The global EV charging market is exploding.
The IEA estimates that around 26 million electric vehicles (EVs) travel the world’s roadways, and that figure grows every year. And all those EVs require electricity—so it’s no wonder the global EV charging market is also taking off.
EVs top up at charge points, collectively called electric vehicle supply equipment (EVSE). Think of EVSE like gas pumps for EVs, but unlike gas pumps, they can be installed anywhere with electrical infrastructure—parks, parking lots, and even gas stations.
By the end of 2022, we saw 2.7 million public charge points installed worldwide. A whopping 900,000 of those charging points were deployed that year alone, an EV charging market growth of around 55% YOY.
As the EV charging market swells, the question arises: How big is the EV charging market, and what trends drive its growth?
Estimating the EV charging market size is tricky. Organizations value the total size differently according to their respective EV charger market analyses. All estimates, however, agree that the global EV charging market size is growing at a rate that has returned to the levels seen before the COVID-19 pandemic when EV sales—along with sales of many things—slumped.
Estimates of the global EV charging market place its value anywhere from $17 to $26.3 billion across 26 countries. This wide disparity in calculations can be credited to accounting methodology, types of EVSE counted, and which countries are included in the analysis.
Growth projections for the years ahead are much more closely aligned. Most estimates put the expected compound annual growth rate (CAGR) at around 28% through 2030. This figure implies that the EV charging market will swell to roughly $128 billion over the next seven years.
Let’s put these estimates in perspective: The global market for all vehicles in 2023 is estimated at $2.6 trillion, but it’s only expected to grow by 5.62% CAGR between 2022 and 2032. EV sales are scaling faster than ICE vehicle sales, and the EV charging market is keeping pace.
Multiple factors are driving rapid EV charging market growth. Consumer sentiment is the most significant factor. EVs make up around 15% of the global personal vehicle market share, with over 1 million new EVs registered worldwide in May of 2023 alone. This figure represents a 50% increase in year-over-year (YOY) sales of EVs, and supply is naturally driving demand. But there are other factors at play.
Government legislation is also helping to drive EV charging market growth. While some laws target C02 emissions, indirectly encouraging the use of lower-emitting vehicles, others aim to directly promote growth in the global EV charging market.
In 2020, the European Union passed regulations setting emissions targets for cars and vans to achieve a net reduction in emissions of 50% by 2030. These regulations were amended in April 2023 to strengthen the emissions reductions with a new goal of 100% emission reduction by 2035. Policymakers expect these emissions reduction goals to drive significant EV charging market growth.
China also passed legislation aimed at spurring growth in the EV market. The country’s New Energy Vehicle Mandate (NEV), closely modeled after the U.S. State of California’s Zero Emission Vehicle Mandate (ZEV), awards credits to manufacturers who make or import EVs while setting limits on fuel consumption.
In Canada, the government passed regulations in late 2022 spelling out a requirement that all new passenger vehicles and light trucks sold in the country after 2035 be electric, zero-emission vehicles. The restrictions begin phasing in gradually, starting in 2026, and are expected to help stimulate Canada’s EV manufacturing.
In the U.S., too, there has been significant activity. In March 2023, the U.S. Department of Transportation launched the Charging and Fueling Infrastructure (CFI) Discretionary Grant Program as part of the Bipartisan Infrastructure Law, making $2.5 billion available for installing EV charging and alternative vehicle fueling infrastructure over the next five years. The program has two tracks:
Corridor Charging: To deploy EVSE and hydrogen/propane/natural gas fueling infrastructure along designated alternative fuel corridors.
Community Charging: To install EVSE and alternative fuel in locations along public roads, at schools, parks, and publicly accessible parking facilities.
According to the U.S. Department of Energy’s National Renewable Energy Laboratory Q1 2023 report, there has been a 3.2% increase in the number of EV charging points in the U.S. in Q1 of 2023. The CFI grants are expected to result in the addition of tens of thousands of EV charging stations throughout the U.S.
As the EV charging market scales, it must address several issues.
Despite advances in charging technology, it’s still slower to charge an EV than fuel a gas-powered vehicle. This may change in the years to come, but for now, EV charger owners need to be mindful of the different charging speeds to expect. Charger speeds and connector types will undoubtedly influence EV charging market growth.
Given that Level 1 chargers’ slow charging speeds mean they’re only suited to home use, EV charging businesses will choose between Level 2 and Level 3 chargers. Level 3 (or DC fast chargers) deliver the quickest charge but require specialized installation and a stable electrical infrastructure. They’re also a hefty upfront investment, but the tradeoff is a charging time measured in minutes instead of hours and, therefore, a faster customer turnover. Due to the significant speed advantage, public investment in EVSE infrastructure is also likely to focus on Level 3 chargers.
There is also the matter of connectors. Currently, four major connector types are in use at EVSE in North America. Which type an EV uses depends on its manufacturer. Many charge points have multiple connectors, allowing various vehicles to charge, but some are limited to just one.
Although it sounds counterintuitive, the lack of public charging points can be a direct impediment to the growth of the EV charging market. Many vehicle shoppers may have anxiety about finding a charge point when they need one, which may lead them to opt for an ICE vehicle instead.
This trend reduces demand for EVs, thereby reducing the need for EVSE. It’s a vicious cycle. That’s why investing in EVSE infrastructure at a faster rate than the demand for EVs may spur the entire market's growth.
Many locations lack the electrical infrastructure to support EV charging. Overhauling older construction to support fast chargers or install more Level 2’s can cost hundreds of thousands of dollars. A crucial solution is power management—software-based load balancing that ensures the safety of EVSE installation while maximizing capacity. Power management software also has the added benefit of translating capex into opex while deferring the expense and hassle of infrastructure upgrades.
As it continues to grow, it’s worth considering the impact of the EV charging market in terms of environmental sustainability and economics.
Although demonstrably better for the environment than gas-powered vehicles, EVs still rely on the electrical grid for power. That means if the electricity in your location isn’t clean, EVs will contribute to pollution.
The cleaner our grid gets, the cleaner EVs will be. The same can’t be said for gas-powered vehicles. A gas vehicle will continue to pollute for its entire lifetime.
Although charging an EV will be cheaper in the long term than fueling a gas-powered vehicle, the cost savings will vary depending on where a person lives. Gas prices and the cost of electricity differ from region to region, so a direct comparison will depend on those factors.
Still, according to Consumer Reports, the cost of keeping an EV charged will almost always be hundreds of dollars less per year than fueling a gas-powered vehicle.
Without question, it’s the right moment to capitalize on EV charging market growth. Whether you’re managing EVSE distribution or running stations directly, pairing reliable hardware with sophisticated software is the key to scale. ChargeLab’s hardware-agnostic software solution streamlines the charging experience with built-in access control, payment processing, power management, and troubleshooting tools. Contact us today to learn more.