Good afternoon, everyone, welcome to Kempower's Capital Markets Day 2026. My name is Calle Loikkanen, I'm Director of Investor Relations. It's truly a pleasure to have you here, both those of you joining us in person and those tuning in remotely. Yesterday morning, we announced our updated strategy, Kempower 2.0, and financial targets for the period 2026 to 2030. Today, we'll go deeper into that strategy and explain how we plan to deliver against our targets. Before we begin, just a quick housekeeping note. Today's discussion includes forward-looking statements, which are subject to risks and uncertainties, so please refer to the disclaimer in the materials. In the unlikely event of an emergency here at the venue, follow the instructions from the venue staff and use the marked exits. With that, let's turn to today's agenda. We have a strong lineup of presentations for you today.
We'll start off with an overview of the strategy by Kempower's CEO, Bhasker Kaushal. We'll then move to the technology part with Jussi Vanhanen, Chief Product Officer, before then going into the regions, starting with Europe and Asia Pacific with Mathias Wiklund, who is the Chief Sales Officer, and then the North America bit with Monil Malhotra, President of North America and Digital Solutions Leader. Following these presentations, we will have a Q&A session and a short break. After the break, we'll continue with our after-market operations presented by Katri Piirtola, Chief Aftermarket Officer, together with Monil Malhotra. After that, we'll have a look at the operational excellence by Sanna Otava, Chief Operating Officer, before then moving on to the financials with Jukka Kainulainen, CFO. At the end, we'll open the floor for a final Q&A, before the closing words by Bhasker Kaushal. With that, let's get started.
Once again, welcome, and now let me hand over to Kempower's CEO, Bhasker Kaushal.
Well, thank you, Calle, good afternoon, everyone. Welcome to Kempower's 2026 Capital Markets Day, thanks to everyone who's joining on the webcast as well. Well, today is a very exciting and an important day for us. It's for the first time that I'm standing here as the CEO of Kempower presenting the Capital Markets Day, as is for a number of the management team members that are joining here today as well. We will, for the first time, lay out in full as this management team, where we are taking Kempower over the next five years. Reflecting back, a little more than five years back, Kempower was a Finnish startup that made one big bet, that DC fast charging can be better done with a distributed architecture. 35,000 chargers in the ground in 60+ countries, 350 customers later, that's a good start.
That's a great start and a solid foundation. The world has changed. The EV transition is still going on, but at a different pace. Investors are scrutinizing every euro and every dollar that they're putting to work. Our customers expect more from us. They expect us to be more than just a hardware provider. They expect support through the lifecycle for a decade or more. In light of that, today is about Kempower 2.0. 1.0 was about building the foundation, 2.0 is about scaling Kempower to be a global leader in DC fast charging. It's the same mission, sharper playbook, and a higher bar for us.
By the end of the day today, I want you to leave with one conviction, that in what is one of the fastest and the biggest infrastructure rollouts in our generation, Kempower is the company that will lead DC fast charging and will deliver compounding results. Let's get started. Let me start with why we exist. It's a simple mission, accelerate the electric mobility transition. It hasn't changed since day one, and it won't change. We're here in Oslo, which is giving you a glimpse of the future. 95%+ vehicles that are being sold are electric vehicle. Look at the chargers. Really good penetration of chargers. That mission is going to translate all over the world. Our vision and ambition. Our ambition is to be a top-three global leader in DC fast charging, trusted by customers and built to compound.
These phrases are important for us. Trusted by customers because market leadership starts with building great trust and partnership with our customers. Built to compound because we're a company that aspires to deliver compounding results quarter over quarter, year over year, not just one heroic quarter over year. Everything that we do is focused on this mission and vision. Let me start with why do we think Kempower 2.0 is an exciting and a credible investment? Four points that you will hear consistently today. Number one, we're in an attractive, fast-growing market. The total addressable market doubles from roughly four and a half billion EUR to EUR 10+ billion over the next five years. Second, we're a proven leader. We're a leader in distributed architecture. We have the industry's strongest combination of hardware, software, services.
Third is we're expanding from just what we were previously a hardware manufacturer to more of a full lifecycle solution provider. We'll talk more about that. Fourth, we're going from growth at all costs to a focus on sustained profitable growth. We target to deliver 15%-25% revenue compound annual growth rate over the next five years and 10%-15% EBIT margin. This range is intentional. It's calibrated to different market scenarios. It's not just internal hedging. We'll talk about that. Just a quick overview of who we are. Kempower in 2025, EUR 251 million in revenues, 48% in gross margins. We've got over 800 employees headquartered in Finland, 60 plus countries where our chargers are, 35,000 chargers, as I mentioned.
