Sales of electric vehicles (EVs) are expected to accelerate strongly over the next few years, and along with that increase will come rapid growth in the deployment of charging equipment for the vehicles, according to a report from Pike Research.
Two years from now, more than 80 different models of plug-in EVs are expected to be available across the globe, and by 2017, more than 5.1 million will be sold globally.
The Asia Pacific region will have the highest demand for both EVs and EV supply equipment (EVSE), due to strong demand for vehicle electrification in China, Japan, Korea and Australia. Beginning in 2014, more than half of the global total of EVSE will be sold in Asia annually.
In many markets, the majority of customers who purchase an EV will purchase charging equipment for their home. At the same time, many cities and states are promoting the use of EVs and installing EV charging systems as a way to reduce urban emissions. More than 1.5 million locations to charge vehicles will be available in the US by 2017, and a total of 7.7 million locations worldwide, according to Pike Research.
This will translate into revenues of more than $4.3 billion for makers of EV charging equipment by 2017, up from $400 million this year. This represents a compound annual growth rate of 49%, Pike Research forecasts.
“Prices for EV charging equipment will fall by 37% through 2017 as costs are driven down by competition from large electronics companies as well as volume production,” says John Gartner, research director at Pike Research. “With each new EV model that gets launched, makers of charging equipment, city planners and retailers gain an increased sense that EVs are here to stay. This will encourage both the production and purchase of charging systems.”
The deployment of EV charging equipment will also affect electric utilities’ business models. Vehicle charging is likely to have little impact on grid operators’ ability to generate and distribute sufficient power to meet the additional load. In some areas, peak demand could be increased or the peak hours extended later into the evening if customers are not incentivized to charge during off-peak times, according to Pike Research.
However, the impact of power delivered through EVSE could shorten the life span of some neighborhood distribution equipment, such as transformers or power lines. DC charging will have the greatest impact on peak load, and several companies are exploring combining DC charging with stationary batteries and/or solar power to limit the cost of electricity and peak impact.
Some utilities are offering less expensive EV charging rates and time-of-use (TOU) pricing, with power purchased overnight costing a fraction of the peak power price.
The benefits of off-peak charging will encourage nearly all equipment purchases to be smart charging units that can be programmed remotely. A number of utilities are beginning to invest in information technology and other smart grid equipment to accommodate the increased load, according to Pike Research.
Trials are currently under way of vehicle-to-grid systems that enable EVs to respond to a grid signal by decreasing load or, with the required technology installed, return power from the vehicle to the grid. This application will be relegated to fleets for the next few years until the number of EVs available to participate becomes sufficient.
