Won Moon Joo
January 3, 2022
With 2021 behind us, let’s take a look at some of the major developments of the past year.
Many of the changes and developments have been driven by increased government investment in charging infrastructure around the world and significant advances in EV charging technology. Due to these developments, 2021 has seen rapid market growth.
According to Reports and Data, the EV market is anticipated to grow from USD 287.36 billion in 2021 to USD 1318.22 billion in 2028.
That equates to a Compound Annual Growth Rate (CAGR) of 24.3% in the 2021-2028 period, which means that there are very good times ahead for companies involved in the EV industry!
From new legislation, IPOs, and more, let’s take a look at what happened in this exciting year for EVs.
Since Joe Biden took office in January 2021, the USA has seen a big push towards providing the necessary infrastructure to support electrified vehicles.
President Biden set an ambitious goal of 50% of car sales to be electric by the year 2030.
To help achieve this goal, he recently signed a $1.2 trillion Bipartisan Infrastructure Law which includes $7.5 billion for electric vehicle charging stations and $7.5 million for electric school bus fleets.
Additionally, the White House has issued a press release that details the government’s forward-thinking initiatives for EV adoption, known as the Biden-Harris Electric Vehicle Charging Action Plan.
Among other things, the Department of Energy and Department of Transportation are to create a Joint Office of Energy and Transportation. This department will focus heavily on EV infrastructure and ensuring that the national charging network is extended throughout the US.
The press release also promises that by February 11th, 2022, they will issue guidance for states and cities to strategically deploy EV charging stations throughout the country and plans for new highways.
The Biden administration also released this request for information that provides details of available domestic funding to accomplish EV goals. Funding is available right now, in case you want to apply!
Meanwhile, the 2021 United Nations Climate Change Conference was held in Glasgow, Scotland.
Countries agreed to deliver on the primary goal of reaching the Paris Agreement’s target of limiting global warming to 1.5 °C above pre-industrial levels.
The Glasgow Climate Pact was also agreed upon, which set the goal of decreasing carbon emissions by 45% by 2030, which would help to keep the goal of 1.5 °C alive.
However, despite these agreements, some coal-reliant countries indicated they won’t stop using coal until the 2040s or later.
One of the biggest IPOs this year was the Amazon and Ford-backed startup Rivian, which raised $12 billion at offering and whose stock price has soared since then.
Another big name was Arrival.
Through a SPAC merger, Arrival listed on the NASDAQ with a roughly $13 billion valuation and became the UK’s highest ever tech IPO.
Lucid Motors also went public through a SPAC, adding to the list of other SPAC mergers like Canoo, Faraday, and Fisker.
However, there were a few stumbles too.
Companies like Workhorse, Nikola or Lordstown Motors made major news with SEC and Department of Justice investments, CEOs charged with fraud, and other troubling news.
Soaring energy prices in Europe are causing many energy suppliers to become insolvent.
A dozen power suppliers in Britain, a few small suppliers in Germany, and multiple Dutch suppliers have ceased trading since early September.
As a result, many suppliers have struggled with rising wholesale gas and electricity prices. They are faced with the challenge of how to balance their books without charging customers higher prices due to government caps and contracts.
Effectively, energy suppliers have agreed to sell energy at less than the price they pay for it. Current business practices in the energy industry make it tough to combat these potential losses.
For example, in the Netherlands, there are both fixed-rate and variable-rate energy contracts. Customers may sign up to fixed-rate contracts to hedge against the risk of energy prices rising more than expected by paying a relatively high price for the long term. On the other hand, variable contracts allow companies to change their rates every 6 months.
However, the steep rise in energy prices means that many suppliers are losing money on both types of contract.
Being unable to raise the prices of their fixed-rate contracts or increase rates beyond government caps, many suppliers have already declared bankruptcy or are in the process of doing so.
The increased adoption of EVs means that utility companies are also having to transition to the new landscape. Some utilities have released special EV rates that help to measure the electricity used to charge a vehicle. For example, PG&E has two different EV rates, although both use Time of Use rates to charge their customers.
The first method combines EV electricity costs with household electrical usage. The second method measures EV charging separately through the installation of a separate meter. Both methods are subject to TOU rates which involve off peak, partial peak, and peak hours.
SEPA has done a lot of research into what customers want to see when charging their vehicles with pilot studies.
Encouraging off-peak residential charging is critical for reducing peak loads on the grid and avoiding costly infrastructure upgrades.
Read more about the SEPA report here.
2022 looks set to be an exciting year for the EV industry.
New car releases and advancements in software and technology, such as more efficient batteries, means that there are exciting times ahead!
As the number of electric vehicles on the road increases and charging infrastructure expands, we expect that intelligent charging and efficiency will become more and more desirable.
Read more about smart EV charging here.
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