By Maciej Lehmann, Investment Analyst at FEV, and Moritz Jungmann, Investment Partner at FEV

The rise of electric vehicle adoption in recent years represents a profound shift in how societies perceive mobility and energy consumption. With governments, industries, and individuals alike recognizing the urgency to transition from fossil fuels, electric vehicles have gained unprecedented popularity due to their capacity to mitigate greenhouse gas emissions, reduce air pollution, and decrease our dependence on non-renewable resources.

With almost 8 million EVs on European streets today, and an estimated growth of  53% this year, public charging technology as much as the EV driver’s charging experience became one of the hottest topics in venture capital; while for FEV the topic has been present since inception, with investment made in Virta, Hubject, and vinli, the increasing complexity demands continuous product development work and offers many opportunities for new actors.

In our pursuit of a more comprehensive understanding of the EV charging landscape evolution we engaged in conversation with Christian Hahn, CEO of Hubject, following its recent Intercharge Network Conference 2023 (ICNC23) a premier B2B event for eMobility.

Hubject is on a mission to revolutionize the electric mobility market. Hubject is the largest eRoaming network globally, serving as the charging infrastructure interoperability layer. Through its Intercharge platform, over 1,000 B2B partners ensure a seamless and hassle-free charging experience for electric vehicle users.

Our discussion with Christian delved into the company’s perspective on emerging trends and prospects within the EV sector and provided key insights of what’s to come over the next years.

Future Energy Ventures (FEV): The EV market has been growing much faster than anticipated and the latest market forecasts assume that this trend will continue. Bloomberg NEF now predicts 781 million passenger EVs on roads globally in 2040, from just 27 million today. After being in the market since its early days, how have you observed the shift in market sentiment, and what do you anticipate for the future?

Christian Hahn (CH): We maintain a positive outlook for the number of EVs in place in the coming years. Nevertheless, the road to success will have some bumps. After very successful years in 2021 and 2022, we face some challenges in 2023 in the larger European markets around take rate and utilization. Nevertheless, we are confident it will take hold soon, the impending total ban on internal combustion engines (ICE), and impact on customer behaviour and industrial investments. With the advancements in charging, like reliability and quality of charging infrastructure, improvements in customer experience of charging are being pushed forward.

FEV: The EU is at the forefront of renewable technology deployments, driven by its commitment to climate goals, urgency for energy independence and society climate awareness. With Hubject’s global presence, how do you see the role of different market players in the fight against climate change?

CH: We appreciate the European Union’s strong support in many startup-related topics, especially providing particular support with very impactful R&D programs. Global development has now become more critical as well. Due to local funding and funding requirements, EV companies producing hardware are now being advised to refocus on the US market. In the Asian markets, we see intense competition from new entrants, with an extensive portfolio of technologies and software focusing on Home Energy Management Systems, including battery technology, inverters, wall boxes, etc. These two trends are creating a market environment that you can only survive if you can scale vastly, which is primarily a challenge for startups and new companies.

FEV: Public charging experience and range anxiety remain significant barriers to mass EV adoption. From your perspective, what are the key issues with the current EV charging infrastructure that deter vehicle drivers from embracing EVs? Additionally, do you see any viable short-term solutions to address these challenges and accelerate EV adoption?

CH: Our core mission – enabling seamless charging – is finally becoming a reality in more European markets. Taking a summer holiday in Europe with an EV was a challenge five years ago; that is not the case today. For example, a fast-charging station is now in place in Germany at nearly every main highway exit. We believe the next step will be to enhance quality and reliability further. Customers would like to understand better which specific charging stations work best with their EVs, as there are remaining issues around interoperability. This will also drive the development of different business models, focusing on lower quality, for a more affordable price or high quality for premium pricing.

FEV: EV market has been one of the hottest climate-tech verticals for VC investment over the last few years. We saw a massive amount of capital going to public charging apps, smart charging companies, V2G technologies, EV financing platforms, EV fleet management software. In your perspective, what are the neglected and forgotten pieces of the EV charging landscape?

CH: We strongly believe that the combination of charging and energy management will become crucial for the future, considering that private charging at home or the workplace will reach millions of charging sessions daily in a more mature EV market. Therefore, we believe these solutions require more “Made in Europe” solutions.

FEV: Merger and acquisition activity in the EV charging sector has been remarkably high, with multiple market participants seeking to expand into this business domain (e.g., automotive OEMs, energy companies, or even real estate firms). How do you envision the consolidation forces shaping the public charging space? Will there be a trend towards fewer charging operators and service providers in the next five years, or is the landscape getting only increasingly more complex?

CH: This is a challenging question, especially considering a company like Hubject lives from “complexity.” We currently have more than 1,000 charging point operators (CPO) in Germany and more than 400 in France, but with only a market share of EVs in a single digit. We will, therefore see more and more EVs on the road soon, but it seems a bit too early to believe that consolidation will happen now when the market is just starting.

Our view at Future Energy Ventures:

As e-mobility is a core market in FEV’s strategy, next to the trends mentioned by Christian, we focus at moment on three core areas in the public charging space:

  1. Streamlining Infrastructure Deployment Through Optimal Chargepoint Location
    The process of securing approvals for EV charger locations is becoming a bottleneck, especially in comparison to the speed at which chargepoints need to be rolled out. Navigating the permitting and administrative red tape poses challenges, leading to project delays and application rejections. Some solutions include identifying suitable grid connections, conducting feasibility studies to improve application accuracy, and choosing the right locations to contribute to optimal infrastructure utilization.
  2. The Surge of Public Charging Sessions and Enhanced Infrastructure Utilization
    With EVs entering the mainstream, their adoption will no longer be limited to wealthier/upper class with access to home charging (single-family housing). In urban areas, most people will rely on semi-public and public infrastructure. The number of charging sessions and number of transactions occurring at public locations is poised to soar. In order to integrate EV charging without expensive grid upgrades, dynamic pricing can play an important role in guiding EV drivers on when and where to charge.
  3. Driving Adoption through Seamless Digital Driver Experience
    The convergence of energy and transportation sectors is opening doors for new entrants, blurring the lines in the e-mobility landscape. Key e-mobility stakeholders with a good EV driver touchpoint are aiming to broaden their customer relationships. One driver of enhanced customer engagement has been mobile applications, which serve as the ideal interface for EV drivers and encourage players to evolve into eMobility Service Providers (EMPs) to interact and engage users. In addition, enhanced user experiences, continuous streamlining, and decreasing ownership costs (due leveraging energy price fluctuations and demand response mechanisms in charging), will further boost the technology adoption.

While we still have a way to go to optimize the EV driving experience, the public charging sector remains extremely lively, and many companies are actively working hard to make public charging better and drive EV adoption further. Notable startups to watch in each of our hot trends include:

  • Eco-movement (charging stations data platform), support with charging network planning and gives smart pricing intelligence,
  • Deftpower (EV charging SaaS platform) – streamlines the public charging experience and pioneers the smart charging on public infrastructure,
  • Tronity (connected car app) – “the dashboard” for EV driver.

But that’s just one of the interconnections trends we see. As Future Energy Ventures is invested in multiple e-mobility companies, we are excited to share our insights on other verticals in our upcoming articles – stay tuned!