Advanced Technology Insights: EV charging across the world – Currents of change

00:00:00: Welcome to What Tech Can Do, the podcast series from Roland Berger's Advanced Technology Center.

00:00:06: In each episode our experts discuss the technology and industrial shifts that decisive leaders can't afford to get wrong.

00:00:15: This series is for business leaders and investors who need more than analysis.

00:00:20: They need the operational reality behind this strategy.

00:00:24: In today's episode, we're focusing on electric vehicles and global charging infrastructure where you can expect to learn more about why EV adoption remains sharply divided across countries and regions.

00:00:37: How China is reshaping global competitive dynamics through its OEMs battery technology in growing international presence And Why Public Charging Infrastructure Rollout Is Intertwined With EV Adoption and be shift from aiming for as many plugs as possible to ensuring faster in use case-appropriate charging solutions.

00:01:00: Joining us for this episode are Adam Healy, Partner & EV Charging Lead And Aaron Chugger, Principal From The London Office.

00:01:09: Aaron Sowerby, Partner In the Energy Practice From The Chicago Office.

00:01:13: Jack Zhuang, Principal In Automotive Practice From Our Shanghai Office.

00:01:18: Martin Weisbart partner infrastructure investor support Europe lead from the Munich office.

00:01:24: And Stefan Riederle, Senior Partner in Automotive From The Munich

00:01:28: Office.

00:01:30: Aaron we've said this before and I'm sure will say it again but it feels like were at a pretty critical inflection point on electric vehicle adoption journey.

00:01:37: Why don't talk about that today?

00:01:38: Let's explore what is driving e-view adoption.

00:01:41: let us also explore how its differing around world because definitely not uniform.

00:01:47: Maybe let's also go into public charge point rollout and development, because as we know that is a pretty important intertwined factor driving EV uptake.

00:02:01: We will explore trends from around the world obviously going in to our EV charging index which covers thirty four countries.

00:02:08: looking at EV uptake ,looking at Public Charge Point Rollout .

00:02:11: Looking at EV user sentiment.

00:02:14: We're here from some of our colleagues.

00:02:16: We hear from Stefan on the European automotive sector, we'll hear from Erin on energy grids and their role in also bringing a US perspective will hit for Martin on investor sentiment which is important topic in this Sector.

00:02:30: And when I say here from Jack think On The Role Of China In Driving Electrification Globally.

00:02:37: But before we do that why don't you just give us A rundown of Some other headline figures?

00:02:43: What's going on?

00:02:44: Absolutely, Adam.

00:02:45: And maybe the first thing to say here as a part of the framing is that we are still in the early stage of adoption.

00:02:50: it isn't even but increasingly EVs are accepted by people at their first car and user base has ever expanding.

00:02:58: regionally does look very different though.

00:03:00: APAC Europe marching ahead America another parts not so much what we see his part about.

00:03:09: Globally, one in four cars are now electric of some variety.

00:03:13: One and six specifically a battery-electric vehicles... ...in terms of new sales that is coming into the market.

00:03:18: So overall globally we're at twenty million EVs Of which you know were talking about six to seven x increase over the last five years in terms of a number Of electric cars that we're seeing in the market.

00:03:30: and that's in terms is sales.

00:03:31: That's

00:03:31: correct Exactly, that's an annual

00:03:33: sale

00:03:33: annual sales that were seen in the Market.

00:03:35: if you look at some specific geographies Yes from a low base that numbers actually more like forty fifty times.

00:03:40: so really impressive staggering growth And it set to continue.

00:03:45: there are course headwinds and things in place for our.

00:03:49: Creating some challenges which I'm sure will explore over the course of this podcast

00:03:53: sounds good.

00:03:54: So you talked about EV adoption being uneven, maybe let's go into a bit more depth about how that differs around the world.

00:04:02: Look I understand if you step back and look at the whole globe.

00:04:06: in twenty-twenty five EV sales were up about twenty percent on twenty twenty four.

00:04:12: so a bit of growth impressive growth not staggering growth.

00:04:17: but If You Look Underneath That what is really happening?

00:04:20: Absolutely.

00:04:21: So Europe, we're up by about third.

00:04:22: so around four million or so vehicles APAC up quite a bit as well around fifteen million vehicles in total.

00:04:28: China is a massive part of that.

