EUROPEAN E-MOBILITY STARTUP MAP
By 2030, the global electric vehicle stock expands to a whopping 350 million vehicles1. However, we believe that the development and deployment speed of the required infrastructure is lacking.
To fully realize the benefits of electric vehicles (EVs), a holistic approach is required that considers not only the supply of electricity, but also the storage of electricity, (supporting) charging infrastructure, charging services and the integration of EVs into the grid.
EUROPEANE-MOBILITY INFRASTRUCTURE LANDSCAPE
We structure the European e-mobility infrastructure landscape alongside two axes: First, we differentiate between software and hardware solutions and a mix between both. Second, we map startups along the value chain of thee-mobility infrastructure – from battery technology, over charging infrastructure to enabling tools.
Based on the two axes, we derive sub-segments – in this report, we highlight the most interesting and promising sub-segments where we see a lot of potential for startup to innovate. In total, we have mapped over 200 startups headquartered in Europe and identified key trends, challenges, and opportunities.
Batteries are playing a vital role in the move towards building a sustainable e-mobility infrastructure, since they are used in every EV. There are also potential opportunities in the wider battery technology spectrum outside our mobility focus (such as grid storage and stationary energy storage). However, battery technologies with mobility applications are complex and rapidly evolving. The main challenges are production costs, durability, battery recycling and disposal as well as safety. To meet those challenges, innovation is needed with a focus on developing new chemistries and designs, as well as improving the scalability and sustainability of production processes. Startups play a crucial role in addressing those manifold and complex innovation opportunities. Those needed solutions can be software but also hardware based and offer a vast spectrum for startups to innovate.
BATTERY TECHNOLOGY STARTUP LANDSCAPE
Batteries degrade over time and then may need to be replaced, which is costly, inefficient and not very environmentally friendly. Hence, battery analytics can help to extend the lifetime of batteries by providing insights into the performance and health of the battery over time. There is a growing number of startups that build software solutions to monitor and analyze data from batteries to determine their performance and health. This can include measuring voltage, current, temperature, and other parameters to assess the battery’s capacity, charge and discharge rate, and overall condition. Based on this information, battery lifetime, replacement cycles and performance can be optimized. Through this approach, battery analytics has been shown to extend the operational lifetime of batteries by as much as 50%.2
Our investment thesis: To save resources, battery lifespan needs to be extended without compromising performance – battery analytics and management software solutions are the brain and center stone in this growing market.
While it is indisputable that a series of technological breakthroughs and improvements in batteries served as the basis for today’s EV revolution, charge anxiety and slow battery charging speeds remain significant barriers to future e-mobility. As the world electrifies and taps into more sustainable forms of energy, advanced battery technologies which promise to improve energy efficiency and drastically decrease charge times from hours to minutes become crucial for EV mass adoption.
Startups are pioneering the next generation of smart batteries, developing innovative solutions for ultra-fast, hyper-charging or extreme fast-charging features. At the same time, they are developing lighter batteries with more power and a longer lifetime between charges. On the one hand, advancements come from a combination of cutting-edge software algorithms (AI) and electronics which enable ultra-fast charging of off-the-shelf batteries without compromising cycle life. On the other hand, new groundbreaking chemistries or materials in batteries are being invented to improve charging speed. The industry has seen deep-pocketed automotive and energy incumbents sponsor the development and commercialization of these new technologies.
Our investment thesis: The demand for advanced battery technology is growing. Smart batteries that offer increased energy efficiency, faster charging times, and longer lifetimes are crucial to the mass adoption of electric vehicles.
BATTERY RECYCLING AND REUSE
We see a lot of potential for battery recycling and reuse startups to revolutionize the way we use and dispose of batteries. The European Union aims to achieve a recycling rate of 65% for lithium-ion batteries by 2025, increasing to 70% by 20303. Additionally, it targets a recovery rate of 90% for cobalt, nickel, and copper, and 35% for lithium by 2025, with these figures rising to 95% and 70%, respectively, by 2030.
By recycling and reusing batteries, these startups can help to reduce the environmental impact of battery production and disposal, while also creating new economic opportunities. The focus areas of the startups are broad: they are developing new technologies and processes to extract valuable materials from used batteries and repurpose them for new applications. For example, some startups are focused on recovering metals such as lithium, cobalt, and nickel, which can be used to produce new batteries. Others are working on ways to repurpose used batteries for energy storage in buildings and on the grid. Additionally, with the increasing demand for electric vehicles and renewable energy storage, the potential market for these startups is expected to grow significantly in the coming years.
