Coupled with the rising EV adoption rates worldwide, the DC fast charging market has seen an exponential rise in recent years and is projected to keep growing to become the most profitable type of public EV charging.
That said, DC fast charging remains an unfamiliar concept for many businesses, and investing in it can seem like a risky bet. This guide will demystify DC fast charging for business, offering a comprehensive overview of the topic and providing clarity about terminology, current market trends, opportunities, and business models.
In 2022, the number of DC fast charging stations globally rose by about 330,000, to a total fast charging station stock of 860,000 worldwide. Businesses have taken notice and sought to take advantage of this lucrative trend – fast charging is the fastest-growing electric vehicle (EV) charging market segment, accounting for over 72 percent of global EV charging revenue in 2022.
There are four key trends that shape the DC fast charging market currently:
At the same time, the DC fast charging market is also characterized by two main challenges:
Read more about current trends and challenges in the DC fast charging market here.
If you’ve ever tried looking into EV charging, you might have found yourself entangled in a web of technical jargon – from AC and DC charging to different types of charging stations, CPOs, EMSPs, kilowatts… Especially for newcomers, the world of DC charging can be a confusing one.
Below, we aim to break down these concepts and explain what they stand for to help you navigate and understand the EV charging landscape.
You probably know that DC fast charging refers to a type of quick EV charging, but do you know what actually makes a DC fast charger? And what about the “DC” in the name?
DC fast charging, also called rapid charging or simply fast charging, refers to a type of charging that feeds much higher-powered energy directly into an EV’s battery. The DC in the name refers to direct current and is the type of electricity used to achieve quick charging times in fast charging.
In contrast to alternating current (AC), which is readily available from the grid and used in most residential and regular public charging stations, DC charging needs to convert the current from the grid into direct current, requiring significant capital investment and increasing installation costs considerably.
But the tradeoff is often worth it: whereas a regular AC charging station can charge a medium-sized EV in around 2 to 8 hours, DC charging can achieve the same in under an hour and as little as 15 minutes, depending on the station’s power output and car’s charging capacity.
The DC fast charging ecosystem has a range of stakeholders who purchase, install, operate, and maintain EV charging stations. Three main ones are charge point operators (CPOs), e-mobility service providers (EMSPs), and charge point owners.
To read more about the differences between EV charging stakeholders, take a look at our article here.
Coupled with the rise in EV adoption, the demand for EV charging, and especially fast charging, is skyrocketing. The global EV charging market is expected to grow at a compound annual growth rate (CAGR) of 25.5 percent until 2030, with the DC fast charging market alone expected to be worth around $220 billion in 2030.
This exponential growth is driven by drivers’ willingness to pay a higher price for faster charging and the convenience it unlocks. Beyond flexibility, DC fast charging is a key tool in overcoming two of the biggest challenges of electric mobility: range anxiety and infrastructure capacity.
Range anxiety refers to the fear that many potential EV drivers have of running out of battery without being able to find a place to charge. While largely unfounded, as most modern EVs have more than enough range to cover the average daily commutes across the US and Europe, it remains an important barrier to electric vehicle adoption.
DC fast charging can help overcome this fear by offering a reliable, rapid solution to dwindling range mid-trip, allowing drivers to quickly top-up with minimal disruption to their journeys.
This links to the second most common barrier to EV adoption: concerns about charging infrastructure availability. DC fast chargers may be effective at topping up an EV quickly, but they’re only really useful if they’re available and accessible.
Expanding DC fast charging networks is essential for a range of people who rely on them: for instance, drivers in densely populated cities without access to a home EV charging station or people who often travel long distances for work.
DC fast charging stations are versatile and can be installed in various everyday locations: stores, restaurants, hotels, gyms, parking lots, and gas stations, ensuring they easily fit into drivers’ existing routines.
Read more about the rising demand for DC fast charging here.
Installing DC fast charging is a significant investment, so ensuring you have a plan to monetize your charging stations is important. There are three main ways you can generate revenue from a DC fast charging installation:
While revenue from charging is undoubtedly significant, you might find the draw of a well-to-do clientele to your site just as important, if not more. Installing DC fast chargers at your location can help put it on the map – literally.
EV drivers use a range of services to find charging stations, including charging maps and general maps apps like Google or Apple Maps. Having your business appear on these can draw in a pool of customers who may not otherwise visit your location and are willing to spend time and money at your site while their vehicle charges.
But beyond a direct return, DC fast charging can also improve your company’s brand image and reputation. EV charging stations are a visible reminder of your commitment to sustainability to everyone who visits your location and can help build a positive brand association with increasingly eco-conscious consumers.
While DC fast charging stations can be a highly profitable investment, they also require a significant upfront cost to install. So, it’s essential to consider your strategy when thinking about investing in DC fast charging and pick the one most suited to your situation.
There are many ways to invest in DC fast charging, but four main ones are:
Read more about DC fast charging investment strategies here.
DC fast charging is not a one-size-fits-all, and its profitability is contingent on its location. Selecting a suitable location for your needs and situation can help make the difference between a successful investment and an expensive liability.
There are a range of factors that can influence whether a location is suitable for DC fast charging stations, with some common ones being traffic and EV adoption in the area, commuting patterns, accessibility, and potential for future expansion.
Another important aspect is the presence of additional auxiliary services – for instance, a convenience store or food and beverage retail. These can help draw EV drivers to your location and offer upselling opportunities while their vehicles are charging.
Beyond customer demand and usage patterns, a key factor to consider when looking into a site for DC fast charging is its infrastructure, specifically its connection to the power grid.
The connection to the power grid can often be an afterthought for new development. After all, in most settings, it is a given, and for a lot of small- to mid-scale development, not something of concern.
Compared to other developments of their scale, DC fast charging stations disproportionately hinge on a suitable connection to the power grid due to their extremely high power requirements.
Consider a DC fast charging installation with 10 charging stations capable of delivering up to 150 kilowatts (kW) of power. When added up, this requires a grid capacity of at least 1,500 kilowatts (kW) or 1.5 megawatts (MW) – to put that in perspective, that’s roughly the power produced by a mid-sized wind turbine.
With such power requirements, building a DC fast charging installation isn’t as easy as picking a location and plugging it into the power grid. There is considerable upfront work required involving the grid operator, site owner, and utility company to ensure the site’s grid connection is suitable.
Read more about what you should consider about a location’s grid connection for DC fast charging here
Beyond finding a location, developing successful DC fast charging sites requires a few considerations. Here are a few aspects to take into account:
The DC fast charging market presents lucrative opportunities for businesses seeking to tap into it, but rushing into it without consideration can leave you with an expensive stranded asset.
From investment strategies to revenue models and scouting for a location, this guide gave an overview of the key aspects of a DC fast charging installation. To learn more about the different fast charging options available for your business, take a look at our DC fast charging solutions.
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