Although the United States has long lagged other regions in electric vehicle (EV) adoption, the country is now reporting record growth. EVs represented about 8 percent of all new passenger cars sold in the United States in 2022, up from around 5 percent in 2021.
These insights were developed by the McKinsey Center for Future Mobility (MCFM). Since 2011, MCFM has worked with stakeholders across the mobility ecosystem by providing independent and integrated evidence about possible future-mobility scenarios. With our unique, bottom-up modeling approach, our insights enable an end-to-end analytics journey through the future of mobility—from consumer needs to a modal mix across urban and rural areas, sales, value pools, and life cycle sustainability. Contact us if you are interested in getting full access to our market insights via the McKinsey Mobility Insights Portal.
The United States will need about 28 million ports by 2030 to meet the demand for electricity by zero-emission passenger vehicles (Exhibit 1). Private ports are expected to increase in number from around 2.5 million to nearly 27 million, representing about 95 percent of the total.
There are two types of public charging: direct current fast charging (DCFC), which is used on highways and for fast fill-ups, and slower Level 2 (L2) charging, which is available at places such as grocery stores, malls, car dealerships, golf courses, and banks, where people may park for longer periods. L2 charging may also occur next to sidewalks or near street parking. About 150,000 L2 and DC plugs are now available across the United States, but that number is expected to increase to 1.5 million by 2030, when they will represent about 5 percent of the total.
While public fast charging is a piece of the overall charging solution, current EV demand for electricity is still so low that profitability is challenging—and this could remain the case over the short to medium term. To help charge-point operators improve their financial picture both now and during scale up, we examined the EV market, including the ongoing shifts in ownership patterns and charging demand. We then analyzed the factors that influence charging station revenues and identified potential improvement levers for optimizing profitability. Among the most important: a focus on utilization and pricing.
Currently, most EV owners tend to be home owners with access to a home charger, and they often have a second vehicle for long-distance trips. But even people that fit this profile will sometimes need public charging. For instance, they might forget to charge their vehicle overnight and thus need to charge on the road, or they might find that the slow L2 charger at their workplace parking garage, where they usually connect during an eight-hour workday, is out of commission. Additionally, long journeys—those over 150 to 200 miles—will necessitate public charging.
As EVs become more common and their owners no longer come primarily from higher income groups, the percentage of charging that occurs at home is expected to fall to 50 percent by 2030 (Exhibit 2). Although about 65 percent of the US population own or rent a single-family home, many people lack garages where a charger could be placed, or find that installation is prohibitively expensive.
Recognizing the need for public chargers, many new players are now entering the sphere. For instance, some major automakers are banding together to invest a minimum of $1 billion in a joint venture that will build stations with about 30,000 fast chargers in urban and rural areas of the United States.
While charge-point operators can follow multiple strategies for generating revenues, two business models are now most common (Exhibit 3):
Regardless of business model, the up-front capital costs for fast charging stations are high. A 150 to 350kW DCFC charging unit can cost anywhere from $45,000 to over $100,000, and installation costs can range from $40,000 to over $150,000. Additionally, grid upgrade and integration costs can amount to millions, depending on the number of fast chargers installed at the location.
We examined the economics for a hypothetical DCFC charging station with an owner-operator business model in California. In line with typical patterns, we assumed the charging station would have 4 150kW chargers.
Assuming 15 percent utilization—equivalent to about seven 30-minute charging sessions per day—our hypothetical station would generate $265,000 to $285,000 in annual revenue, given a price of $0.45 per kWh dispensed. (Pricing may vary by time of day). On the cost side, we assumed annual expenses of $220,000 to $250,000 for electricity, demand charge rates, fixed operational expenditures, R&D, and SGA.
Even if fast public charging stations do not receive subsidies or credits, they may still be able to improve their bottom line. We have identified several potential levers for driving improvements that span multiple areas: utilization, electricity cost, electricity price, demand charge cost, lifetime hardware costs, and ancillary revenue (Exhibit 5).
