There are currently about 26 million electric vehicles in use around the world, and that number is poised to go even higher. Between 2018 and 2022, the number of EVs on the road increased more than five times over, and some states are seeing year-over-year growth as high as 111%. And where there are millions of electric vehicles, there are opportunities—especially for those hoping to break into the EV charging business.
That said, getting an electric vehicle charging business up and running is far more complex than it appears. You first need knowledge of the current market, an awareness of trends and challenges EV business owners face, and a forward-thinking approach to growth. With a more comprehensive understanding of how the industry works, you’ll be well-poised to take your EV charging business to the next level.
The EV charging business: An overview
Ten years ago, fully electric cars were a rarity. Only 110,000 battery-powered vehicles were sold worldwide in 2013, representing a mere 0.04% of all cars on the market. Fast forward to 2022, and that market share has jumped up to 14%, with over seven million electric vehicles on the road. And since these cars need places to power up, this growth has led to massive opportunities in the EV charging space.
EV charging market size
The global EV charging market’s value is estimated at somewhere between $17 billion and $26.3 billion. Though the industry—like so many others—experienced a minor slump during the height of the COVID-19 pandemic, analysts agree that the demand for EV chargers has returned to pre-pandemic levels and is continuing to grow at a promising rate. Estimates put the expected compound annual growth rate (CAGR) at around 28% through 2030, indicating that the EV charging market should grow to around $128 billion in the next seven years.
How legislation fuels growth
The increasing demand for electric vehicles is just one EV charging industry trend driving growth. Government legislation spurred by sustainability concerns is another. Laws targeting CO2 emissions indirectly encourage the use of electric vehicles, thereby spurring growth in the EV charging marketplace. Here are a few ways legislative bodies worldwide are creating opportunities for EV charging business owners:
- United States: In March 2023, the U.S. Department of Transportation launched the Charging and Fueling Infrastructure (CFI) Discretionary Grant Program, making $2.5 billion available for installing EV charging and alternative vehicle fueling infrastructure over the next five years.
- Canada: In 2022, the Canadian government passed regulations requiring that all new passenger vehicles sold after 2035 be electric, zero-emission vehicles. These regulations begin taking effect in 2026 and are expected to drive significant growth of the EV charging business in that region.
- Europe: In 2020, the European Union passed regulations outlined vehicle emissions targets designed to reduce emissions by 50% over the next decade. In April 2023, the EU strengthened these targets and is now aiming for 100% emission reduction by 2035.
- China: Modeled after similar legislation passed in California, China’s New Energy Vehicle Mandate (NEV) awards credits to manufacturers who make or import electric vehicles.
Common challenges of EV charging businesses
Despite the exponential growth the EV market has experienced over the past decade, EV charging business proprietors still face several obstacles. The first is charging speed; even with the advent of Level 2 and Level 3 chargers, it’s still slower to charge an EV than it is to refuel a gas-powered vehicle.
EV owners will be prioritizing charging speed while on the road, which—on paper—makes a fleet of Level 3 chargers the obvious choice for public charging. In execution, that comes with its own set of challenges: specialized installation, a stable electrical infrastructure, and higher electricity usage. Level 3 chargers also have big benefits since faster charging means more turnover and more customers, but charge point operators still need to weigh the pros and cons before deciding which chargers to install.
There’s also still a dearth of charging stations outside of major markets, which is often a reflection of the local EV marketplace or due to a lack of electrical infrastructure. That should mean more opportunities for entrepreneurial EV charging enthusiasts to fill those gaps, but counterintuitively, this can also negatively affect marketplace growth. After all, car owners may be hesitant about going electric if they’re concerned about running out of power and having no place to recharge.
For more information about the current state of the EV charging industry, read the full article: How Big is the EV Charging Market?
EV charging business opportunities to explore
Even with the industry’s challenges, EV charging stations should remain in high demand as consumer interest in EVs grows and governments clear the way for better infrastructure. EV charging businesses typically fall into one of four categories: charging networks, which own and operate their own chargers; turnkey installers that specialize in hardware and software installation; service providers that go beyond installation to offer maintenance and financing; and consultants who can advise you on the most advantageous business moves in the marketplace.
Once you’ve chosen a model, it’s time to look at the three major market segments:
- Commercial: From office buildings to retailers to restaurants, most commercial businesses have parking lots—and those parking spots represent opportunities for EV charging businesses. From office buildings and retailers to restaurants and event venues, commercial spaces are a natural fit for EV charging infrastructure.
- Residential: Speed isn't as high a priority in residential spaces like houses and apartment buildings; after all, EV owners can simply plug their cars in overnight and start the following day with a full charge. To ease the installation process for residential EV charging, businesses should consider offering a complete plug-and-play package that includes installation, operation, and maintenance.
- Public-private partnerships: As part of their ongoing effort to reduce emissions and encourage the use of electric vehicles, the United States government is offering grants to EV charging businesses that enter into a public-private partnership and cities looking to boost their EV infrastructure. This model has already proved successful in places like San Antonio.
To learn more, check out 3 EV Charging Business Opportunities Worth Exploring in 2024.
Looking to the future: EV charging business forecast
The data shows remarkable growth in the electric vehicle market over the last decade, but what about the future? As stated above, the outlook is generally positive, but what’s driving this optimistic vision? There are a few factors brightening the EV charging infrastructure forecast:
- Public infrastructure investments: Alongside their pledges to reduce emissions, governments are heavily investing in EV infrastructure by granting funds to build charging networks. In fact, the United States recently approved a $5 billion investment in the growth of public EV utilities.
- Better charger compatibility: One of the biggest challenges of the EV charging business is making their services as accessible to as many EV owners as possible. While there were once numerous different plug sizes and software protocols making this difficult, the rise of universal EV charging stations is increasing interoperability and streamlining charging protocols.
- Increased viability of long-distance EV use: Consumer use of electric vehicles is only the beginning. Industrial advancements are making it possible for commercial long-distance vehicles and those transporting heavy machinery to transition to electric power as well. This will only increase the demand for fast, reliable EV charging stations and networks.
Find out more about the booming EV marketplace in the full article: EV Charging Infrastructure Forecast: Why the EV Space Will Boom in Years to Come.
Power your EV charging business with ChargeLab
When building an EV charging business, there are a lot of things to consider—locations for chargers, infrastructure partners, different market opportunities, and of course, the software that keeps chargers running. ChargeLab’s hardware-agnostic, interoperable software solution works as an operating system that controls all of your EV infrastructure from a single hub. Connect any OCPP-compliant charger and continuously monitor its status from an easy-to-understand dashboard, all while staying in control of end-user fees and payment processing. If you’re planning to deploy more than 500 charging ports in the next year, we can help! Get in touch to learn more.
