How much public charging infrastructure does Germany actually need in 2030?

In the first two articles in this series, we explained the expected cost degression in the production of electric cars; we then modeled a ramp-up curve for electric vehicles in Germany and the EU up to 2035 based on facts and key assumptions. Today we use that knowledge to derive a likely scenario for public charging infrastructure in Germany.

To obtain a realistic estimate of the total demand for charging power and the respective infrastructure for electric vehicles, we need, on the one hand, the number of BEVs on the roads over time; we determined the ramp-up curve for this in part 2 of the series.

On the other hand, an estimate of the actual electricity consumption per vehicle is necessary. Therefore, we calculated the average real consumption of 89 currently available BEV models. The basis for this is the manufacturers' WLTP consumption data combined with reality tests published by the ADAC in April 2024. The study revealed that the actual consumption is on average 18% higher than the officially published WLTP figures – mainly due to driving style, and additional power consumers such as heating, air conditioning, battery management, and other electric systems in the vehicle. [1] This results in an average consumption of 20.6 kWh/100km across all electric vehicle models. We estimate that advances in drive efficiency are compensating the trend to stronger powered drives, so that this average will more or less persist within our time horizon. Based on an average annual mileage of 12,670 km [2], this results in an energy requirement of 2,610 kW per vehicle per year. If you take into account charging losses, which in the ADAC tests amounted to an average of 15% per full charge, the average gross power demand results in 3,000 kWh per vehicle per year. According to our ramp-up curve, the BEV stock in Germany end of 2030 is 9.7 million vehicles, resulting in a power requirement of 29.1 TWh for the annual period [Fig. 1]. To put that into perspective, that amount of electricity corresponds to just 5.5% of the German gross electricity consumption of 525 TWh in 2023, of which 53% was produced by renewable energies. So it is fairly exaggerated to argue that electromobility is overburdening our electricity generation capability.

A much greater challenge than generating the required energy is its distribution, i.e. how the charging energy is available at the right time and in the right place. This will put a lot of strain on our transport and distribution grids, and its extension is crucial to the success of electromobility and to the energy transition in general. In other words: The electricity network operators are significantly more challenged than the electricity producers.

Now that we have derived the required amount of charging power, let’s come back to the initial question: How does that translate into a demand for charging infrastructure?

Let’s first discern the segments of the charging infrastructure into privately and publicly accessible segments to get a flavor of the dynamics between charging use cases. We subsume under private charging infrastructure various forms of private ownership, with the large majority being:

1. Wallboxes owned by residents of one- or two-family homes

2. Wallbox groups in parking lots or underground garages of apartment buildings owned by property owners, landlords, or homeowners' communities

3. Charging infrastructure in companies to serve the charging needs of employee vehicles, company vehicles, and service fleets.

Publicly accessible charging infrastructure is set up and operated by Charge Point Operators (further on referred to as CPOs). We will talk about CPOs, their strategies and market shares in depth in the upcoming article of this series.

The most important locations for public charging infrastructure are:

1. On motorways and expressways

2. In inner-city areas in managed parking areas

3. At private-owned, but publicly accessible parking areas of commercial outlets and service companies, parking garage operators, etc.

The use cases vary depending on the location, but consistently, the customer's need for charging speed is the essential differentiator. While the speed at home or at the company location, where charging can be done overnight or during a working day, is of little importance, the duration of the charging session on the motorway or during a 30-minute shopping trip plays a vital role. Accordingly, the customer's willingness to pay at public charge points is higher than for charging at home (especially since there, it is often fed from local PV systems). Public charging stations can also command higher prices for their charging services the faster a user wants or needs to charge. Therefore, fees for “fast charging”, synonymous with DC charging at capacities of 50 to 400 kW, are consistently higher than for “normal charging”, which you usually encounter at AC charge points between 3.6 and 22 kW power.

A price premium compared to on-premise power is also justified by the CPOs, who, in contrast to household electricity, have to incur additional, high capital costs for setting up the charging infrastructure and connecting to the grid, which often not only needs expensive trenched cabling, but also additional transformers.

CPOs usually differentiate price models in two dimensions: normal versus fast charging, and ad hoc tariffs without customer lock-in, versus tariffs with monthly fees.

We examined the pricing of 23 tariffs with and without monthly fees of the 14 largest CPOs applicable to their own infrastructure (resellers without own infrastructure are not considered) in Germany and compared them with household electricity prices to obtain a benchmark for the price premium. As of April 2024, the average price is 0,48 €/kWh for AC charging and 0,58 €/kWh for DC charging. This is equivalent to a price premium of +56% and +90%, respectively, compared to the current household electricity price of 31ct/kWh [3].

The big question now is what proportion of the charging can be done inexpensively on private infrastructure, versus the share that is using public infrastructure. It can be assumed that the players in the area of e-mobility - i.e. private homeowners, companies with fleets, etc. - will primarily expand their private infrastructure wherever it makes sense and possible to exploit the price advantage. Conversely, actors who cannot access such infrastructure - renters in urban areas, small businesses without parking space, etc. - will tend to own or use electric cars later, increasing the need for public charging infrastructure as the market matures. The share of public charging versus private charging will therefore likely increase significantly over time. Existing studies by consulting companies and mobility associations project the proportion in the year 2030 at 36% (ChargeUp 2021) to 60% (ACEA, 2022) in 2030. For further consideration, we are focusing on a medium scenario that achieves a share of 50% of public charging power in 2030. It is important not to confound that metric with the number of charging sessions; the 50% assumption is realistic because there is a strong momentum among public charging stations toward fast charging infrastructure. According to latest available statistics [4], as of November 1, 2023, there were 93,261 AC charging points and 22,047 DC charging points in Germany - a ratio of approximately 4:1. However, the annual increase for DC charging points is 61%, while AC charging points “only” increased by 36% compared to the previous year. In terms of installed capacity, the DC charging network with around 2.6 TW is already well ahead of the AC charging points with around 1.5 TW.

