Study: headwinds slow growth of commercial EV charging infrastructure

A recent report from ABI Research characterized global charging infrastructure growth as steady but slow and cited inefficient processes for developing new infrastructure as a key impediment.

According to Abujayed Miah, research analyst for ABI Research with expertise in the smart mobility and automotive sectors, the infrastructure issue suffers from a “chicken and egg” scenario between fleets and infrastructure operators.

Henrik Holland, global head of Prologis Mobility, plugs a Volvo electric truck into a charger at a trucking company yard in Los Angeles, Calif., in March 2023. (Photo: Reuters/Lisa Baertlein via Reuters Connect)

“One can’t progress without the other,” he said. “They’re not going to build the infrastructure unless the electric vehicles are out there, and the electric vehicles aren’t going to get out there if the infrastructure is not ready.”

Private Investment Trend

Miah does see a trend in commercial vehicle charging that mirrors that of the early days of electric passenger vehicles.

“There was some early leadership among private companies building their own charging networks — Tesla, for example,” he said. “And it’s a similar trend that we see for commercial vehicles.”

According to Miah, much of the work currently being done is by private companies, often supported by government subsidies, that are both building charging depots and doing research into battery technology for heavy-duty commercial vehicles.

“When the installed base is out there to warrant further investment is when I think we’ll see the public spending start to ramp up,” he said.

Underdeveloped Grid Infrastructure

Another reason charging infrastructure adoption is so slow is because of challenges in the grid itself.

“For EVs to really proliferate, it requires some grid-level infrastructure upgrades. The grid is not built for purposes of commercial EVs to be going up the I-95 and down every day,” he said, using the main U.S. East Coast interstate highway as an example.

Such upgrades take time, and Miah said that there is significant variation in the lead time required to accommodate a charging depot’s energy rating.

“I’ve heard anywhere from, earlier on in the industry, six to 12 months, and then one vendor told me the other day that they were quoted seven years,” he said. Variables include geography and bureaucracy as well as whether EV charging is established in the area or just starting out.

“Lead times are getting longer, and they are only going to get longer as commercial EVs start to proliferate,” Miah said.

North America Lags

The ABI report indicated not only does the North American charging infrastructure for commercial electric vehicles (EV) lag significantly behind the rest of the world, but significant growth in the region is also not expected in the near future. Miah explained why.

Photo: ABCDstock via Adobe Stock

“A country that’s leading in this is China, and it’s for a variety of reasons,” he said. “The first I’d say is they had really early adoption in the space. They were shipping commercial EVs and trucks in 2016 or 2017 at fairly high levels.”

Miah also cited the high number of Chinese OEMs producing commercial EVs. Then there’s China’s battery manufacturing, which is significantly more extensive than anywhere else in the world.

Government support for EVs in China is also key to that country’s leadership position.

“They’ve for a long time had strong subsidies, incentives and policy support for EVs, both in development and adoption,” Miah said. “And that’s something Europe is also doing very well on. It varies a little bit regionally. Germany, for example, is very strong there.”

Subsidies for the purchase of EVs in China are substantial, as well, Miah said, and many European companies offer similar such subsidies.

“When you compare it to the U.S., you see maybe a couple of states here and there have some strong incentives. California, for example, does quite well with their funding. But it’s something that is not widespread at all.”

U.S. Uncertainty

Miah noted that the new Trump administration is not as supportive of vehicle electrification as the Biden administration was. That means that projects that have already been confirmed and planned will move forward, but funding for new projects will likely dry up. That means for commercial vehicle electrification to survive, private investment will be required.

“It [will be] private-funding-led for the time being,” Miah said. “Charging at customer depots or charge points where a fleet operator can run it instead of relying on that public infrastructure.”

Nonetheless, it’s reasonable to expect the global drive to net zero, and electrification as a key technology for meeting that objective, will continue.

“Reaching 2050 net zero, for example, is a big point for many countries,” he said. “Any country in the Paris Agreement will have regulations around decarbonizing fleets by 2035, 2040. Some are more hopeful than others. We see a lot of variation in the timelines, but the fact that this transition has to happen isn’t something that’s disputed.”