In President Biden’s vision of a green future, half of all new cars sold in 2030 will be electric. But something really basic is standing in the way of that plan: enough outlets to plug in all those cars and trucks.
The country has tens of thousands of public charging stations — the electric car equivalent of gas pumps — with about 110,000 chargers. But energy and auto experts say that number needs to be at least five to 10 times as big to achieve the president’s goal. Building that many will cost tens of billions of dollars, far more than the $7.5 billion that lawmakers have set aside in the infrastructure bill.
Private investors are pouring hundreds of millions of dollars into building chargers, but the business suffers from a chicken-and-egg problem: Sales of electric cars are not growing fast enough to make charging profitable. It could be years before most charging companies break even, let alone mint big profits like Exxon Mobil and Chevron.
Fast chargers — ones that can fill up an electric car battery in 20 to 40 minutes — cost tens of thousands of dollars but are typically used less than humdrum gas pumps. Yet the auto and energy industries need to build them to reassure people that they won’t be stranded in an electric car with no plug in sight.
“E.V. charging infrastructure is the single biggest barrier to E.V. adoption,” said Asad Hussain, a senior analyst at PitchBook, a research firm. “You talk to anyone who’s on the fence about buying an E.V. and the No. 1 concern that comes to mind is range anxiety.”
The European Union, which is further along in electrifying cars, had nearly 200,000 public charging points last year. China, where electric cars are even more common than in Europe, had more than 800,000 in 2020.
European and Chinese officials have offered better incentives and imposed tougher regulations in part because they want to win a global race to build the cars and trucks of the future. U.S. policies, including the infrastructure bill, have been more modest because most Republicans and some Democrats oppose the regulation and spending needed to quickly ditch fossil fuels.
Soon, even $7.5 billion won’t be enough to lay the groundwork for the electric age, Nick Nigro, founder of Atlas Public Policy, a consulting and research firm based in Washington, said about the proposed federal spending on charging stations. “Is it sufficient? No,” he said. “But it gets things going.”
Most drivers today plug in their electric cars at home, and only occasionally use public charging stations. But those stations will be crucial, especially to those who live in apartments and people who drive long distances.
For years, start-ups, automakers and other companies have been slowly building chargers, mainly in California and other coastal states where most electric cars are sold. These businesses use different strategies to make money, and auto experts say it is not clear which will succeed. The company with the most stations, ChargePoint, sells chargers to individuals, workplaces, stores, condo and apartment buildings, and businesses with fleets of electric vehicles. It collects subscription fees for software that manages the chargers. Tesla offers charging mainly to get people to buy its cars. And others make money by selling electricity to drivers.
The Transition to Electric Cars
- How Long Until Electric Rules? A new car sold today can last a decade or two before retiring. With more electric cars being sold, how long until they rule the road?
- G.M.’s Electric Car Goals: The car manufacturer plans to sell only zero-emission vehicles by 2035.
- What Can the Power Grid Handle? Four key things that need to happen before the U.S. power grid can handle a surge in electric vehicles.
- Benefits of Electric Cars: They benefit both the environment and your wallet.
- A Guide to Buying Electric: Shopping for an electric car can be exciting and bewildering. Consider what kind of car you want and need and where you will charge.
Once the poor cousin to the hip business of making sleek electric cars, the charging industry has been swept up in its own gold rush. Venture capital firms poured nearly $1 billion into charging companies last year, more than the five previous years combined, according to PitchBook. So far in 2021, venture capital investments are up to more than $550 million.
On Wall Street, publicly traded special purpose acquisition companies, or SPACs, have struck deals to buy eight charging companies out of 26 deals involving electric vehicle and related businesses, according to Dealogic, a research firm. The deals typically include an infusion of hundreds of millions of dollars from big investors like BlackRock.