00:04:30: fifteen million around eighty five ninety percent of it also America's however has been flat.

00:04:34: they still are at around two million vehicles year over year.

00:04:37: effectively no change and the Middle East starting from small base but growing.

00:04:42: You've got twenty per cent overall growth.

00:04:44: That really driven by Europe & China Europe going faster than twenty percent the rest of Asia going in line and then America is basically dragging us behind.

00:04:54: Exactly,

00:04:55: so steady progress but I wouldn't say remarkable progress.

00:04:59: if he uptakes growing looks stronger than it does on others probably driven by a range different things right?

00:05:05: So some cases driven policy or just growing consumer preference.

00:05:12: we've seen especially this year from rising fuel prices as a result of the conflict in the Middle East.

00:05:22: Driven by EVs becoming more accessible, much wider range of EV is available now than say three or four years ago.

00:05:29: so quite a lot changing but still there's still a sign that demand isn't quiet where it might be.

00:05:36: Now from the consumer side obviously we do our EV charging index survey every year and always the data comes back saying once you've got an EV you've got a very low chance of going back.

00:05:48: People love the UVs, they love driving and they find them more cost efficient to run.

00:05:53: so what is it?

00:05:55: do we think that's dragging the heels of EV adoption?

00:06:00: So like with a European hat on sometimes I'm kind of scratching my head as to why this is the case.

00:06:08: We can go through often headline reasons Why people don't take EVs.

00:06:17: And in my head, right?

00:06:18: We can kind of gradually, gradually take them off.

00:06:21: So three or four years ago it was a hundred and fifty mile range isn't enough for me.

00:06:27: that's been solved.

00:06:28: now we've got two hundred and fifteen mile range.

00:06:30: Isn't Enough For Me?

00:06:32: I probably would say we're In The Process Of Solving That We Had.

00:06:35: There Is Not Enough.

00:06:36: Public Charging Infrastructure.

00:06:38: i'm not saying It's Been Solved But In Large Chunks Of At Least Europe And Big Parts Of Asia where lots of people live and drive, I would stick my neck out and say that's been at least partly solved.

00:06:56: Another reason there aren't many EV models and some of them look weird right?

00:07:01: Honestly i think we're way past that now.

00:07:06: the kind of argument that people used to make on battery life.

00:07:11: well if i charge my battery then you know...I think Charging takes too long, right?

00:07:19: There's another reason.

00:07:20: people say well I don't want an EV and again charging still probably does take a bit to long.

00:07:26: We're both the EV drivers And we know that we don't always wanna wait twenty-five minutes for a charge.

00:07:31: But again you seeing some of the technology developments coming out Seeing charging time slashed.

00:07:38: So The sort of outstanding reasons for me remain Right.

00:07:42: purchase costs are a bit too high Probably still like we see it still saying would still need to see a wider range of cheaper lower end and mid-range EVs come to market, I think for much wider adoption.

00:07:58: And the kind of...I think we're still in a place where people aren't comfortable about the residual value or the resale value of certainly battery electric vehicle which probably again just stops.

00:08:13: And then there's still issues to solve around public charging, right?

00:08:19: Public charging is more expensive than home-charging.

00:08:22: It's therefore unfair on those who don't have a driveway or garage if they've got an EV and can't charge it at home whereas everyone else can.

00:08:32: So I think that are some very real cost related reasons why people just don't jump into an EV But feels like the list of reason not get an EV is shrinking by the year.

00:08:49: I'm sure we can add to this at some point, you know?

00:08:51: I love the roar of the engine and smell of petrol that once we can solve... And i think the sector's working pretty hard to solve those cost issues and kind value question.. ...I really cant see that.

00:09:04: many reasons from a European perspective not to get an EV!

00:09:09: I totally understand if your in US and drive two hundred miles per day in the Midwest, and you tow heavy loads all of time.

00:09:17: And I understand that an EV might not be for you today but i don't think it's a majority of people certainly not in Europe.

00:09:30: You're probably right with that!

00:09:31: A lot what you said chimed.

00:09:33: The roar was something five years ago.

00:09:35: I couldn't imagine having an E-V.

00:09:41: But what you said there on consumer sentiment and the things that sort of sit beneath it around cost, how favorable other policies coming through from governments.

00:09:49: What are the OEMs in each local market doing?

