The race for investment targets in electric mobility (eMobility) and electric vehicle (EV) charging services is now at a peak as the industry experiences fundamental transformation. For investors, it is increasingly difficult to identify eMobility businesses and charging services investments as companies continue to be acquired by eager buyers. While the charging market is experiencing intensive growth, few entities are now available for acquisition.
Alternative methods to venture capital and private equity funding, such as special purpose acquisition companies (SPACs), are more prevalent despite the perceived investment risk. However, EV original equipment manufacturers (OEMs), data and service companies, charging networks or infrastructure companies continue to receive funding and go public by means of a SPAC on the basis of a strong outlook.
Demand for EVs is expected to outpace internal combustion engine (ICE) vehicle sales by attracting mass-market adoption driven by environmental regulations and changing consumer views. As the retail cost of EVs declines due to improving battery technology, the increase in EV sales will correspondingly prompt growth for charging infrastructure, currently a pain point for consumers in some markets. This rapid growth has spurred innovative solutions to improve consumer experience and increasingly seamless solutions. Investors are looking to capitalise on this market for developing infrastructure to address consumer and commercial demand over the next decade.
In this co-authored paper with Hubject’s Oliver Adrian and Adityaa Ravi, CRA’s Robert Stocker evaluates the changing EV investment landscape, key players in the market, investment opportunities and overall market growth. Leveraging Hubject Consulting’s eMobility expertise and Charles River Associates’ (CRA) energy expertise with our combined strategic positioning and extensive network in the market, we guide investors to make well-informed decisions and have developed a tailored approach for those ready to enter the market.
Our key findings bring light on how investments in EV charging could be approached:
- Investors are perceiving EV charging businesses as highly promising investment targets based on their long-term revenue projections, however the relevance of strategic investments in this area cannot be underestimated as has been displayed by the performance of recent SPACs.
- Most EV charging businesses either underwent a public offering to access financing to innovate quicker or were acquired by major firms in order to access their established networks and financial backing.
- EV charging businesses differentiate significantly by market approach and business model – each investment should be considered independently and without the right strategic due diligence, the risk for poor investment is high.