EV charging infrastructure in Europe: A clear path for a competitive market


Electric mobility will play a key role in helping Europe’s transport sector recover from the current crisis. European and national recovery programmes, which are based on the European Commission’s Green New Deal, are already showing clear signs of this. Germany, for example, has decided to double its support for consumers purchasing electric vehicles (EVs). Early figures indicate that EVs are likely to sell even better after the crisis months, particularly if bolstered by green purchase incentives.

But the electric vehicle (EV) market won’t reach mass scale without accessible and smart charging infrastructure for all users. European policymakers, national governments and industry stakeholders need to develop a joint vision for a self‑sustaining and competitive market for EV charging services. In this vision, EV drivers across the EU would have ready access to a range of charging services to fit their needs, with competition driving the innovation needed to provide those services at attractive prices.

The good news is that decision-makers now have the chance make this vision a reality. The European Commission is currently preparing for revision of the Alternative Fuels Infrastructure Directive, which regulates public charging infrastructure, in 2021. Tasked with implementing the electricity market reforms from the Clean Energy for All Europeans package, governments can use this opportunity to integrate electric vehicles, and their charging processes, into their electricity grids. Our new study illustrates how the various stakeholders in the electric mobility world can work together to successfully align these opportunities and establish a clear path to a functioning European EV charging market.

Start with an essential charging network

To help develop robust European EV charging infrastructure, Member States should define an “essential charging network” for their country. Policymakers have found this planning designation, which was introduced in two U.S. states, useful for striking the right balance between guaranteeing minimum network coverage and creating a competitive market that will ultimately provide sufficient, convenient charging. To ensure all EV drivers have access, Member States can include hard-to-serve locations in less densely populated areas that are unlikely to be served by commercial providers. Stakeholders from the transport and energy sectors, as well as from a variety of other interest groups and civil society, should plan the network together to meet future charging demand while making the best use of the existing electricity grid to reduce costs.

The early phases of market development can be the most challenging. Well-defined public tendering procedures have emerged as a best practice for cities and regions to develop charging solutions aligned with their broader sustainable transport and energy policy frameworks. To allocate resources most effectively, authorities can also implement other tools, such as auctioning off the charging point locations to reveal their varying economic value.

Clarify ownership rules

In the early stages of developing EV charging, several Member States relied on grid operators, which are regulated entities in Europe, to build out the network. In Luxembourg, the country’s four grid operators own the charging network, while operation has been outsourced to a private company. The EU legislation under implementation, however, stipulates that private operators develop the market. As a result, regulated entities may only serve as a last-resort option when no other party is willing to invest. In this case, countries must also establish processes to closely monitor ownership and operation as well as guidelines for transitioning to commercial operation. Now national governments need to clarify the ownership and operation rules for EV charging services in line with recent electricity market reforms as they build a competitive market.

Make prices transparent and easy to compare

A well-designed market for vehicle charging can reduce costs not only for EV drivers, but also for all electricity consumers. It’s crucial, however, to implement prices that reflect actual costs. To achieve this, Member States can adjust the design of their network tariffs — the regulated tariffs that customers, including e‑mobility service providers, pay for using electricity networks.

In most countries, network fees are currently based on annual peak demand, or the highest cost for electricity delivery a customer would pay in a given year. This design is counterproductive, however, when trying to develop an EV charging market, as it negatively affects the economics of EV fast charging. Providers’ business is to deliver a large number of kilowatts in a short period of time. Until the market develops, they may only have a few customers — data from Germany and Poland suggests only 0.5 EVs per day. If network costs are based on peak demand, and not on the actual number of EVs charged, operators face high fixed costs of up to several thousand euros per year. This makes the business case for that location difficult, if not impossible. The resulting lack of fast charging stations, in turn, can make consumers concerned about the lack of charging options, thus forestalling the development of a functioning market. One solution, already tested in California, reduces network costs for the first several years of operation.

Finally, EV users currently face a confusing, opaque labyrinth of fees for charging services across Europe. To create certainty and facilitate EV uptake, we also need cost-reflective and transparent pricing for vehicle charging. Member States can improve on the current situation by basing prices at charging points primarily on the amount of electricity consumed, as Germany has already done. Not only is cost‑reflective pricing vital, it also needs to be communicated clearly, so consumers can understand it, compare services and make choices according to their needs.

A clear path to a zero-emission future

Europe is at a pivotal point on the path to transport electrification. Building a competitive market for EV charging will be paramount for advancing Europe’s EV market and securing the transport sector’s green recovery. The revision of the Alternative Fuels Infrastructure Directive provides a timely opportunity for guidance, as the legislation can and should stipulate that Member States develop an essential charging network to address the needs of all EV users. Following best practices, Europe can build an EV charging market that fosters a faster, smoother and more equitable transition to zero-emission transport. At the same time, it will advance the energy transition through smart grid integration of electric transport, with maximum benefits for consumers and the environment.