Our investment thesis: The recent European Green Deal will undoubtedly help with the further development and ramp up of the battery value chain (e.g. with EU targeting 65-70% recycling rate and 90-95% recovery rate by 2030). Startups disrupting the current energy-intensive battery recycling processes which are derived from the mining industry (i.e. pyrometallurgy or hydrometallurgy) will be the core drivers of value. Emerging direct recycling technologies which use advanced robotics will unlock higher yields of active materials and will be in a better position to scale at lower cost.
While in the US and Asia multiple joint ventures between established players and startups have already been set up to operate large scale battery recycling facilities, in Europe most facilities operate at a pilot phase and have yet to be scaled up.
With the increasing demand for EVs, it is expected that the charging infrastructure will continue to grow in the coming years, providing more convenient and reliable options for EV owners. By 2030, the EU needs to expand its current public charging network to at least 3.4 million charging stations to accommodate the growing demand for electric vehicles. However, the EU requires an additional 29 million private charging stations that would need to be installed by homeowners, apartment building managers, and workplace parking operators.4
The installation of these private charging stations will be a significant challenge, as it will require coordination between various stakeholders and the development of new regulations and incentives. Hence, we believe that this area holds various opportunities for startups to disrupt the space with marketplaces, full turnkey solutions and cheaper yet more efficient charging stations
CHARGING INFRASTRUCTURE STARTUP LANDSCAPE
CHARGE STATIONS - FULL TURNKEY SOLUTIONS
Charge stations startups that offer full turnkey solutions are becoming increasingly popular in the EV charging industry. These startups provide a comprehensive service that can include all steps from design, manufacturing, installation, operation, and maintenance to end user management and integration. They work with businesses, municipalities, and other organizations to help them setup and manage EV charging infrastructure. This eliminates the need for organizations to navigate the complex and often time-consuming process of setting up and managing EV charging infrastructure on their own. These startups are also focused on providing scalable and customizable solutions that can adapt to the specific needs of their clients.
On the one hand, providing not only the pure hardware infrastructure, but also additional services will strongly increase convenience and usability for potential owners and users. On the other hand, providing only software services without a relevant hardware component might not create lock-in effects.
Our investment thesis: All-in-one EV charging providers (horizontally integrating the HW buyer, charge point operator (CPO) and end-customers) will fuel the charging station ramp up (CAGR: ~30% of newly installed charge points until 2030) across Europe.
In order to keep up with the increased demand for EVs, standardization is becoming a key component of the infrastructure shift. No single player will be able to provide sufficient network density by themselves, and will be reliant on a network that is both open and accessible. Key initiatives such as the Open Charge Point Protocol (OCPP) have already been in place before the widespread adoption of EVs, in an attempt to set a standard for the communication between hardware and software.
As the industry matures, this trend of interoperability will further strengthen and give rise to specialized players. Rather than building everything in-house, CMS providers will be able to follow a best-of-breed approach and rely on external parties for certain features. Just like in other software markets, the value chain will be broken into smaller players that have core capabilities within very distinct functionalities.
ENABLING TOOLS STARTUP LANDSCAPE
OPEN APPLICATIONS & API'S
Given the combination of a highly fragmented supply side and the need for interoperability on the demand side, open applications & APIs will be essential.
The charging hardware is being producedby many different providers in the absence of a standard. In order for end customers toreceive any value, CMS providers and other key players will have to consolidate this difference. Rather than rebuilding integrations on a single provider basis, a large number of protocols and API providers are emerging in an attempt to commoditize the access to EV hardware. Think of what Plaid, Tink, and Yapily have done for the finance sector, the same logic applies here. Beyond hardware integrations, this notionis also captured within open applications that enable users to share and reuse best practices.
Our investment thesis: In the long run, we predict that interoperability and access to theEV segment will be covered by a handful of API providers. These companies will be the backbone of innovation for the EV segment and are a promising target for investors.
EV FLEET MANAGEMENT
Fleets composed of cars, vans, and delivery trucks are responsible for half of the road transport emissions in the EU, despite accounting for only 20% of totallight and heavy-duty vehicles. Thus, it comes as no surprise that fleet owners and operators are facing growing pressure from multiple stakeholders to disclose, monitor and reduce carbon emissions.
In an effort to reach net zero emission goals, fleet managers are accelerating the transition to electric fleets. This implies that, in addition to the usual fleet operations and maintenance data, they need to generate and integrate insights from a variety ofEV-specific data sets such as realtime battery usage, charging infrastructure planning, charging demand optimization, available energy in the power grid, charging payments and more.