00:09:51: Are all still things at play or they really does show up in numbers?

00:09:54: so if we look for example in Norway... If you look at China, ninety percent fifty percent of new sales are electric In other parts of Europe.

00:10:03: where is a positive sentiment.

00:10:05: We're three-in-five.

00:10:07: However You can Look At Other Countries Where It Really Isn't The Case

00:10:10: That three in five, that's countries like the Netherlands and Sweden.

00:10:14: And those figures you just talked about... ...that is a share of new sales that are battery electric right?

00:10:19: So this not including hybrids but impressive numbers.

00:10:22: Exactly!

00:10:23: Impressive numbers will come on to plug-in hybrides I think because there's an interesting story to tell there.

00:10:28: But yes indeed it is that For other countries for example Portugal Vietnam others were at one in three On that same metric so really making progress.

00:10:38: But then, as we've been talking about regionally when you start to look at other parts of the world it looks very different.

00:10:43: North America I think were down that sort-of ten percent or so exactly.

00:10:48: So its a bit tricky and some of those reasons you describe right being in the Midwest Or wherever you might be out there.

00:10:55: Sentiment from government.

00:10:56: what people are saying day today It's not necessarily framing things towards a move to EV, but also there is the element of what are OEMs pushing as well.

00:11:04: So for example you can see a difference there even between Japan and South Korea in what's being pushed in each local market.

00:11:08: Yeah.

00:11:09: Japan's very low right?

00:11:10: Very-very low EV penetrates.

00:11:12: Yes!

00:11:12: I think sub three five percent

00:11:14: Right okay But...but In Korea it's in the teens or in the twenties maybe?

00:11:18: I think mid-twenties Exactly

00:11:20: Interesting.

00:11:22: We talked about twenty-twenty five, there being about twenty million EVs new EV's sold globally.

00:11:28: And we've also talked about within EVs.

00:11:30: talk about battery electric vehicles.

00:11:33: My understanding is that in twenty twenty five and indeed over the last few years The ratio has been about the same.

00:11:38: About two in three of those EVS Has been a battery electric vehicle with the other one Being plug in hybrid.

00:11:46: Is that correct?

00:11:47: What going on under those numbers?

00:11:49: That exactly correct!

00:11:52: to start to decline a little bit,

00:11:53: especially the plug-in

00:11:56: hybrid share.

00:11:56: Especially with sort of LFP batteries and so on...

00:11:59: Because because the LFP is basically making battery electric vehicles better to drive longer range cheaper?

00:12:06: Exactly

00:12:06: all the stuff that consumers say they want.

00:12:08: you get them.

00:12:10: but there's a few specific things going on.

00:12:12: You've got local OEMs within for example North America in Europe But it still pushing about technology quite a bit.

00:12:17: And let's not underestimate the role of Chinese OEMs here.

00:12:20: So for example, they're pushing a lot of plug-in hybrid sales into European market.

00:12:25: I think have all European plug in hybrids sales and twenty twenty five around twenty percent or so were from Chinese Oems.

00:12:31: And notably their Chinese OEMs were exempt from EU tariffs as well which probably also played a bit of a roll as well.

00:12:38: So what is going on?

00:12:40: It's clear that battery electric vehicles at least aren't for everyone but most battery electric vehicle drivers would never go back.

00:12:49: You've got some OEM saying that, well EV demand just isn't there yet but then you've got EV drivers saying they love driving EVs and you've an increasingly wide and better range of EV's available on the market.

00:13:08: Meanwhile we're seeing a kind of apparent I mean it is small fluctuation in data but an apparent resurgence plug-in hybrid EV for a variety of reasons.

00:13:22: What could be going on?

00:13:24: I think one thing to think about is the OEM perspective that you already mentioned.

00:13:30: Stefan, You track the automotive industry very closely.

00:13:34: what do you think is the role some European automotive OEMs in all this?

00:13:43: Yes it's an interesting question about currently happening in Europe and the automotive landscape.

00:13:49: I think within the next few years, that will be very interesting.

00:13:54: Because till now you had electric vehicles especially for a premium segment.

00:14:01: with EU OEMs coming so high battery capacity also high price of vehicles more going towards luxury and what's happening in the market is many OEM are entering the better vehicle market at much lower prices twenty five thousand euro or even going towards twenty-thousand euro.

