How can the EV charging sector fuel the European economy?

Despite reports about slowing EV sales in Europe, the EV charging industry is expecting robust growth due to a steady increase in the proportion of electric vehicles in Europe. 

The industry is expected to add €92bn to the European economy, approximately the equivalent of Luxembourg’s GDP over the next 10 years, according to an independent study by management consultancy P3, commissioned by the industry alliance ChargeUp Europe, presented in Brussels on Thursday.

However, the economic impact of the charging industry cannot be compared to anything Europe has now.

“The world that is emerging is going to be significantly different,” said Secretary General of ChargeUp Europe Lucie Mattera, adding that the expected growth is coming from a “much broader ecosystem, which is going to comprise the car, the grid and the charging”.

The EU battery-making industry alone is expected to add 200,000 jobs by 2035, beyond the ones created by the charging infrastructure, she said.

According to the study, battery-electric vehicles will represent 44% of passenger cars in the EU by 2035. 

The necessary investment to charge all these vehicles will create a 545% total growth of the added value across the bloc, amounting to €92.4bn, according to the study. 

The amount is slightly bigger than the necessary investment by 2030, which is about €80bn, according to French multinational bank Societe General.

Almost half of the added value by the EV charging sector (47.8%) is expected to come from electricity sales by 2035. Another 14.8% from hardware, planning and installing the chargers would bring 9.5% of the value, while more than 5% would come from smart charging with another, slightly more than 5%, from operation.

Employment in the charging sector is expected to rise substantially from the current 61,000, mainly driven by jobs in electricity sales, operation, planning and installing and hardware. 

“We’re looking at 222,000 jobs by 2035. Roughly speaking, we are creating 15,000 jobs every year between now and 2035,” Mattera told Euronews Business, adding that the sector struggles to hire, as there is a serious lack of labour force equipped with the necessary complex set of skills, including electricians. 

Just one main obstacle: access to electricity

To reach the full potential of the e-mobility sector in Europe, the implementation of EV chargers needs to keep up with the rolling out of EVs. 

According to a report by the European Automobile Manufacturers’ Association (ACEA) there is an alarming lack of charging points, currently numbered at some 630,000 across the bloc.

The EV charging industry doesn’t agree. They say they need to have more EVs to roll out before they need more charging points. 

But both parties agree that, above all, the connection to the electricity grids needs to be urgently addressed, as the biggest challenge ahead of the whole clean energy transition in Europe.  

Connecting to the grid, the complex network of transmission lines between producers to consumers, causes much of the delays in the current projects. However, there are differences in the various member states. 

“One country where it is extremely congested and it’s actually bad to the point that we have members of ChargeUp who are withdrawing from the market, because it is just impossible to get access to the grid, that’s the Netherlands,” said Mattera, adding that too much delay destroys the business model of the operators. 

A better example is France, which is doing relatively well compared to other countries, according to the Secretary-General. 

She also said, however, that the overall process of full grid connection including the permitting processes could take an average of two years across Europe, while the same takes three months in China. 

“And it is getting worse,” said Mattera, as “everybody else is electrifying. Europe’s economy is electrifying. So everybody has got access to the grid. And so the grid connection requests multiply and multiply across sectors. And in the meantime, you have distribution operators who have the same resources, and don’t necessarily make the right level of investment.”

To solve the problem, electricity distribution operators in each country need to invest in expanding the grid. 

ChargeUp followed up on where the problem came from. They experienced that the lack of investment is the result of strict regulations, typically set by national energy regulatory authorities, limiting the base of investment that distribution operators are allowed to deploy. 

But energy regulators are carrying out mandates set by policymakers, therefore, updating regulations and opening the door to more EV chargers must come from the 27 national parliaments, according to the EV charging sector.

“It’s a legacy framework,” said Mattera. “It’s completely out of date with the climate policy objective that we have is saying to ourselves as a continent that that particular piece of the puzzle or the equation just hasn’t been modernised and updated.”

Refusing suggestions that EVs are overloading the grid, Mattera added that the “E-mobility sector represents 0.4% of total electricity demand in Europe today” and they expect that to rise tenfold to 4% by 2035.

Is there a lack of EV chargers today in Europe?

Charger operators at an event in Brussels on Thursday agreed that, once the issues of the grid connections are solved, there will be no major limitation to serving the market. 

They also emphasised that, at the moment, the charging industry can deliver and is not a bottleneck. 

According to ChargeUp, 26 out of 27 countries are up to date with their EU-targets and implemented the necessary number of EV charging points planned up until now (the only exception being Malta). 

However, the implementation of new EV chargers could be held back by uncertainty in regulations, industry representatives said, as the investment is quite capital-heavy (the cost of one charger is around €30,000-50,000 and the investment is for 40 years). 

Member of the European Parliament Committee on the Environment, Public Health and Food Safety Susana Pérez (EPP) at the event agreed that the EU needs to do more to support the E-mobility market, to roll out affordable EV models, put measures in place to boost demand, prepare the grid and work for competitive electricity prices.