Therefore, EV fleet managerswill benefit from holistic platforms that use high-techsolutions to ingest, cleanse and overlay a variety of internal and external data, offering realtime granular insights on fleets’ performance andemissions. These will empower companies to keep costs in check, conduct tailored CO2 reduction plans and drive strategic operationalchanges.
Our investment thesis: The big opportunity in this space comes from unified platform solutionswhich offer access to a full suite of data-driven services - from telematics, EV charging management, energy grid visibility to tailored climate intelligence insights. Partnerships and integrated data solutions will be key.
SMART GRID SOLUTIONS (ENERGY MANAGMENT, V2G, V2H, P2P)
Acting like big batteries on wheels, EVs unlock numerous possibilities to power equipment, homes and the power grid. Therefore, integrating EVs and the grid is crucial for an efficient and sustainable energy system. As automakers roll out vehicle-to-home (V2H) and vehicle-to-grid (V2G) capable EVs the demand for grid services is growing. Essentially, V2G enables energy to be pushed back to the power grid from an EV battery based on different factors, such as energy production or nearby consumption. According to the transportation electrification and V2G research organizations that work with power companies to implement this technology, one EV could power a home for two to five hours, or five homes for around an hour.5 Moreover, EV-elocity6, a research and development project focused on V2G, has concluded that V2G can reduce EV battery degradation by one-eighth (the equivalent to one extra year of use), and, in some situations, up to 450 kg of emitted carbon dioxide (CO2) or ~450EUR could be saved per vehicle each year.7
For years, the major hurdle hindering smart grid solutions was the lack of standardization across international legislation and the EV/energy value chain. However, as the pressure to combat climate change heightens, governments are now enforcing ambitious policies to standardize EV charging (e.g., ISO 15118, officially titled as “Road Vehicles – Vehicle to grid communication interface”).
Our investment thesis: The challenge for all startups and corporations operating in this space is to quickly become compatible with new standards and demonstrate rapid scalability and competitiveness to capitalize on the legislative momentum. Startups without the technical and operational expertise to adopt the new standards and scale will inevitably disappear.
CHARGE STATION MANAGEMENT PROVIDERS
Charge station management providers aim to provide an end-to-end offering. This requires a large stack of features ranging from hardware integrations all the way to billing and dynamic load capabilities. Although the number of required features is very high and may require significant effort, they are hygiene factors rather than highly technical or differentiated features. Winners in the space are marked by their agility and development capabilities that allow for rapid changes and specific customer requirements.
Charge station management providers can be split into full-stack and white label solutions. Given the competitive dynamics of the space and the fact that the feature stack is very homogenous, white label companies may have significant advantages when it comes to go-to-market. Rather than contesting for the same customer group without a significant USP, white label providers can tap into B2B customers that already own the end customer relations and will be the infrastructure layer for anyone that wants to convert/electrify their existing customer base. In the long run, the feature stack may evolve and provide an avenue for differentiated technical features. Smart grids and the avenue of VPPs are at the forefront of this.
Our investment thesis: Charge station management providers will be key to the electrification of vehicles. In the short run, the competitive dynamics will deem go-to-market as the winning factor. We predict that white-label providers that have dynamic capabilities will be best positioned to win in this space.
6 https://www.ev-elocity.com/ EV-elocity is a UK-based research and development project focused on Vehicle-to-Grid funded by The Office for Zero Emission Vehicles (OZEV) and the Department for Business, Energy and Industrial Strategy (BEIS) and facilitated by Innovate UK.
ABOUT THE AUTHORS
UVC Partners is a Munich- and Berlin-based early-stage venture capital firm investing in European B2B startups in the fields of mobility, deep tech, enterprise software,
and sustainability. We are a tech team for tech teams supporting early-stage founders who reimagine the future and shape the world we want to live in. As a team, we have made 100+ B2B investments with over 30 exits out of three early-stage funds and one opportunity fund.
Lakestar’s mission is to find, fund and grow disruptive businesses - enabled by technology - that are founded by exceptional entrepreneurs in Europe and beyond. Founded by Klaus Hommels, the team’s early investments include Skype, Spotify, Facebook and Airbnb. Since raising its first fund in 2012, Lakestar manages an aggregated volume of over €2.8bn across three early-stage funds and a growth fund. Lakestar is based in Berlin, London and Zurich.
Plug And Play:
Plug and Play Tech Center is a leading innovation platform and one of the most active early-stage VC firms globally with multiple success stories and 30+ unicorns in the portfolio, including PayPal, Honey, N26 and Einride. Headquartered in Silicon Valley, Plug and Play invests across more than 20 industries. Their European mobility offices are located in Stuttgart, London, Modena and Gothenburg.