00:14:22: So new customers will

00:14:23: be

00:14:24: joining this kind of experience with electric vehicles, very nice vehicle in terms of materials and driving pleasure also affordable in the area range.

00:14:36: so we talk about range about two hundred fifty to three hundred fifty kilometer charging speed is well equipped.

00:14:42: That's why we believe that also a boost of battery electric vehicles will hit the market driven by EU OEMs on one hand side, which are conquering competition coming from Chinese OEM who need to export towards European markets due to tough market conditions they have in their home.

00:15:05: So from a customer point of view, that's perfect conditions because for sure you will get high-value cars at very affordable price.

00:15:14: Will that push also the need to charge solutions and charging infrastructure?

00:15:19: Yes!

00:15:19: For sure.

00:15:21: And we believe those OEMs who master also

00:15:25: the

00:15:25: charging experience in terms of an ecosystem benefit most Having a nice car and also nicely price card towards customers.

00:15:37: It's also much more questioned about how does the customer have his interface toward that charging ecosystem?

00:15:44: How was he connected, which kind of services can you have on what kind of price?

00:15:48: they are all charging experiences.

00:15:50: it naturally U-based OEMs should be there in a competitive situation, even the competitive advantage situation due to the fact that they have already their kind of collaborations and networks within their partners' infrastructure area.

00:16:07: While their competition from China needs to speed up it need enter into this place as well.

00:16:12: Nevertheless... The race is open!

00:16:17: Market conditions are tough and market share will be one of the core elements.

00:16:22: So it would be very interesting to see how this race is further going, while hard-to-predict what I believe Europe has there a very good shape with its industry base for its own markets?

00:16:34: Well i think Stefan's points here really show that there's a race going on right now and the next few years are probably gonna be very important to define who wins out in the mid to long term.

00:16:45: So we've touched already on the public charging network.

00:16:48: We know this is a really important part of EV adoption, I think as of the end of twenty-five something like seventy seven fifty five million EVs on the road globally and i think around fifty million of those are battery electric.

00:17:07: so let's think about The Network that has got to serve those EVs.

00:17:12: see where they build out stands where we're up to, what's been driving it and what the headlines are in terms of that charger roller.

00:17:21: And then what is going on beneath the first layer?

00:17:26: Look five years worth.

00:17:29: our EV charging index surveys kind tell us one or two very simple things regarding a public charging network.

00:17:36: EV users want more chargers.

00:17:40: pretty simple.

00:17:41: Obviously, that's nice to ask for but basically what people want and I think all in all right.

00:17:47: Chargepoint operators charge point installers have been responding.

00:17:52: there is a sort of interesting data point that came up from twenty-twenty five which was at the headline level.

00:18:00: globally.

00:18:01: they were only still lots but only one point one million public charge points installed.

00:18:07: I say only, but the point is in twenty-twenty four and i think that year before there were one point three million public charge points installed globally right.

00:18:16: So on the surface despite EV adoption accelerating we've had an apparent slowdown in Public Charging Infrastructure rollout.

00:18:25: so let's dig into a bit maybe how that differs by region?

00:18:30: And what's actually going on?

00:18:32: Absolutely!

00:18:33: There are probably two things out of this region and power level.

00:18:35: But may be lets start with regions the mature markets that we've been talking about already, China for example.

00:18:42: The actual number of charge points there has gone down relative to the year before in terms of new installations coming into market.

00:18:49: other parts say if look at Southeast Asia and parts Europe where EV adoption is accelerating public charges are also accelerating as well in terms a number deployments then US were will know it's very well documented but they're not enough.

00:19:07: There's not in still enough charges going.

00:19:08: In there has been a small increase even though the number of EV sales did drop.

00:19:13: Yeah,

00:19:14: so it was a mixed story at play.

00:19:16: What?

00:19:17: So kind of US is filling-in gap and what some massive country.

00:19:22: And they're are still gaps on the public charging network.

00:19:24: But then in places like China and Western Europe where The markets are fractionally more mature than some of the neighboring countries just feeling like there's a maturing going on and there is slowdown, ChargePoint operators are optimising rollout for utilisation.

00:19:42: Just kind of being more balanced?

00:19:44: Correct!

00:19:44: There's the maturing element in terms of demand side in EV adoption also let us say a bit more sophistication or less of a land grab from CPUs as well.

