IMPROVED Corporate Finance and P3, an international technology and management consultancy, have published a report explaining that the enhanced integration of electric vehicle (EV) charging in a smart and connected environment will be the key success factor in the mass adoption of electric mobility. Importantly, it will enable up to €5 billion of incremental annual revenue in Europe only by 2030.
The co-authored white paper “Smart Charging: The Upcoming Revolution of Electric Vehicle Economics” is the first analysis of this kind to be conducted in the Smart Charging domain.
It looks at the most recent market developments and investment activity in Smart Charging. The report outlines the roadmap for Smart Charging, the expected evolution phases and business models, the technical enablers and the future market potential. The paper also includes a detailed overview of global investment and M&A activity in the Smart Charging domain.
According to the research, Smart Charging offers significant business opportunities for numerous established and new players within the electric vehicle charging ecosystem.
The creation and investment in valid cross-industry “ecosystems” based on powerful standards and interfaces, will unleash attractive business models and a €5 billion market in annual revenue of hardware, software and value-added services in Europe by 2030.
When looking at the investment activity and capital formation in the sector from 2019 to 2021 global Smart Charging investment activity multiplied nearly six times, with growth accelerating further since the first half of 2021.
As such, the total transaction volume globally increased from eight transactions in 2019 to 51 transactions in 2021. Similarly, the total transaction value increased nearly six times from €205 million to €1.8 billion in 2021.
Dominique Houde, Partner at IMPROVED commented, “Given the massive growth in energy demand of electric vehicles, only smart and truly efficient EV Charging infrastructure will enable a successful transition to mainstream E-Mobility. The integration of EV charging in the electricity grid and energy systems represents the “revolution within the revolution” in the road to achieving sustainable transportation. The ecosystem of companies providing hardware, software and full solutions enabling smart charging is now taking shape, leading to an unprecedented inflow of capital driving this crucial sector.”
Jan Traenckner Senior Advisor E-Mobility at P3 added: “Being the key enabler, Smart Charging presents a gamechanger in EV Economics. While investment and M&A activity in Smart Charging is accelerating rapidly as the market is gaining scale, limited analysis and overview has been put together to assess this emerging sector, the investment and M&A trends, and its overall economic potential.”
Johanna Heckmann, Head of Charging Infrastructure at P3 said: “The capital formation growth rate has been far superior to the growth of the E-Mobility market of about 40% per year, underpinning a strong appetite to capture future potential, a “landgrab” of market share, and the increasing value-added of the products and services offered by these companies.”
Bas Hendriks, Senior Associate at IMPROVED concluded: “The Smart Charging domain offers an attractive business case for investors, as rapidly increasing unit economics and commercial feasibility of Smart Charging applications present significant new opportunities with high potential returns. Ultimately, Smart Charging will be key in enabling the inevitable transformation of the mobility sector from fossil to renewable and emission-free sources.”
Ade Thomas, Green.TV founder, said: “Smart charging is the key to both unlock the mainstreaming of emobility, and of a dynamic marketplace for renewable energy. This report from P3 and IMPROVED is a clear signal to investors that the water for emobility is warm, and that they should jump in.”
Ohme Smart Charging told us there are three main areas where smart charging adds value to the system. The first is the system operator-side facilitating the balancing of the whole energy system using demand side operations.
The second is the network operator side protecting asset on low voltage networks from being overloaded at peak times, and thirdly, the energy supplier side helping a supplier hedge and manage their trading books.
Dave Watson, Ohme CEO, said: “The increasing volatility of energy demand and energy supply has made it clear that the energy system needs to be dynamic and, in being so, much more robust.
“Without smart charging, systems will be less efficient with much higher energy prices and result in expensive system upgrades and backup generation.
Current systems are managed top-down.
“For the system to be managed bottom-up, and to avoid rationing, the system must be able to collect data at the driver level. The necessity for more dynamic and robust solutions will be the key driver to supplier-led and system operator-led smart charging solutions.
“Incentives are a strong driver for companies to accelerate the development and implementation of smart charging solutions. Mandating hardware requirements is a less efficient way of trying to create smart charging solutions.”
To download the report press here.