According to our analysis of the Federal Network Agency's charging station register, the average charging capacity of all installed charge points is 32 kW overall; it is 104 kW for DC charging points and 16.5 kW for AC charging points. So, the ratio of DC to AC charging speed is 6.3:1 – that said, with the same utilization pattern, a fast charging point contributes more than six times the amount of energy. With 800V power architecture models going mainstream and battery technology that will enable much faster charging, the pull for DC infrastructure will certainly further strengthen.

Another driver for the increasing share of public charging will be increasing competition on price; for example, there will be price models with strong discounts for company fleets, so that the price difference compared to charging with company-owned infrastructure will erode overall.

Fast-charging infrastructure meets a key customer need: along with range anxiety, high charging time is one of the most frequently expressed obstacles to swift penetration of e-mobility. With the rapid expansion of DC infrastructure, the called-out target of the German government of one million public charging points in 2030 quickly becomes obsolete. The German “National Charging Infrastructure Steering Board” [5] has laid out six reference scenarios in 2020 that determine the need for public charging infrastructure in 2030 between 440,000 and 843,000 charging points. Based on current statistics, we can claim that we are on a clear trajectory for the ‘HPC scenario‘ with the lowest required number of 440,000 CPs ?[Fig. 2].

What is crucial for operators, however, is that the network has profitable utilization. The rollout, in its initial phase, is forcibly ahead of the demand, thus building up consumer’s trust in the local availability of charging facilities; the downside is, that it is resulting in low infrastructure utilization. But at a certain point, utilization has to catch up to allow investors to recoup their high capital cost so that CPOs can achieve solid profit margins in the long term. We estimate the current total utilization rates of the installed charge points at around 4% and starting to significantly improve only from 2028 onwards, approaching 10% in 2030 and leveling off beyond 15-20% overall in a more mature market phase which will be reached in or beyond 2034 [6]. Market-leading CPOs with HPC charging hubs in highly frequented locations are already aiming for utilization rates of 30% and more to amortize the investment in the expensive infrastructure. [7]

We have calculated some key metrics that are aligned with the current trajectory and the above-mentioned 440k scenario. The average charging capacity per CP will increase here from currently 32 kW to 50 kW in 2030. The average utilization will amount to 9.4%, which is still far from beneficial for most of the infrastructure (we have calculated a reasonable downtime of 15% for a broad number of reasons, e.g. IT problems, payment processing failures, hardware issues, planned maintenance downtimes, charge points blocked by other parking cars, etc). We assume that, the higher the installed power of a charge point, the higher its utilization, due to the incentive for the CPO to keep it available to customers and deliver a high ROI. At locations operated by municipal entities, we assume slightly higher downtimes and lower average utilization, since these are not as much incentivized for high-profit margins, but also have to take into account to serve a broader range of citizens’ interests.

The ratio between BEV and CP in 2030 will be 22:1 under these circumstances, rather than the 10:1 ratio observed end of 2021. If that sounds like crowded charging stations to you, rest assured that the total network utilization will still be below 10% at this point. Also, the National Charging Infrastructure Steering Board is calculating with such a ratio [8]. Yet, a better metric to determine the fit of the charging infrastructure is the ratio between installed charging capacity and the number of BEVs, as it implies the amount of energy that the infrastructure can deliver. On this metric, our model outputs a fair value of 2.1 kW in 2030, decreasing to 1.5 in 2035 [Fig. 3]. This would be totally in line with the minimum requirements mandated by the EU Alternative Fuels Infrastructure Regulation (AFIR), which prescribes a minimum ratio of 1.3 kW per BEV.

To summarize: although much needs to be done to build up an appropriate charging infrastructure in the years ahead, the overall trajectory makes us optimistic that the requirements of the demand side of E-Mobility will be met. On the flipside, the continuation of weak network utilization will lead at some point to a consolidation among the players in the CPO market. Not all players will recoup their investments in due time as expected by their CFOs, and most of them will rethink their strategies in the coming years. Let’s dive deeper into the strategies in the next part of our series!

Footnotes:

[1] ADAC Ecotest, April 11, 2024; calculated deviation corresponds to an unweighted average of differences between WLTP and test results of all 89 models. A load loss of 15% is the difference between net battery capacity and energy required per full charge. Source: https://www.adac.de/rund-ums-fahrzeug/elektromobilitaet/elektroauto/stromverbrauch-elektroautos-adac-test/

[2] DAT Report 2023, annual mileage of car owners in Germany, 2022

[3] Source: check24.de , April 2024; query result of cheapest provider for annual costs for a household for 5,000kWh, without bonuses, working price 28.6ct/kWh + basic price

[4] Source: Federal Network Agency (Bundesnetzagentur), https://www.bundesnetzagentur.de/SharedDocs/Press Releases/DE/2024/20240105_EEGZubau.html

[5] Source: Nationale Leitstelle Ladeinfrastruktur, ?Ladeinfrastruktur nach 2025/2030: Szenarien fuer den Markthochlauf“

[6] Source: Federal Network Agency (Bundesnetzagentur): Statistics on charging station infrastructure, November 1, 2023; own modeling

[7] Source: e.g. Fastned, Investor Presentation 04/2024, p. 15

[8] Source: Nationale Leitstelle Ladeinfrastruktur, ?Ladeinfrastruktur nach 2025/2030: Szenarien fuer den Markthochlauf“, p. 5