BriefCASE: Powering up - EU regulations to spark a surge in EV charging convenience

The growth in demand for new electric vehicles (EVs) might have hit a speed bump in Europe lately, but European Union (EU) policymakers aren't hitting the brakes on enacting new regulations to strengthen EV charging network in the region. The paucity of charging points is regularly cited as a reason for prospective buyers holding back on EVs.

Last year, the EU passed a new regulation called the Alternative Fuels Infrastructure Regulation (AFIR) as a replacement to the catchily-titled Directive 2014/94/EU on alternative-fuel infrastructure, better known as the Alternative Fuel Infrastructure Directive (AFID). On 13 April 2024, the new regulation, aimed at improving the user experience and convenience while charging EVs at public chargers, came into effect.

The AFIR sets binding targets for refueling infrastructure powered by electricity or other sources. For charging infrastructure, AFIR mandates are related to distance, charging power output and payments. As per the distance-based targets for light vehicles, there needs to be a charger every 60 kilometers on the Trans-European Transport Network (TEN-T) core-road networks in each direction. By the end of 2025, each of the recharging pools should offer a power output of at least 400 kW and include at least one recharging point with an individual power output of at least 150 kW. By the end of 2027, this requirement will increase to 600 kW.

Notably, the AFIR requirements are dynamic, flexing to match the number of EVs in use. For each light-duty BEV registered in a country, publicly accessible recharging stations have to provide a total power output of at least 1.3 kW. For each plug-in hybrid electric vehicle (PHEV) registered, the total power output required is 0.8 kW.

New policy to drive higher utilization rate of chargers

There are also measures in AFIR governing how charging point operators (CPO) offer payments. The goal is that users will be able to seamlessly use and pay at any charging station in the EU, making all new publicly accessible recharging points accessible to users on an ad hoc basis. Another important clause in AFIR is related to the display of pricing. According to AFIR, "Users of alternative fuel vehicles should be provided with accurate price information before the start of the recharging or refueling session."

This will ensure that EV drivers will not require membership of the any charging network. This is expected to increase the utilization rate of the chargers. Although it may seem like networks will lose the membership model, the higher utilization rate of chargers could translate to better return on investment (ROI) moving forward. This mandate is currently applicable to only new installations, however, all existing DC charging points along the European TEN-T transport axis should be able to charge ad-hoc with a debit or credit card by 1 January 2027.

Combination of policies to tackle the charging issue

What's more, EU policymakers are not only focused on improving public charging infrastructure. Recently, the European Union parliament passed the Energy Performance Building Directive (EPBD), which mandates new requirements for recharging infrastructure and pre-cabling in buildings and adjacent car parks at home and the workplace.

According to the new directive, member states are required to simplify, streamline and accelerate the procedure for installing recharging points, and remove barriers to installing recharging points in multi-apartment buildings. In new and under-renovation residential buildings with more than three parking spaces, at least one recharging point should be available, and pre-cabling should be there for at least 50% of car parking spaces and ducting of recharging points for EVs. Non-residential buildings with more than five car parking spaces should have at least one recharging point for five spots, and non-residential building with more than 20 car parking spaces should have at least one recharging point for 10 spots.

Most charging still happens at home and this will continue for the foreseeable future. According to S&P Global Mobility, domestic charging stations will account for more than 93% of all charging stations deployed in Europe in 2030 (see the chart below).

The EU wants to achieve net zero emissions by 2050. Among other measures, the 27-member bloc hopes to meet its targets with the widespread use of EVs. The EU wants to have at least 30 million zero-emission cars in operation by 2030, and this target will be difficult to achieve without a widespread, user-friendly EV charging network. The revised EPBD and AFIR are key in this regard, and they are policy landmarks on the road to net zero by 2050.

Author: Srikant Jayanthan, Senior Research Analyst, Supply Chain & Technology, S&P Global Mobility

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This article was published by S&P Global Mobility and not by S&P Global Ratings, which is a separately managed division of S&P Global.