00:19:53: Okay that makes sense.

00:19:54: And then you mentioned power level.

00:19:56: right because thats very important factor cause.

00:19:59: number of charge points is an extremely simplistic headline number And I think if you factor in power levels, it tells a bit of the different stories.

00:20:08: So what's going on there?

00:20:10: For example, If you look at China we're almost at fifty percent Of all public charges deployed being above twenty two kilowatts.

00:20:18: Half the charge points are fast charges

00:20:22: Correct and in Southeast Asia is actually even higher than that In Europe.

00:20:27: over twenty percent as a whole are above twenty two kilowatts and that does vary little bit by country.

00:20:33: Yeah, I think in the UK we're at something like twenty five percent one-in-four or so public charge points which are fast right?

00:20:42: Which is greater than twenty two kilo watts

00:20:44: Correct!

00:20:44: And you see that some other countries across Europe however one notable outlier is Netherlands where it's actually only at five per cent That primarily driven by this sort of government rollout which was focused on AC charging.

00:20:56: if we get loads of AC sockets This is our way to get EV adoption up.

00:21:00: And that's generally worked well for them, but obviously means from a charge point perspective the power dynamics are very different.

00:21:06: I know they've also got an incredibly constrained electricity grid there.

00:21:10: so sticking in big installations of half a megawatt of fast charges probably easier said than done in some cases?

00:21:19: Exactly right!

00:21:21: So i guess it might seem counter-intuitive to see slow down public charge points roll out while the EV park is essentially accelerating.

00:21:31: But if you step back, I think it paints a picture of a maturing sector.

00:21:38: There's a couple things here right?

00:21:40: The fact that in early days meaning not long ago three or four years ago maybe ten years ago in some countries governments charge point operators rolled out charging networks ahead As you mentioned with Netherlands, right?

00:21:58: They had to do it.

00:21:59: Otherwise EV drivers wouldn't be able to charge.

00:22:01: so I think we've seen in some countries that sort of phase of rolling out well ahead.

00:22:07: demand has come to an end and say You just got a natural capping Of the rollout.

00:22:12: And then there's more nuanced point around charging speeds.

00:22:15: It's not Just about how many plugs How Many Sockets charging solution for the use case that the user actually wants to use.

00:22:27: As we discussed, if you stick in a higher power charger it can probably serve the same demand as five or ten or fifteen lower-power chargers.

00:22:38: so this shift towards faster charging means that you just necessarily don't need as many chargers or plugs.

00:22:47: Exactly right, and what you see there?

00:22:48: if we look at Europe.

00:22:49: You can see this trend taking place already.

00:22:51: so of the fast charges that We have in Europe fifty percent of those are now ultra fast So enabling people to get their charge on top up within fifteen twenty-twenty five minutes then Get back on them move again.

00:23:01: So all the public charge points in Europe that's a fast Fifty percent an ultra fast.

00:23:07: That wasn't the case couple years ago Right?

00:23:09: It was twenty five percent a few Years ago, so we've seen real step change there.

00:23:13: okay, so that ultra fast segment right is is far and away the fastest growing segment of public charging infrastructure.

00:23:21: Okay that's interesting to know, it kind of backs up the points we've been making.

00:23:26: I think its also reflected maybe in what EV users think about Public Charging.

00:23:32: so obviously in our EV Charging Index over the last five or six years We have surveyed EV users And you remember in the latest data find public charging increasingly convenient and I think something like three quarters, four-fifths of EV users now think that public charging is pretty convenient.

00:23:55: So i think that probably reflects some the data you've just mentioned.

00:23:59: It does!

00:24:00: And there's been a lot of emphasis on let's put in more than faster charges or not necessarily more but lets really go for faster chargers.

00:24:07: That right?

00:24:07: Thats important.

00:24:08: But I do still think theres are all other charging speeds so fast rather than ultra-fast or even some slow charges to play a role as well for a couple of different reasons.

00:24:18: The dwell time, first say how long somebody stops for looks quite different if you're stopping on the motorway versus stopping to go into your shopping.

00:24:25: there's also grid constraints...

00:24:27: Or have you parked inside your house and haven't got a driveway right?

00:24:30: Exactly!

00:24:31: You can be there for twelve twenty four hours.

00:24:32: you don't need an ultra-first charger

00:24:34: exactly And so Ultra Fast will remain a key part.