In terms of revenue composition, a little over 80% of our sales come from Europe, 12% from North America, and 7% from Asia-Pacific. In terms of the mix, 95% of our sales in 2025 came from hardware and only 5% from aftermarket. That's an important number to remember. We will come back to that is one of the transformations that we are going to be driving. We have been recognized as one of the fastest-growing companies in Europe by Financial Times 1000. What are we focused on? We're 100% focused on DC fast charging, not AC. We're a focus play. We are not a portfolio play. DC charging is where the differentiation is. That's where the margin lies. AC is commoditized.
In particular in D.C., we're focused on DC ultra-fast charging, 150 kW or more, which allows you to go from, for most vehicles, to go from 10% state of charge to 80% or more in about 30 minutes. That's important. How do we do this? We do this with a full-stack product, not just hardware. It's a full-stack product. On the hardware front, we have the distributed architecture, which really means a modular power unit plus different kinds of dispensers that can adapt to different use cases that you see, passenger cars, trucks, buses, ports, off-highway. These are all different segments that are all growing fast, we can address this through one hardware platform. Plus software. We have ChargEye. You're going to hear more about that today. It's our software as a service.
It's a charging platform that allows customers to use it to operate, maintain, and optimize their charging operations. This combination of hardware plus software, we believe drives a lot of stickiness with our customers. Now, we are an ESG leader, and we've delivered 1.7 billion kWh of energy through Kempower chargers. You look at the tons avoided, 1.4 million tons of CO2 avoided. I was born and raised in Delhi. I've seen the impact of emissions firsthand. That's the kind of environmental impact that we need to drive throughout the world today. We've been validated by independent rating and standards bodies. We like to call it gold, green, and trusted. We're EcoVadis Gold. That puts us in the top 5% of companies globally based on benchmarks such as environment, labor, procurement. The Nasdaq has awarded us the Green Equity Designation.
That means for companies that have revenues of more than 50% focused on green. Ours is 100%, and that was the second year running. I say trusted. On cybersecurity, we're one of the few players that has ISO 27001 certification. Charging is increasingly becoming critical infrastructure. That is a major requirement for our customers now when they're looking for procurement. Next, our view on the DC fast charging market. It's a EUR 4.5 billion market today, growing to over EUR 10 billion over the next five years. Quick point, this excludes China. We believe China is a captive market for Chinese suppliers. We've deliberately excluded that from our estimates here. This includes North America, Europe, and Asia-Pacific. You look at the scenarios, the EUR 10 billion is the base scenario, which we believe is kind of the midpoint, about 18% compound annual growth rate for the market.
The low and the high, that could be about 10%-25%, I'll talk about what drives that in a second. What's important here to know is that we built our value creation model and our targets to work across all three scenarios, I'll talk about that. Look, fundamentally, I want to address the market reset directly. This market has changed. Fundamentally, the DC fast charging market is driven by battery electric vehicle adoption. The forecast for battery electric vehicle adoption a few years back were unrealistic, right? Those numbers were too optimistic. Over the last two years or over the last year, the projections are much more realistic. That reset is 40%. What you saw in 2023, that old projection of 16 million BEVs projected on the road in 2030, that's come down by 40%.
A large majority of that reset is driven by North America, as you see, and that's driven by some of the policy shift in North America. If you look over on the right-hand side, even after this reset, the battery electric vehicle market is still set to roughly triple. 4 million new BEVs sold in 2025. From that baseline, we still expect 9 to 10 million passenger cars being sold in 2030. Much more realistic, but very much possible and very much in line with what we see today. On commercial vehicles, the same story, light, medium, heavy duty. We see the take rates a little bit lower than passenger cars. It's obviously dependent on the availability of vehicles at the right price point. You look at those BEV share ranges as a percent of the total new vehicle sales, passenger cars estimated to be 30%-35%.
Europe leading with much higher and North America with about half that range over the next five years. Commercial vehicles at 25%-30%. Now that recalibration was painful, but we've recalibrated our targets to this new estimate of the BEV market. Bottom line, it was the market normalization that has reset our targets, not our ambition level as a company. What is supporting this market? It's four things. Total cost of ownership advantage of the battery electric vehicles, it's regulations, it's public and private funding, and energy security as a security imperative. When you look at BEVs, the economics of battery electric vehicles are more advantaged versus internal combustion engines for most use cases now. That's what's driving the adoption. It's the economics. It is no longer a subsidy-driven story. CO2. OEMs have to electrify. They have no choice.
This is a regulatory requirement in Europe. The governments and the regulators, they're not reversing course on that. Public and private funding. There's ample amount of public and private funding. You look at all the announcements over the last couple of years, we believe there's EUR 10 plus billion in funding that has been announced over the last two years. Our customers, they're well-capitalized. Lastly, the recent war in the Middle East has just shown how volatile the oil prices can be. Importantly, it's highlighted a risk for countries and companies, that that kind of an oil price shock can totally destabilize their environments. Countries and companies are now accelerating their electrification targets to de-risk themselves, and that's very important to know. Shifting to the DC fast charging market. Let's look at our position there. Today, we are a top five global player.
