Europe's Biggest Markets Need $17 Billion to Keep Teslas Rolling

(Bloomberg) -- The growth of electric cars in Europe’s two biggest vehicle markets will require billions of dollars of investment in ways to keep them charged.

The number of electric vehicles could skyrocket to 23 million in Germany by 2040 and 17 million in Britain from about 200,000 and 140,000 now, according to a report published Thursday by Aurora Energy Research Ltd. Building the infrastructure needed to charge this new fleet will require as much as $17 billion of investment.

“This will clearly be a big market, so it is important that investors position themselves for mass adoption of EVs,” said Hanns Koenig, Aurora’s lead on German market part of the study in Berlin. Electrification will be one of the biggest investment opportunities in transport, he said.

Europe's Biggest Markets Need $17 Billion to Keep Teslas Rolling

As many as 4 million charge points will be needed in Germany and 3 million in the U.K., with Britain needing proportionally more for private parking spaces, according to the report. The charge points will be mostly spread across fleet vans, workplace charging, public car parks and motorway service stations and Aurora found that adding technologies like solar and batteries could lower the cost of electricity to consumers and boost revenue for operators from storing and selling unused power to the grid.

So far, a clear winner in charging infrastructure is yet to emerge. Big oil companies including Royal Dutch Shell Plc and BP Plc are looking to translate their gas station success to the electric vehicle charging market. They are likely to have to battle for market share with utilities and technology companies, which also see charging as their natural territory.

“It’s fairly clear that it will be a mix,” Koenig said. “Most EV users who can are likely to install a charger in their home, but that doesn’t mean they will always charge there; it may be cheaper for example if offered as a perk by the employer or by a supermarket or more convenient elsewhere.”

It’s not just service stations that will change. Charging could add as much as 17 terawatt-hours to annual electricity demand in Germany and 15 terawatt-hours in the U.K., according to the report. If people can be persuaded to charge up their cars during the night or when there’s a plentiful supply of cheap renewable energy, wholesale prices won’t necessarily increase despite the added demand.

Asset finance, project finance, corporate facilities are potential options for senior debt financing of EV charging infrastructure, the report said.

©2018 Bloomberg L.P.