The electric vehicle industry is officially supercharged. Even as passenger car sales have stalled outEV sales surged by 40% in 2019 and stayed consistent in 2020 despite the COVID-19 pandemic and subsequent economic turndown. That eye-popping growth will soon be the norm, as analysts predict the worldwide EV market will maintain a compound annual growth rate of 40% for the next six years.
But we’re barely scratching the surface of EV growth: While electric vehicles sales are still comparatively low stacked up to traditional internal combustion vehicles, the EV market share is expected to top 10% within the next four years. By the end of the decade, studies indicate that as many as a third of all vehicles on the road in America will be EVs — and if you pull up to a red light in 2040, more than half of the vehicles around you will run on electricity.
From the earliest days of EV Connect, our mission has been to build a better planet by enabling the distribution of electricity as a fuel — not only for the health of our business, but for the protection of the entire planet.
I have watched the EV industry expand and grow at a modest rate over the past 10 years. But as more and more drivers adapt to EV technology, both the public and private sector are investing more heavily in EV infrastructure. Over the past year, we have witnessed unprecedented growth across the board for everything EV, and it’s only going up from here.
With Growth Comes Challenge
Of course, growth comes with some teething pains. The future of EV charging hinges on simplifying and streamlining the driver experience, then increasing the overall reliability of EV charging to support further EV adoption and the EV charging market as a whole.
Reliability can be improved in two crucial ways: making more charging available to drivers, and improving the infrastructure or building out the infrastructure (properly) can yield a better experience. EV Connect has been focused on reliability in partnership with utilities to support the investments in the infrastructure and to add more charging stations for drivers. The momentum is building and the industry is about to have massive growth — more than ever before.
1. The Policy Tailwind
In the past few years, we have seen a groundswell of policy initiatives from governments around the world, all supporting electric vehicles and moving us toward cleaner transportation alternatives. In January of 2020, the European Union implemented new vehicle emission standards which mandated electric vehicles into automaker model portfolios. China now requires 12% of all units sold by automakers to be EVs, and the percentage is scheduled to increase over time.
Further, it is expected that under the new Biden Administration, the U.S. will adopt a national policy similar to the rigorous standards in California and the other Zero Emission Vehicle (ZEV) states. EV Connect is proud to call California home, as the state continues to lead the way as a global proponent of vehicle electrification, including a statewide Low Carbon Fuel Standard (LCFS) carbon credit program.
Oregon has implemented a similar program, while Washington is expected to ratify a program of its own in the near future. Other states, such as New York and Massachusetts, are not far behind with their own programs, and provinces in Canada are likely to adopt LCFS programs akin to California. As more states incentivize EVs, it would not be surprising to see legislative proposals for a Federal Carbon Credit program in the future.
2. The Investment Tailwind
EV Connect’s products and services are currently approved for over $2.6 billion in active utility and local government incentive programs supporting EV charging. These investments represent more than 70 programs across 15 U.S. states. President Biden recently signed Executive Orders instructing his administration to electrify the Federal fleet of 600,000+ vehicles and facilitate investments in an additional 500,000 EV charging stations over the next few years.
These are merely the first forays into serious infrastructure investment. At the moment, the majority of U.S. government support for EVs comes in the form of tax rebates, incentives, and state and local pilot programs designed to ease the costs for both businesses and individuals looking to install charging stations and other equipment. But there is much more money on the horizon, especially as states commit to huge investments to build more charging stations, including $701 million in New York and $430 million in California — part of a broader $2.5 billion spend in the Golden State.
3. Mandate Tailwinds
Both at home and abroad, governments continue to roll out EV mandates of all shapes and sizes. In the last 6 months alone, the United Kingdom, California, New Jersey, Quebec, and Massachusetts have announced a ban on the sale of internal combustion vehicles within their borders by 2035.
Many other governments have expressed a desire to achieve similar goals in future years. An increasing number of local, municipal and city governments have implemented regulations that require EV charging in new parking lot construction, sometimes requiring that every new parking space be made ready for EV charging. Already, the U.S. government mandates expanding EV charging availability at Federal buildings and workplaces, to say nothing of local governments and municipalities everywhere from St. Louis and Boston to Florida and Illinois. We are witnessing the decentralization of personal transportation fueling in real time, and the opportunities for savvy businesses are just beginning.
4. Market Tailwinds
Finally, and perhaps most significantly, the financial markets are betting big on an electric future. The private sector has clearly recognized the potential and is investing heavily across the board in the EV industry, driving the values of EV startups into the range of the old guard of automakers. Tesla has seen its market capitalization rise to a level that makes it more valuable than the top eight largest traditional automakers combined, while the Chinese EV startup Nio market cap has peaked at numbers that rival GM. That iconic auto giant, by the way, just announced a staggering $20 billion investment to deliver 20 new EV models to the US market by 2023 — part of a larger trend as more car brands commit tens of billions of dollars to EV development.
The markets continue to reward vehicle electrification companies for their leadership and innovation, and have staked positions in companies that manufacture charging infrastructure and batteries, or develop platforms and programs designed to make the EV driving experience easier and more efficient. EV technology is advancing at lightning speeds, especially when it comes to battery range and prices, which means that EVs themselves are poised to become smarter, better, and more affordable with each passing year.
Charging Forward
Taken in tandem, these four tailwinds will power a bright future for EV charging. This is the time to add the infrastructure necessary to meet the growing demand for electric vehicles. The entire planet is racing to catch up with the speed of EV innovation and expansion, and businesses that don’t keep pace will be left behind.