We humbly believe we are the leader in distributed charging. That's where the market is converging, by the way. You look at a couple of peers that are ahead of us in terms of install base. We've ranked them by install base here. They're concentrated in the all-in-one hardware, the station charger. It's a different architecture, it's a different business model. We and our customers, we believe that Kempower has the strongest combination of the hardware, of the software, and the services platform. We are the only pure-play, publicly traded DC fast charging player. Great time to own DC fast charging exposure. All right. As we turn the page, how will we be evolving? How will we be different? Kempower 2.0. 1.0 was about building the platform. 2.0 is about scaling the platform profitably.
There are three key areas where we will evolve, and we will focus on these. First is geographic focus, second is the business model, and third is the operating model and the focus. Geography, we are looking to become a much more balanced global player, growing from more than 80% exposure in Europe to being much more balanced across the key geographies, North America, Europe, and Asia Pacific. Business model. Today, only 5% of our revenues come from aftermarket. We are looking to become much more balanced with materially higher share of recurring revenues that can come often at higher margins and much better predictability. Third, in terms of operating focus, we were a startup. We were in scale-up mode, heavy scale-up mode, and our focus was building the platform. Here we shift to a more profitable, sustained, profitable growth focus.
Really, we are evolving from a regional hardware-focused player to a global lifecycle solution provider that is going to be disciplined to drive sustained profitable growth. To achieve these visions and our targets that we've set, how will we do it? There's four pillars and one foundational enabler. These four pillars are what we do, and the enabler, winning culture and team, is how we do it at scale. We'll talk a little bit about it, and you're going to see that throughout the course of the day today and hear about these presentations. Win with customers. We just don't win orders. We build partnerships with our customers. We earn their trust every day, and we build partnerships. The second pillar, technology leadership through innovation. This is a very competitive market.
For us to differentiate, it starts with technology and starts with the full product stack, not just hardware. Third, lifecycle solutions. Allows us to play both defense and offense. This is where our customers are increasingly looking for solutions across the whole lifecycle, not just treat us as a hardware vendor and see us later. Operational excellence, something that we pride ourselves in and that is something that we will talk about is asset-light, productivity-driven operations. What you see here as the foundational enabler is the winning culture and team. This is something that I am really proud of and really we focus on these things, high-performance model, disciplined execution, startup speed, industry. These are not just slogans. This is how we operate. This is how we operate and behave every day. Starting with winning with customers. Look, we win when our customers win in their respective markets.
That's our belief. We call this motto Winning with Customers. Today, we're trusted by leading operators across segments and regions. You look at some of the names here on this page, Circle K has a CPO in retail, EV Realty, fleet trucks, Thomas Bus, DP World in ports, the largest port operator. These are some marquee names. Overall, we have 350+ customers globally and 135+ customers acquired over the last two years. Our top 25 accounts account for about 50% of our revenues. We have deep relationships and deep multi-account, multi-site relationships there as well. Last point on this page, 75% of our install base is doing public charging for cars, 25% is fleet. We're diversified in terms of our focus and also diversified in terms of the revenue streams that we see.
We are not dependent just on public charging or just on fleet. One of the things that I have enjoyed the most about our teams since I joined is how customer-centric our teams are. Can often be just a slogan. Really our teams get to the heart of what the customers need to win in their markets, truly understanding it and solving the problems of our customers. There's different customer segments. They have different needs. You look at the CPOs, every day, they're focused on revenue maximization, revenue per site per day. The fleets, they're focused on total cost of ownership over the life cycle, by the way. How do we do it? We do it through one platform. For the CPOs, our distributed architecture, you've got a limited grid connection.
You want to be able to give that, to maximize that to the maximum number of cars or vehicles available, and our distributed architecture does that very well. By the way, it's scalable. As you grow, as you see your demand grow, you can scale. For fleet operators, they're buying on total cost of ownership. You look at things like what's important to them. It's uptime, the redundancy in our system. It's uptime, it's SLA-driven, service level-driven contracts. Again, the distributed architecture helps the depot economics. They want telematics integrations with their fleet management systems. We do that. Same hardware, same platform, two different value propositions that we are serving. That's the power of the distributed platform. Mathias and Monil will share real customer examples of why we win and why this kind of value is translated to our customers. Next on technology.
I say innovation is in Kempower's DNA, right? The industry is shifting from what was basic charging to now more advanced charging today to really intelligent energy management. Our focus, and it's also going from peak power. Everybody was fixated on, "Hey, 200 kW, 400 kW, 1,000, 1 MW." It's no longer about just nameplate power. It's about total cost of ownership. You look at that, what does that drive? Our focus is both TCO and intelligence. We differentiate with our hardware, looking at cost per kilowatt hour. On the intelligence, we want to be able to drive outcomes for our customers. We'll talk more about that, cloud, AI-driven uptime, energy, predictive service. These are the kind of things that drive value to our customers. We will focus on that. Now we're investing in R&D.
