Seeding(2010–2016)◼ No market , nodemand and noreal competition◼ Mainly large
OEMs and utilities
in the market◼ Start-up entrants
for nicheapplications(2016–2021)◼ Slow overallgrowth◼ Integration andconsolidation◼ High amount offunding to secure
market position◼ New entrants by
M&A activities (oil& gas)(2021–2026)◼ Significant growth◼ Break-even◼ Furtherconsolidation &internationalization◼ Last chance toenter the market(2026–2030)◼ Large-scale effects
for small numberof players◼ High revenues andhigh profits◼ New market-sharegains areextremely costly◼ Small number of
big players aredominating???
Source: Arthur D. Little analysis

We expect the public electric vehicle charging market to go
through four phases. The seeding phase was characterized by noreal market demand from customers and no real competition.
High initial investments were often publicly funded, andautomotive OEMs or large utilities invested to support EV
market uptake or mark their ground. Towards the end of thismarket stage, the expected market uptake triggered a goldrush atmosphere and many start-ups entered the game with
innovative niche applications.
Today we are in the consolidation phase. Relevant massmarket EVs are available and we are seeing slow but steadyoverall market growth. Big players such as Shell and BP areentering the charging market and willing to invest to secure
their established positions. Many previously independent niche
players have been acquired, and the whole industry is heading
towards scale.
In the third phase, which we expect to begin after 2021,
significant growth in EV sales will generate revenues from EV
charging, which will finally help companies reach or surpass
break-even. At this time, we expect integrated players, ongoing
The evolution of public EV charging

3Viewpoint

consolidation and internationalization. It will be the last chance
to enter the market from outside. In the end, we expect to see asmall number of pan-European top dogs dominating the market.

Contacts
Austria

Middle East

After 2026, we will probably know who has won theconsolidation game. The remaining top players will haveleveraged their high-scale effects to harvest large profits.
Additional gains of market share will be extremely costly, and it
will be almost impossible to enter the market at this stage.

Belgium

The Netherlands

China

NorwayCzech Republic

Russian Federation

What are the key success factors for each role?

FranceSingaporeGermanySpainIndia

SwedenItaly

Switzerland

JapanTurkey

Korea

UK

Latin AmericaUSAFor CPOs, it is pretty simple: EV charging is a scale game,and the winner takes it all. Besides expanding their networks
by aggregating smaller players, CPOs must secure the most
attractive charging locations right now – especially for fastcharging services. A strong financial investor is beneficial toprovide headroom for organic and inorganic growth.
For MSPs, it is mainly about diversification. Already today, asmall number of mostly integrated players are dominating
the market, and more competition is unlikely to join. MSPs
must either have the most intelligent energy services or offer
charging as part of integrated mobility platforms. OEM-relatedMSPs have the additional advantage of being able to lock EV
customers in if plug & charge becomes the market standard.
For eRoaming platforms, it will be extremely difficult to remain inthe game. Their core business models will most likely be takenover by CPO aggregators. Hence, it seems reasonable that theymust come up with new solutions. For Hubject, plug & charge
could be a lifeline. Nonetheless, eRoaming platforms’ biggest
threat is losing their current investors due to conflicts of interest.

Conclusion
The public EV charging market is still at an embryonic stage but
will offer tremendous growth opportunities in the next years.
However, companies that want to enter this market mustchoose their strategies wisely. Integration, consolidation andinnovation will change the market structure significantly, and firstbusiness models are already starting to become obsolete. The
consolidation phase, during which competition will intensify, has
just begun. Since public EV charging is on the way to becoming
a commodity service, size and growth potential are crucial, but
so is the uniqueness of a company’s business model. Uniqueservice offerings and innovative technologies are two additional
success factors that will determine the future of the EV charging
value chain.
It is not possible for investors to simply surf the growth wave
without taking risks. To identify the right target, they must
analyze charging in a broader sense and look at adjacentindustries. Because the window of opportunity will close soon,
it is now time to move.

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Authors
Alexander Krug, Thomas Knoblinger, Jean Bauer

Arthur D. Little
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