Focus: As EVs go mainstream, a rush for share of home charger market

Applied Energetics

20/07/2022 07:00

By Nick Carey and Paul Lienert
    BEDFORD, England, July 20 (Reuters) - With electric vehicles
(EVs) catching on, the scramble for market share among startups
selling home chargers is heating up and that will feed further
dealmaking in the sector as tens of millions of units are
installed globally over the next decade. 
    According to a Reuters analysis, more than 100 companies in
Europe offer home EV chargers and there are more than 50 such
companies in the United States. Many also sell public EV
chargers.
Here is a graphic: https://tmsnrt.rs/3yr3BgL
    Increasing regulations requiring software investments, from
cybersecurity to smart-charging capabilities, and rapidly
growing sales will only accelerate market consolidation,
industry executives said.      
    "It's a hot sector, it has attracted a lot of talent and
capital," said Carlos Fisch, a director at Madrid-based venture
capital firm Seaya Venture, which specializes in disruptive and
sustainable technologies and owns around 8% of Spanish charging
company Wallbox NV  WBX.N . "We expect a big consolidation."
    Fisch said the real winners will be those with superior
software to manage power in the home and "bidirectional"
charging, allowing EV owners to charge cheaply overnight and
sell power back to the grid at higher rates during peak hours,
"turning the battery from a cost centre into a profit centre."
    Consolidation has already begun, with a number of small
startups snapped up. Among the acquirers getting in to the
market are utility companies like France's EDF  EDF.PA  and
Norway's Statkraft  STATKF.UL , oil giants including BP Plc
 BP.L  and Shell  RDSa.L  and others. German industrial company
Siemens AG  SIEGn.DE  has a home charger business and Volkswagen
AG's  VOWG_p.DE  EV charging unit, Electrify America, entered
the residential market in early 2021.  urn:newsml:reuters.com:*:nL1N2YN1LT
    Although charging for EV owners who park on the street is a
major challenge for U.S. and European cities, around 60% of
homeowners in Britain and the United States have access to
parking at home.  urn:newsml:reuters.com:*:nL1N2R915W  
    Juniper Research estimates 35 million home chargers will be
installed globally by 2026. Ernst & Young forecasts Europe alone
will have 56 million home EV chargers by 2035. 
    Home chargers range in price from about $600 to over $1,000,
not including installation, so tens of billions of dollars are
at stake. EV owners with home chargers use them for an estimated
80% of charging.
    "We're in this because we think it's going to be a huge
market," said David Martell, chief executive of recently formed
British EV home charger startup EVIOS. 
    Martell, who previously founded EV charger company
Chargemaster which BP bought in 2018 for over 130 million pounds
($155.3 million), plans to expand EVIOS into Germany and the
Netherlands in 2023.
    But there is more at stake than just chargers.
    For companies that eventually sell millions of chargers, the
data they gather could generate revenue from balancing local and
national power grids. 
    "The first battle will be over making the most money off
selling and installing home chargers," said Charlie Cook, CEO of
Rightcharge, a UK firm that helps EV owners find the right home
charger and low energy tariff. "The next battle will be between
the companies that control the flow of energy to and from those
charge points." 
    
    'SCALE UP, NOT START UP'
    Growth in the EV charging market will favor companies that
build scale.    
    EVIOS has designed a charger that CEO Martell says is
designed with a user-friendly app that can work with Amazon.com
Inc's  AMZN.O  Alexa or Google Home, link up to solar panels and
allow eight different users so neighbours can use it (and enable
the owner to bill them). 
    The startup joins a busy UK market alongside established
firms like Pod Point  PODP.L , which as of December 2021 had
137,000 chargers installed. Pod Point also sells office EV
chargers and public chargers, and CEO Erik Fairbairn said Pod
Point's revenue is up 86% this year while its home charger
business is growing faster.
    Pod Point has also signed deals with BMW  BMWG.DE  and
Mercedes-Benz  MBGn.DE  to be their preferred UK supplier. 
    "We are entering a phase which I call scale up rather than
start up," Fairbairn said. "The opportunity for small innovative
companies to make major inroads into home charging is probably
behind us." 
    Wallbox, which sells home, public and office chargers, has
operations across Europe and launched on the U.S. market last
year. Last month, Nissan Motor Co Ltd  7201.T  said it would
offer Wallbox chargers to U.S. EV buyers. 
    Wallbox has sold around 200,000 chargers so far and expects
revenue to increase by up to 190% to 205 million euros ($206.8
million) this year and hit $1 billion by 2025. 
    CEO Enric Asuncion said Wallbox is currently not in the
market to buy other charger makers. Instead, he said Wallbox is
seeking opportunities to boost profit margins with new
technologies and services as it did with Electromaps, a European
app for finding charging stations that it bought in 2020.
    "But we are obviously looking at all the options," Asuncion
said. "Eventually the market is going to consolidate." 
        
    'MONETIZE THE DATA'
    Asuncion added that a growing number of regulations
requiring swift software upgrades would also winnow out smaller
companies. For instance, as of July all UK home EV chargers must
by default charge outside peak hours for energy use - with
random staggered starts so they do not all switch on at the same
time. 
    Responding to regulatory changes requires sophisticated
software and data, Asuncion said.
    U.S. consumers have been slower to embrace EVs, but that is
changing. Although Europe is Wallbox's largest region, the
United States is its largest single market, as it is for
Siemens. 
    "We've seen the U.S. demand for residential charging
dramatically rise and really come on par with Europe," said John
DeBoer, head of e-mobility for Siemens in North America. 
    Rob Barrosa, Electrify America's senior director of sales,
said the public-charger company has entered the U.S. home
charger market because it sees a "big need" to provide
ubiquitous charging solutions.
    Home EV charger makers are already looking at the potential
for their chargers' data.
    Wallbox's chargers should become "energy management tools,"
especially as bidirectional charging becomes more common, CEO
Asuncion said. The company already offers a bidirectional
charger.
    Bidirectional charging enables EV owners to power up during
off-peak hours overnight, then sell energy back at higher rates
during peak daytime hours.  urn:newsml:reuters.com:*:nL1N2UE0V4
    Large home EV charger networks could also generate fees from
utilities by helping to balance out local and national power
grids, for instance, by having more cars taking an active charge
when there is more renewable power available or taking cars
offline if the grid is overloaded. 
 ($1 = 0.8371 pound)
 ($1 = 0.9912 euro)

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EV home charging startups on the rise    https://tmsnrt.rs/3bT74Nv
FACTBOX-Consolidation powers up in EV home charging sector   
 urn:newsml:reuters.com:*:nL1N2YN1LT
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 (Reporting by Nick Carey in Bedford, England, Paul Leinert in
Detroit and Christoph Steitz in Frankfurt
Editing by Ben Klayman and Matthew Lewis)
 ((nick.carey@thomsonreuters.com; +44 7385 414 954;))