Electric vehicle charging drives IoT connectivity growth
Electric vehicle (EV) charging is one of the fastest growing areas for Internet of Things (IoT) connectivity. As the automotive industry drives towards a more sustainable future, the charging infrastructure for EVs needs to keep pace and it needs to be connected to ensure drivers can access reliable power services. The proliferation of charging points and a broad ecosystem of suppliers create opportunities for cellular IoT services, and mobile operators are gearing up to address this market, including through the development of a TM Forum EV charging framework. Service providers hope to cash in by providing remote monitoring and metering usage and a whole host of other data exchange applications.
Connecting EV charging points is a “favorite” target for most MNOs and MVNOs, and “everyone is interested,” as the requirements tend to be for “robust” connectivity using cellular networks, said Matt Hatton, Founding Partner at Transforma Insights. As the charging infrastructure is rolled out, “a large volume” of IoT connections will be installed in a relatively short timeframe, he added.
Transforma Insights forecasts 80 million private charging points, and 5.5 million public, will be installed in the next five years in Europe. The IoT connectivity revenues for EV chargers are “significant”, said Hatton. In Europe, EV charging currently accounts for 1% of IoT connectivity revenue and that will grow to nearly 7% by 2032, making it the fourth largest revenue segment after smart watches, factory-fit connected cars and electricity smart meters.
For telcos eyeing other EV-related offerings though, Hatton said, “extending into adjacent services will be a little difficult. It becomes very specialized very quickly. The prime thing is to deliver an underlying service that is optimized for the use case.”
In Europe, the sale of new petrol and diesel cars has been banned from 2035 as part of the EU’s green policy goals to reduce CO2 emissions by 55% by 2030 and achieve climate neutrality by 2050. For cars and vans specifically, which generate 15% of the EU’s carbon emissions, the aim is for zero emissions by 2035, with earlier reduction targets of 55% for cars and 50% for vans by 2030.
After China, the leading countries for EV adoption are Germany, Norway, Iceland, Sweden and the Netherlands. To support the transition to EVs, the EU also wants to have charging stations for cars at least every 60 kilometers on main roads by 2026.
EV charging is attractive because it is not only growing but also generates more average revenue per user (ARPU) than other IoT subscriptions, according to Onur Kasaba, Head of IoT Sales at Tele2.
“Due to its relatively high bandwidth consumption [compared to] other IoT applications and additional security focus, ARPU of an EV charging IoT subscription is multiple times higher than traditional IoT subscriptions,” he said.
Göran Näslund, Strategic Segment Manager for Utilities and Smart Cities at Telenor Connexion, said EV charging is one part of a bigger picture as the entire transportation sector is in the early stages of being electrified. “In the future you will have your EV car, maybe a smart meter and solar panel … It’s all going to be part of the electrification of society. It’s important for us and it’s an area that’s going to grow,” he said.
Both Telenor Connexion and Tele2 IoT have been serving this market since the first EVs hit the road ten years ago.
Telenor Connexion’s two major verticals are automotive and utilities, and EV charging has a foot in both, while it is also applicable to the smart cities sector, Näslund explained.
The operator views the electric car market as having three charging scenarios, each with different data and connectivity requirements: public fast charging stations; parking facilities, such as offices or hotels; and homes, which typically use WiFi. The focus for Telenor across these scenarios is on ensuring uptime, the user experience and scalability for global deployments and additional services.
For public charging, for example, “it has to work at all times and deliver the output promised,” said Näslund.
In addition to monitoring the charging points, metering usage, identifying users, and enabling transactions, IoT connectivity serves a broader EV ecosystem that goes beyond cars by enabling secure, real-time data exchanges between various entities, including apps, city planners, drivers, homeowners and payment systems.
“There are payment terminals, digital signage, signalling systems, surveillance and several other systems revolving around EV ecosystem”, said Kasaba.
He also sees opportunities for IoT to support new services since the average time spent at EV charging stations is at least 30 minutes, which changes driver behavior.
“We believe that EV charging stations can be points of interactive collaboration where different products and services can be advertised and bought on site, deliveries collected and much more,” he said.
Kasaba said this is an important industry for Tele2. “As an IoT connectivity provider [we] are enjoying the high growth, but also we can immediately feel the positive impact such adoption has on the environment.”
IoT is not the only avenue to pursue in the EV industry for telcos and some are exploring other business models. For example, BT announced earlier this year that its Digital and startup incubation unit Etc. will test the viability of converting telecom street cabinets into EV charging units. The two-year technical and commercial pilots are due to start in Northern Ireland this autumn with plans to expand to other parts of the UK.
The cabinets that are used for copper-based phone and broadband services and are scheduled to be decommissioned. BT said around 60,000 of its 90,000 cabinets could be upgraded to EV charging points. If the trials are successful, the operator will also evaluate whether to operate the infrastructure itself or in partnership with others.
Meanwhile, Deutsche Telekom has its own EV charge point operator subsidiary, ComfortCharge, that operates more than 190 fast charging stations in Germany. Where possible, ComfortCharge uses DT’s existing telecom infrastructure.