00:24:38: But there is also definitely a role for the other charging speeds to play, but it really has to be fit-for purpose.

00:24:43: To the site characteristics and types of people that are going to use those charges

00:24:47: And slowcharging I assume costs much lower.

00:24:50: capex can therefore be in the right context more cost effective.

00:24:53: Correct All this hardware all these charge points have to plug into something.

00:24:59: Often an electricity grid was not designed with this in mind.

00:25:04: Aaron This where some your work comes.

00:25:11: Thank you, Adam.

00:25:12: This is really true.

00:25:13: across most developed nations the grid infrastructure was built in the early to mid-twentieth century So obviously electric field charging was not in mind when they built the grid.

00:25:23: The energy industry is facing a massive transformation from this shift from fuel To electric for transportation and then need to build up the infrastructure.

00:25:32: just support that With electrification alongside incremental data center loads.

00:25:38: utilities are faced with significantly increasing demand for both capacity and energy, for the first time in decades.

00:25:45: This is requiring utilities to build a lot of new infrastructure which is something they're already incentivized to do.

00:25:51: Some of the practical challenges that utilities have are ensuring on-time and cost effective connections For these large charging stations.

00:26:00: Of course there have been some delays when utilities haven't had them make major upgrades.

00:26:06: Stations have had to throttle customers when the capacity is not high enough, and too many vehicles are plugged in.

00:26:12: With increasing demand for ultra-fast chargers this also increases this challenge.

00:26:18: Developers do work with utilities to understand where they can connect with a headroom so that they could do it faster or cheaper.

00:26:26: There's some behind meter solutions such as battery storage but those can be quite costly.

00:26:33: Utilities really need to understand where, and more importantly when this logo will show up.

00:26:39: Most of them have programs to incentivize customers to shift these new load-to offpeak hours.

00:26:47: This adding load to peak times is incredibly expensive while adding load non-peak time actually drives down cost in the long run.

00:26:56: So proper communication and incentives, this drives down the overall cost to market participants.

00:27:03: And utilities in others have been testing customers' ability and willingness to modify their behavior.

00:27:10: Today mostly we shift the load by changing times that people charge but with more cost-effective bidirectional chargers, and the future car batteries can be used to manage the load on the grid.

00:27:23: At scale this could be a super efficient way to balance supply and demand.

00:27:27: This becomes a lot more important as that's supplied become more intermittent.

00:27:32: The market is responding.

00:27:33: businesses are creating models to aggregate these types of resources into what called virtual power plant.

00:27:40: This can also respond to market signals and pull energy back onto the grid from these vehicles, Also known as vehicle-to-grid or VitaG.

00:27:48: ED charging has resulted in some short term headaches for electric utilities As they try to respond to new customer needs But longterm it's an opportunity for investment growth And managed properly It can help with a customer affordability.

00:28:04: So the constraints of building and maintaining charging infrastructure are not just physical They're financial too.

00:28:11: So there's a range of constraints.

00:28:13: Some physical, some financial and more.

00:28:17: on the financial note let's bring in Martin who looks at this from the investor side.

00:28:26: Thanks Adam.

00:28:27: Yes Aaron raised actually very valid and crucial point.

00:28:31: The financial framework is a central element And from an investor perspective the landscape of charging infrastructure has changed significantly over the last eighteen to twenty four months.

00:28:41: We actually left a phase that was defined as growth at all means for time particular in twenty-one, twenty two or twenty three where lot of equity financing is available and the rollout public DC charging points has outgrowing number of battery electric vehicles.

00:28:59: This was driven what we call Lent Grabbing Strategy when investors really focused on rapid network expansion.

00:29:10: This dynamic actually has changed in the market.

00:29:12: The key message we're hearing is that priority moving away from pure growth to performance and a clear path of platforms show profitability, this sign of maturing sector.

00:29:26: There are several factors driving evolution.

00:29:29: Firstly there's broader environment scheme All green asset classes under pressure And we're seeing that higher cost of capital, as well as volatile energy prices put pressure on the performances.

00:29:43: This is what investors want to better understand and want to understand their attached risk with each platform.

00:29:50: Secondly a more practical reevaluation of this sector As market is maturing.

00:29:56: We are replacing optimistic forecasts with data-driven assessments, right?

