The US EV charging market is temporarily affected by numerous variables due to the 2024 US presidential election. Alex Lin, Chairman of Phihong's EV charging market subsidiary, Zerova, stated that while the US market has slowed down, markets in Europe and Japan have shown growth, compensating for the US market's vacancy. The overall revenue for 2024 is predicted to be about the same as 2023, with hopes of returning to a growth rate in 2025.
Lin stated that the US EV market clearly underperformed during the first quarter of 2024 and was affected by several disadvantageous factors, including the US government and automobile manufacturers' decision to slow down EV development, resulting in delayed related subsidy policies.
Moreover, many large EV charging companies in the US are currently at risk of incurring significant losses. In fact, two companies have already closed down, causing delays in progress for their clients' on-hand equipment. In addition to slowing down standard facility installations in the US, previously purchased EV charging stations cannot be installed either.
Besides excess orders placed during the pandemic, Lin pointed out that the main issue lies with clients worrying about unavailable maintenance for already purchased equipment, causing the market to become more reserved. Even if the market returns to a stabilized state, there would not be a large number of products pre-prepared in stock. Overall, current clients in the market have become more cautious when placing orders.
According to predictions by DIGITIMES Research, if the annual increase in the number of public EV charging stations becomes 1.15 times the previous year's starting from 2024, it would be possible to reach the Biden administration's goal of 500 thousand EV charging stations by 2030.
US market instability predicted to be temporary
In terms of his prospects for the US, Lin remains optimistic in the long term. Although standard facilities have fallen behind at the moment, product orders are expected to return to normal in the third and fourth quarters of 2024. The instability of the US market has impacted the company slightly. Initially, its growth in 2024 was roughly predicted to be 50%, but that projection has now been amended to be around the same as results from 2023.
For the first half of 2024, the North American market accounted for about 40% of Zerova's revenue, while the European market was close to 30%, and the rest was taken up by other markets including APAC areas such as Japan and Southeast Asia.
Regarding the US presidential election's impact on the setup of production sites, Lin stated that the company already has production sites prepared in Arizona and Texas. However, due to having no confirmed orders and the high cost of US manufacturing, clients will not purchase products necessary for running EV charging stations without subsidies.
Although the US market will temporarily have a significant impact, Lin believes that it does not indicate that the US would become impossible to continue cultivating in the future. Recent times have mainly been impacted by the US presidential election happening at the end of the year, with many variables coming into play, causing the market to remain in observation mode.
Lin pointed out that the company is still treating every investment with caution. Although it has established production sites in the US, it has yet to invest heavily in them. Besides the US, it has been setting up production sites in locations such as Japan, Vietnam, and Europe as well in response to the changing needs of the global market.
Zerova has been actively expanding in the European and Japanese markets in recent years. These markets have not been affected in 2024. Both have shown growth and are likely able to make up for the vacancy left by the US market.
Regarding the setup for the Japanese market, Lin stated that the main focus is on the development of transforming large vehicles and gas stations to being electric. Shipments have already begun, and the main gas station chains in Japan have progressively started installing Zerova's EV charging stations.
At the same time, the company has begun local manufacturing in Europe and the Middle East in response to the global trend towards de-sinicization, ensuring localized service. Plans for factories in Turkey and Portugal are currently in process. A ribbon-cutting ceremony will be held for the Portugal factory in the third quarter of 2024, and there are plans to establish factories in Italy and France in 2024 to continue pushing local business expansion.
In terms of his prospects for the future of the market, Lin stated that the goal for 2024 is to maintain revenue and ensure the gross margin is at a fixed level, which should also be similar to the performance from 2023. He emphasized that the company would not sacrifice gross profit for a bigger market share to avoid business failure due to service maintenance falling behind. At the same time, the company has continued to train its talents, improving upon the setup for future maintenance services.
Overall, investments in EV charging stations continue to grow in Europe and North American areas. AC chargers have decreased while demand for DC chargers and ESS have increased, making them the main profit source. Additionally, in terms of new products, shipments for the 480kW series are planned to be released in the fourth quarter of 2024 and are expected to greatly contribute to revenue in 2025. Zerova will place its main focus on the growth of DC chargers in the future.
