New mobility – key issues to consider

Mobility without CO₂ emissions

Reducing CO₂ emissions from the transport sector is one of the key ambitions of policy makers – not just in the EU, but globally. To achieve this goal, significant and transformative investments in new zero-emission vehicle models, battery manufacturing capacities and – most importantly – EV charging infrastructure will be required. This offers significant opportunities, albeit under a still developing legislative framework.

Key issues to consider

Diverse and fragmented market conditions

The market for EV charging points is diverse and fragmented, offering opportunities for start-ups, buy and build strategies and joint ventures (JVs). There are few truly international or even national players yet and the largest networks are often operated by state owned utilities (as public service provides) and limited to individual municipalities. Private operators exist but are often small and still building up their EV charging point networks. Appreciating the challenges and the need to navigate the complexities of the market, the building process often includes strategic partnerships (e.g. Mercedes and E.ON regarding charging parks). Despite the notable M&A activity, there is room for expansion and additional competitors, but market consolidation is also to be expected as the market matures.

EU legislation continues to evolve

The new Alternative Fuels Infrastructure Regulation will be applicable from April 2024 and will set ambitious targets for additional EV charging points across the EU, especially along core highways. These targets are based on EVs registered in each market and will be binding for the member states.

The Regulation also establishes new rules on card payment options to increase accessibility. These will later also apply to many existing charging points which require additional investments. There is also an attempt for higher scrutiny on fair and transparent pricing for end customers which might limit pricing model flexibility in the future. That is also a focus of competition authorities already now in ongoing investigations.

Public funding and outside investments

Member States offer various subsidy programs to support rollout of EV infrastructure. However, funding most likely does not meet demand. for example, the German 2bn fund on high power charging network is already closed (again). CPOs interested in rapid growth will likely be interested in external investors and to build joint ventures, offering opportunities not just for operators but also capital investors.

Complex framework of contracts

The B2B relationship between charging point operators (CPO) and the mobility providers (EMP/MSP) dealing with end-customers is key to revenue in the EV charging market. Both sides are interested in commercially favourable contracts and negotiation power strongly depends on market share. Parties have to keep a close eye on regulation and competition law, especially when it comes to charging prices.

CPOs will also look to source out as much actual operation work as possible (maintenance, energy purchasing etc) which again requires complex contracts to transfer the legal obligations of CPOs properly.

Access to sites

Access to privately owned sites requires negotiations with private landlords, which may make rapid expansion difficult if each site is owned by different landlord. 

Access to public streets and spaces typically requires a governmental permit and lengthy application processes, which may also limit rapid expansion. In addition, municipalities may also take an active interest in coordinating where and when EV infrastructure is to be constructed, which may not align with an existing business plan.

Our teams would be more than happy to support you on your energy transition journey and discuss any aspects with you. Please feel free to contact your usual Freshfields contact or one of the key contacts below if you have any questions.