Energy Transition in 2022

Is EV Charging Counted as Infrastructure?

As European countries commit to phasing out diesel and petrol vehicles, EV charging networks will become the new necessary infrastructure.

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By Ralph Ibendahl and Erika Singer
Published May 16, 2022 | 3 min watch
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Key Points

  • EV charging businesses are diverse, often loss-making and exposed to utilisation risk, so they’re attracting different kinds of investors.
  • Funding has a very similar profile to the rollout of fiber across Europe, which started with project financing before moving to corporate funding.
  • Despite these challenges, growth equity funds and infrastructure investors have started entering the space.
  • Government support is significantly ramping up EV penetration, which will ultimately underpin the large investments required for charging infrastructure.

Electric vehicles (EV) are still a relatively new technology, but with governments striving to inhibit sales of new fossil-fuel vehicles, they are swiftly increasing their penetration. Nevertheless, the charging infrastructure to support this growth has historically lagged. There are different business models for charging, from domestic set-ups to forecourt initiatives, and the economic profiles of these companies vary, so they don’t resemble traditional infrastructure investments right now.

However, they do resemble digital infrastructure in its early innings. When fiber was rolling out across Europe, the businesses involved had no EPITDA and their owners were using capital expenditure to build up their networks. Only when revenues started to be generated could the firms move to more corporate-style financing, as opposed to project funding.

“I see those funders that were able to support fiber being able to do so for EV charging businesses in the near term.”



But the speed of that process will be greatly enhanced by government support. In Norway, for example, the last internal combustion engine will probably be sold before the end of 2022, and other geographies will follow with government commitments to phase out fossil fuel vehicles. At the same time, the cost of batteries is falling, bringing the overall cost of EVs down. As EV penetration ramps up, this will spur the significant investments required to make EV charging part of our everyday infrastructure.

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