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Significant capital resources are needed to deploy both AC and DC electric vehicle (EV) charging. At the same time, uncertainty is mounting over the scale of future EV sales, with just 3% of all light vehicles produced in 2022 expected to be plug-in hybrids or battery EVs, finds a recent report from IMS Research.

Many public and private entities are reluctant to invest heavily in EV charging, seeing it as both risky and unnecessary. With much of the charging infrastructure in place today having been funded in part or whole by government funds, IMS Research says concern should be mounting for the future health of the EV charging industry, particularly when the government money is switched off.

Alastair Hayfield, associate director at IHS comments, "The solution for the EV charging industry is to identify future business opportunities now, laying a framework of  education, awareness and push marketing. This will help build momentum before public funds decline."

Large fleet operators are, arguably, first amongst early adopters of EVs. The U.S. Department of Defense recently announced plans to spend $20 million on 500 EVs. This follows announcements from DHL, Pacific Gas & Electric and TNT about plans to extend the electrification of their respective fleets.

Parking garages also represent a prime opportunity for the EV charging industry. Indeed, much of the first wave of charging stations has been deployed in parking garages or at “on street” parking sites. Other opportunities will be slower to develop, but the report says they can be identified by following the maxim “where are people taking their cars?”

Realistically, most vehicle charging will occur at home or at a place of work, as these represent the places where cars spend most of their time. Office buildings or commercial complexes, therefore, represent a substantial potential market, particularly if EV sales develop quicker than expected.

Companies with large offices and commercial property firms will need to develop charging infrastructure now and in the future, the report continues. However, identifying where the budget will come from for this investment is difficult. If a company doesn’t own its office building, the decision to fund the investment may reside with the property management firm or the building’s actual owner. In this instance, the decision to invest will be based more on whether the firm managing the office building thinks EV charging facilities will attract or retain tenants, rather than a large number of tenants requiring charging.

Even if a company does own its own office building, funds for EV charging infrastructure may not be accounted for in the facilities budget. If that is the case, the budget may come from the company’s corporate social responsibility (CSR) or “green” program. IMS Research says the EV charging industry would be wise to target those companies with well-established CSR programs, particularly those with sizable corporate vehicle fleets or significant numbers of commuting employees.

Beyond home and work place charging, the EV charging station industry would be smart to concentrate on transport nodes - train stations, airports, etc., the report adds. Major airports, like Heathrow and Gatwick in the U.K., have already deployed charging stations in short-term parking facilities. Travelers arriving by vehicle will require charging facilities, particularly if the vehicle is being left for some time or a lengthy journey is required on their return.

Finally, “attractions” should be a focus of attention for the EV charging station industry. Attractions include malls, restaurants, theme parks, etc. - any location where drivers are likely to stay for several hours at a time, IMS Research says. Statistics from the U.S. Travel Association indicate that beaches and fine dining were among the top five destinations for domestic U.S. travelers in 2011. Attractions will need to be persuaded as to the merits of offering charging, particularly if for free. However, IMS Research says attractions always face competition and EV charging facilities represent a clear way to differentiate.

“No doubt the EV charging industry has plans to develop beyond the [government-led] initiatives seen at the moment,” says Hayfield concludes. “However, the major challenge will come in finding commercial funding and providing education to businesses. EV charging isn’t simply about providing plug points. Businesses need to understand the full cost of installation and operation, the correct business model for them, and the likely use cases at their facilities.”

Hybrid Energy Innovations 2015
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