00:30:03: So we really want to understand side by side where are utilizations going and what is the predictability of where we can grow the platform organically.

00:30:14: And thirdly which see a change in investor landscape.

00:30:18: The land grabbing strategy as I just described is reassessed.

00:30:22: some investors are exiting.

00:30:24: the sector somehow wants double click but highly specialized on use cases And with that also specializing on certain stature types, right?

00:30:33: Because that is also reflected in the demand profiles where EV drivers are now behaving towards.

00:30:40: We see actually early science and that really gets me positive for the market That interest in this sector's coming back.

00:30:47: This has always been an early stage and it moving toward a more investor friendly perspective of next one to two years.

00:30:59: But what we really see is, the investors become more mature.

00:31:04: They want to understand that there's a tax risk and they wanna understand the predictable performance of profiles.

00:31:10: So spaces like depot charging, contracted setups as well as international platforms are this other schemes investors are reevaluating.

00:31:21: so What does this focus on performance actually means in practice?

00:31:26: Investors, both on the equity as well in a depth side are no longer just looking at overall portfolio and pipeline.

00:31:34: Their analysis really focussed on the unit economics of every single site to better understand what is key question they're asking?

00:31:43: How stable it's gross margins And most importantly where are utilization rates for each individual sites?

00:31:51: right how can we learn from them?

00:31:56: And we talk about utilization.

00:31:58: What do you mean here?

00:31:59: It's really kilowatt hours per charge point, and this needs to reflect what is the underlying profile for how can I drive a portfolio going forward?

00:32:13: or what are also my archetype strategies so that I want to roll out to be CAPEX efficient?

00:32:20: This goes back through the operational performance points.

00:32:22: as mentioned earlier.

00:32:24: What are inefficiencies along?

00:32:26: the entire value chain needs to be assessed?

00:32:29: We look at rental agreements.

00:32:31: Do we need to verticalize, do we have an EMSP?

00:32:35: where do you go with energy management?

00:32:38: and as I mentioned what is the charge rollout archetype?

00:32:44: so what does that mean for purpose in future?

00:32:48: or slowly increase number of charges?

00:32:53: And this really comes down to my cash flow availability, the investments from infrastructure as well as from strategic but also overall raw strategies of entire platform.

00:33:09: This has a direct impact on transaction market where many operators relied in debt financing and recent years M&A activities have been less attractive.

00:33:19: As financing conditions are now becoming more and more difficult, we may see transactions happening again.

00:33:24: And that's actually specifically what we're seeing in central Europe.

00:33:28: A lot of transactions in Germany as well as France or the UK have already happened Or coming to market.

00:33:37: However there is often a massive gap between valuations because you still have platforms that are, have predictions where the platform can go.

00:33:47: The narrative is around a pipeline and development and upticks of utilizations on one hand but in other hands new investors are really rationalizing.

00:33:56: Where Can I Take the Platform?

00:33:58: And they're relying on strict operational KPIs and often put the pipeline inside what we want to also better understand.

00:34:09: can I develop a pure place strategy?

00:34:11: So the diversification of various types, what we saw historically?

00:34:16: that you have an mix of on-road as well as destination charging.

00:34:19: This is something where either has been defined in transaction scopes already separately but more importantly when the transaction happens

00:34:34: Stepping back a little bit, it's worth considering some of the change being driven out of China and how that is impacting electrification all over the world.

00:34:44: Jack, over

00:34:50: to you!

00:35:05: They're scaling fast across the globe, in Europe and South-East Asia.

00:35:12: And in Latin America!

00:35:14: And they aren't just selling cars...they are shaping whole ecosystem.

00:35:18: Why?

00:35:19: Because tech is a game changer.

00:35:21: We'll talk about things like BID's ultra safe flatback tree & their flash charging technology.

00:35:27: It makes EVs actually enjoyable to own & its satisfaction through the roof.

00:35:34: Now To support these cars We have seen the rise of what I call the cooperative infrastructure.

00:35:41: Instead of building from scratch, local players are partnered with Chinese OEMs or their affiliates like Neopower and CATL.

00:35:50: These guys bring capital & technical know-how for high power charging.

00:35:55: Basically they're taking business models that already proven back in China And hitting copy paste on global scale.

00:36:04: Then there's the battery swapping narrative.

