The mushrooming demand for electric vehicles is encouraging electric vehicle charging system manufacturers to focus on developing technologically advanced and innovative variants. Moreover, with the surging concerns being raised over the deteriorating environmental conditions, many electric vehicle manufacturers are making huge investments in research and development (R&D) projects in order to fuel advancements in the electric vehicle technology. For instance, Fiat Chrysler Automobiles N.V. announced in July 2019 that it intends to make an investment of $788 million (EUR 700 million) for developing a manufacturing line for the newer models of its Fiat 500 minicar.
This manufacturing line will enable the production of around 80,000 units every year. These investments are causing a sharp fall in manufacturing costs, which is, in turn, leading to the production of affordable electric vehicles. This is subsequently pushing up the demand for on-board chargers. These projects have led to the development of batteries having increased power densities. Besides, the increasing deployment of alternating current (AC) charging stations in emerging economies is also fueling the expansion of the on-board charger market.
On-board chargers are deployed in plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs). Over the next few years, the adoption of these chargers in BEVs is predicted to rise at a faster pace than that in PHEVs. This will be because of the soaring sales of BEVs in several countries, on account of the growing implementation of favorable government policies and increasing provision of financial incentives in the form of grants, subsidies, and tax credits by various governments across the world.
For example, the government of California is offering a very high tax credit, which falls in the range of $2,500–$7,500, based on the capacity of the electric vehicle’s battery, on the purchase of a BEV. These financial incentives are facilitating the adoption of electric vehicles, which is, in turn, driving the demand for on-board chargers. Depending on power output, on-board chargers are classified into those producing energy below 7.2 kW, between 7.2 kW and 15 kW, and above 15 kW. Out of these, the demand for chargers generating more than 7.2 kW power was found to be the highest in the world in 2019.
Hence, it can be said without any doubt that the demand for on-board chargers will surge sharply in the forthcoming years, primarily because of the growing deployment of electric vehicles and the development of technologically advanced charging systems, on account of the surging investments being made by industry players across the world.