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EV charging stations grapple with profitability

MS Research finds a major struggle within the electric vehicle (EV) charging station market to find ways to maintain revenue profitably and sustainability.
According to IMS, there are 75,000 EV charging stations currently installed globally, rising to 48 lakh in 2015. However, the industry is struggling to find ways to generate a return on this installed base.

IMS Research Senior Analyst Helena Perslow comments, “Even as volumes of charging stations ramp up in the near term, it isn’t clear which segment of the value chain will be profitable. Various business models are being experimented with, but clearly there will be winners and losers.”

Manufacturers of charging stations are in a very difficult position. Demand for electric vehicles is uncertain, yet a developed infrastructure of charging stations is a pre-requisite for growth in EV sales. Manufacturers are therefore saddled with development costs for a product for which there is no clear demand. Whilst many are taking a long-term perspective, many current projects are heavily subsidised by government funding or suppliers are having to sell below cost. Clearly this isn’t sustainable, but until volumes ramp up it is difficult to see how manufacturers can drive profitable growth.
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