00:36:06: Chinese OEMs are slowly pushing these overseas.

00:36:10: It's a totally different approach to West Plucking Obsection, it focuses on standardization and managing the grid road.

00:36:19: but here is a big but adoption has been pretty limited so far.

00:36:24: outside of specific use cases like taxis or fleets their outlook is still uncertain.

00:36:31: finally And Here Is The Kicker is forcing local component suppliers to pivot.

00:36:39: To stay compatible, many are now integrating Chinese hardware and software protocols into their own networks.

00:36:46: That shift?

00:36:47: It's changing.

00:36:48: who holds the technological power cars!

00:36:51: So it's not just about the cars... ...it's also about tech, plugs & protocols.

00:36:58: Thanks!

00:37:01: in the next few years is certainly worth watching closely, but it's not the only thing that's happening.

00:37:07: Maybe let's just quickly rattle through some of the other things that are changing... ...in the next five-ten years.

00:37:12: we think a really important one charge point operator consolidation two vehicle to X, right?

00:37:20: Vehicle to grid, vehicle home, vehicle load number three energy management and then forth on their horizon.

00:37:26: But closer than we think is truck charging, truck electrification.

00:37:30: So in Charge Point Operator Consolidation, it's definitely something that we're already beginning to see on the market.

00:37:35: There are a lot of CPOs currently playing quite an important role and getting charges rolled out which helps with obviously EV adoption but... We really think within the next few years or five-ten there is going to be a wave of consolidation.

00:37:50: I think theres probably two types of consolidation that will say some in country consolidations to help people densify their networks but also potentially some cross-border consolidation as well.

00:38:00: Vehicle to X, so vehicle home, vehicle to grid, vehicle load undoubtedly going be an important tool in the box to lower the net cost of electricity from private users to fleet users and heavy vehicles to light vehicles by using the EV battery as a flexible mobile storage unit enabling us to utilize things like peak shaving.

00:38:27: While there are plenty of pilots and emerging products or models around this, I really think in the next five years we're going to start seeing more widespread adoption as OEMs, Chargement Operators adopt more and has more standards for

00:38:44: them.

00:38:45: More broadly on energy management it's been a big topic over last few years.

00:38:49: people have been talking about it.

00:38:50: There've been lots of pilots at play But we're now starting to see some actual sort of real deployments.

00:38:56: One example is on-site power generation and this is helpful for a few different reasons, one where you've got grid constraints which we have been talking about earlier.

00:39:04: second that helps charge point operators manage and optimise costs And also it's therefore quite important for the consumers as well because they will make sure pricing fits their purpose and manageable.

00:39:15: To scale truck charging needs to offer truck drivers and fleets, the trinity of abundance affordability and capability.

00:39:24: It also needs investors with long time horizons and it needs fleets to be prepared to take the risk switch to electric.

00:39:31: So all these elements that we've been talking about is not really about EV growth but what happens as the store base grows going forward which I think leads us into our final question across the e-mobility ecosystem over next ten years do you expect see more evolution or revolution?

00:39:47: In a few words, I think it makes an evolution in revolution.

00:39:49: We'll see OEMs and ChargePoint operators continuing to respond to emerging customer needs learning from what works on what doesn't work... ...in terms of user experience optimising utilization and their networks.

00:40:04: And so one at the same time we'll see some more drastic changes for example in innovation of pricing on public charging networks For example ultra, ultra fast charging.

00:40:15: Right?

00:40:15: You see what's coming out of BYD in China with the flash charging which basically means you can put in a charger capable of delivering one megawatt to a car and one megawatts means if the cars are capable it means that they charge their car in I think say nine minutes.

00:40:31: right certainly less than ten minutes Which is going be more revolutionary point then.

00:40:37: evolutionary point but overall mix of evolution, learning from the past and some sort of more bulge on the blue in terms of revolution.

00:40:47: What do you think Aaron?

00:40:49: I really agree!

00:40:50: The devil however will always be in detail so a lot all depend where drive what you drive why you drive...I'm pretty excited to watch that play out over next five ten years.

00:41:00: Me too sounds good.

00:41:02: If today's conversation raised questions You'd like go deeper on.

00:41:06: Our latest research on battery manufacturing is available at rollinburger.com.

00:41:11: In the next episode, we'll go deep on another technology reshaping how industries operate.

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