Focus: EV charger station firms battle for prime locations in Europe, US

Kempower Oyj

13/12/2023 11:00

(Repeats FOCUS and GRAPHICS originally published earlier on Dec
13, no changes)
    By Nick Carey and Paul Lienert
       LONDON/DETROIT, Dec 13 (Reuters) - 
    Electric vehicle charging companies in Europe and the U.S.
have started fighting over the best spots for fast public
chargers, and industry watchers predict fresh rounds of
consolidation as more big investors enter the fray.
    Many current EV charger companies are backed by long-term
investors, and more are expected to launch. Looming bans in
various countries on cars powered by fossil fuels have made the
sector more attractive to infrastructure investors like M&G's
 MNG.L  Infracapital and Sweden's EQT. 
    "If you look at our customers, it's like a land grabbing
game now," Tomi Ristimaki, CEO of Finnish EV charger
manufacturer Kempower  KEMPOWR.HE  said. "Who gets the best
locations now can guarantee electricity sales in the coming
years."
    A Reuters analysis showed there are more than 900 EV
charging companies globally. The sector has attracted over $12
billion in venture capital funding since 2012, according to
PitchBook. 
        As big investors fund more consolidation, "the
fast-charging landscape will look pretty different from the
landscape that exists today," said Michael Hughes, chief revenue
and commercial officer for ChargePoint  CHPT.N , one of the
largest suppliers of EV charging equipment and software.
  
    Corporations from Volkswagen  VOWG_p.DE  to BP  BP.L  and
E.ON  EONGn.DE  have invested heavily in the industry, which has
seen 85 acquisitions since 2017.
See graphic: https://tmsnrt.rs/3QJRvKz

    There are more than 30 fast-charger operators in the UK
alone. Two new ones launched last month: Australia’s Jolt,
backed by BlackRock's infrastructure fund, and Zapgo, which has
received 25 million pounds ($31.4 million) in funding from
Canadian pension fund OPTrust.  
    In the U.S. market, Tesla  TSLA.O  is the biggest player,
but more convenience stores and fuel stations will soon join the
fray and the number of U.S. fast-charging networks will more
than double to 54 in 2030 from 25 in 2022, said Loren McDonald,
CEO of San Francisco-based research firm EVAdoption.    
See graphic: https://tmsnrt.rs/3we1njJ
    
    It can take four years for a properly placed EV charging
station to become profitable once utilization hits around 15%.
Charger companies complain red tape in Europe is slowing
expansion. Still, the sector is viewed as a good bet by
long-term infrastructure investors like Infracapital, which owns
Norway's Recharge and has invested in Britain's Gridserve.
    "With the right locations, long-term investments in
(charging companies) absolutely make sense," said Christophe
Bordes, managing director at Infracapital.
        ChargePoint's Hughes believes larger players will start
looking beyond existing sites for new real estate, purpose-built
for mega-facilities with 20 or 30 fast-charge dispensers,
surrounded by retailers and amenities.
  
        "There's a race for space," he said, "but it will take
longer than anybody expects to find, build and enable these new
sites for the next generation of fast charging."
  
    Competition for the best sites is becoming fierce and site
hosts can switch between operators before settling on a winner. 
    "We like to say there's no such thing as a dead deal when
you're talking to a site host," Blink Charging  BLNK.O  CEO
Brendan Jones said.
        
    "LOGOS WILL BE DIFFERENT"
    Firms are also competing for exclusive contracts with hosts.
    For instance, UK's InstaVolt - owned by EQT - has deals with
companies like McDonald's  MCD.N  to build charging stations at
their locations.
    "If you can win that partnership, it's yours until you blow
it," InstaVolt CEO Adrian Keen said.
    With EQT's "deeper pockets," InstaVolt plans 10,000 chargers
in the UK by 2030, has active chargers in Iceland, and has
launched operations in Spain and Portugal, Keen said.
Consolidation could start in the next year or so, he added. 
    "That might open up opportunities in the markets we're in,
but also open the door to a new market for us," Keen said.
    Utility EnBW's  EBKG.DE  charging unit has 3,500 EV charge
points in Germany, about 20% of that market. It is investing 200
million euros ($215 million) annually to hit 30,000 charging
points by 2030, leaning on local staff to fend off competition
for sites.
    The unit has also formed charging network partnerships in
Austria, the Czech Republic and northern Italy, vice president
of sales Lars Walch said.
    While consolidation is coming, there will still be room for
multiple operators, Walch said.
    Norway, a leading EV market, has suffered from short-term
"over-deployment" this year as companies raced to build out
charging stations, Recharge CEO Hakon Vist said. The market
added 2,000 new charge points to hit a total of 7,200, but EV
sales were down 2.7% through October this year. 
    Recharge has around 20% market share in Norway, just behind
Tesla.
    "Some companies will find they're too small to meet
customers' requirements and leave or sell," Vist said.
    Others are launching companies knowing they could acquire
others or be acquired themselves. 
    New UK entrant, OPTrust-backed Zapgo plans to target
under-served parts of England's Southwest, offering landlords a
slice of charging revenue to get good locations. It plans 4,000
chargers by 2030, said CEO Steve Leighton, who predicted
consolidation "will all come down to money" later this decade.
    "The funders who've got the deepest pockets will be running
that consolidation," Leighton said, adding OPTrust "is big, but
one of the larger infrastructure funds might come along and want
to pick Zapgo up at some point." 
    The U.S. market will shift as convenience store chains like
Circle K and Pilot Company, and retail giants like Walmart
 WMT.N  invest massively in charging stations, EVAdoption's
McDonald said.
    "Like all industries started by a bunch of small startups,
over time the big guys jump in and ... they consolidate,"
McDonald said. "At the end of this decade, the logos are going
to be very different." 

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    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Electric Vehicle Fast Charging Networks Electric Vehicle Fast
Charging Networks    https://tmsnrt.rs/3R00Mwk
Venture investment in EV charging startups Venture investment in
EV charging startups    https://tmsnrt.rs/3QObzvb
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 (Reporting By Nick Carey and Paul Lienert, editing by Ben
Klayman and David Gregorio)
 ((nick.carey@thomsonreuters.com; +44 7385 414 954;))