While all of these levers are important, charge-point operators would have to apply them aggressively to make a difference. Consider utilization and competitive pricing, which could potentially drive the greatest gains. Using our example of a typical fast public charging station in California, the owner-operator would break even if utilization increased from 15 percent to 20 percent, or if the price for charging customers increased from $0.45/kWh to $0.53/kWh. Profitability would also be possible in other scenarios (Exhibit 6).
Achieving the desired improvements in price and utilization may not be easy, however. The average nationwide annual utilization rate for 2022 was about 7.5 percent, with the average for highest recorded month around 12 percent—both lower than the 15 percent utilization assumed in our example.
Pursuing ancillary revenue streams, such as retail sales or advertising, could also help public DCFC charging stations improve the bottom line. At traditional gas stations, 35 percent of sales revenue comes from the associated convenience stores or food service. (About 50 percent of people who buy fuel also make retail purchases). Since public DCFC stations are placed in a wider variety of locations than traditional stations, there may be more variation in the opportunities that they pursue. If the DCFC station in our example generated $12,000 in ancillary revenue streams, it could break even.
Peter Fröde is an associate partner in McKinsey’s Southern California office, Morgan Lee is a solution associate in the Waltham, MA office, and Shivika Sahdev is a partner in the New York office.
The authors would like to thank Vittorio Bichucher, Priyank Chheda, and Cross Pagano for their contributions to this article.
Everyone who took part in the survey is a member of the Center''s American Trends Panel (ATP), an online survey panel that is recruited through national, random sampling of residential addresses. This way, nearly all U.S. adults have a chance of selection. The survey is weighted to be representative of the U.S. adult population by gender, race, ethnicity, partisan affiliation, education and other categories. Read more about the ATP''s methodology.
We supplemented the data from the survey with data on EVs and charging stations from the U.S. Energy Department, specifically the Office of Energy Efficiency & Renewable Energy and its Alternative Fuels Data Center. This dataset is updated frequently; we accessed it for this study on Feb. 27, 2024.
The analysis in this report relies on two different measures of community type, one based on what ATP panelists self-reported when asked "How would you describe the community where you currently live?" This measure is used when discussing differences in public opinion towards EV charging infrastructure or related issues and distinguishes between urban, suburban and rural areas. The other measure is based on the U.S. Census Bureau''s urban-rural classification, which identifies urban and rural areas based on minimum housing unit density and/or population density thresholds.
Here are the questions used for this analysis, along with responses, and the survey methodology.
Several recent laws, including the 2021 Infrastructure Investment and Jobs Act and the 2022 Inflation Reduction Act, have sought to encourage the development of electric vehicle infrastructure and increase the adoption of electric vehicles (EVs). And a Pew Research Center survey paired with an analysis of U.S. Department of Energy data finds that roughly six-in-ten Americans now live within 2 miles of a public charger. There were over 61,000 publicly accessible electric vehicle charging stations in the United States as of February 2024.
The vast majority of EV charging occurs at home, but access to public infrastructure is tightly linked with Americans'' opinions of electric vehicles themselves. Our analysis finds that Americans who live close to public chargers view EVs more positively than those who are farther away.
Even when accounting for factors like partisan identification and community type, Americans who live close to EV chargers are more likely to say they:
Here are some other key takeaways from our geographic analysis of EV chargers:
The number of EV charging stations has more than doubled since 2020. In December 2020, the Department of Energy reported that there were nearly 29,000 public charging stations nationwide. By February 2024, that number had increased to more than 61,000 stations. Over 95% of the American public now lives in a county that has at least one public EV charging station.
EV charging stations are most accessible to residents of urban areas: 60% of urban residents live less than a mile from the nearest public EV charger, compared with 41% of those in the suburbs and just 17% of rural Americans.
As of Feb. 27, 2024, there are more than 61,000 publicly accessible electric vehicle charging stations with Level 2 or DC Fast chargers in the U.S.
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