25% of our total workflows is focused on R&D and product. We have a unique and a patented IP portfolio across power conversion as well as the electricity delivery through the cable support mechanisms and the dynamic charging. That is really our secret sauce. We'll talk a little bit more about that. We're also constantly looking around the corner for what is the next technology, and that's where we partner with universities. Universities such as LUT in Finland and North Carolina State University in the U.S., the FREEDM Systems Center there to again get access to the next-generation technology. Jussi is going to talk about this in more detail overall our technology view. Look, I have to say a word on AI. AI is not just a roadmap item or a slogan for us. We have 20+ agents that we're deploying at scale today.
The way we look at AI is through three lenses. That AI helps us deliver differentiation, product differentiation, so how we infuse AI into that and the dynamic charging algorithms that we talked about. Look, we've been working on those algorithms over the last five years. Now we are infusing AI. How do we extend our lead, extend our advantage? It's not just going to be hardware, it's those algorithms. That's the differentiation bit. Growth, we focus on revenue expansion via the ChargEye platform. Monil Malhotra is going to speak about that and share a couple of examples of how we're doing that. Productivity. Apply AI to everyday tasks. It's become one of my favorite trends, for sure, and I know for a lot of folks around our company as well. There's real examples of how that is driving productivity.
For software developers, 8+ hours per FTE per week reduced. Order handling, we're getting 20%+ efficiencies in our order handling, and we're just scratching the surface. So these are real things and numbers that we're delivering through AI. Next, lifecycle solutions. As our install base grows and customers increasingly want solutions across the lifecycle, we have a great opportunity to build a recurring revenue business. Four offerings that we have, parts, service contracts, modernization and upgrades, and software, each comes with their different revenue and margin profile. Katri Piirtola is going to talk about that in more detail. Look, it's fundamentally driven by a growing install base, 2.5x plus. 2.5 is the exact sort of absolute lower end of the estimate, quite frankly. You look at much higher opportunity for us to grow our install base. Very conservative estimate there.
Every charger, every unit that we sell is an aftermarket revenue stream for the next decade or more. Every charger is also connected to our ChargEye cloud in real time. Every charger turns into a data feed. We know when to service that equipment, when to upgrade that equipment, what to upsell to our customers next time before a customer ever asks us. This recurring revenue stream, as we build it out, it's hard work. We will build it out. This provides much better predictability, much higher margin, and also improves our earnings quality. Operational excellence, I mentioned we pride ourselves on that, leading industry performance around things like order to delivery, lead time, configure to order. Got a scalable model. When we think about the investments that we've made in factory capacity and equipment, we're 3x ready. Labor obviously scales with volume.
We're very focused on productivity. Earlier this year, I shared that we started a unit cost improvement program. Just this year, our target is to get EUR 10+ million productivity savings. We do see price pressure. Jukka's going to talk about that, right? This is a price-sensitive market, we're going to our unit cost reduction and our productivity program to offset that. We will also stay disciplined on operational expenses, I'll talk about that in a second here. Sanna will go through this in much more detail in a later presentation. Overall, look, our goal is to build a balanced business. Different regions are at different stages in their EV adoption curve, right? As these regions get ready for their inflection points, we aim to be there, we're already there. We have a well-defined approach for each region. Nordics, we lead that today.
Our goal is to protect and deepen our position, and defend our share. Rest of Europe, we're gaining share. We continue to acquire new customers, gain share of wallet. North America, Monil will talk about. That's a share gain story. Whatever the market does, we're going to outpace the market. We're already doing that today. We can continue to do that. In Asia Pacific, it's a very competitive market. We scale selectively. We pick and choose our markets, pick and choose our customers, and it's going to be a targeted entry with local partners. How does all of this come together to deliver value for our shareholders? I said our goal is to deliver sustained profitable growth and compounding value. We've got a four-part formula. Disciplined above-market growth. We gain share, but margin protected and balanced global expansion.
On the life cycle front, I talked about materially higher aftermarket revenues. Third, operating profit expansion, the operating leverage that we get and the aftermarket mix and productivity help us there. Disciplined selective reinvestment. We're still investing selectively in areas that are tied to our strategic priorities. What we will target to the OpEx growth, we're targeting that to be less than half of what the revenue growth rate is. That is, we're going to stay disciplined on that. We will not let OpEx grow ahead of our revenues. As we execute this strategy and this value creation model, what are we targeting? In terms of revenues, we're targeting 15%-25% compound annual growth rate through 2030. 10%-15% in operative EBIT by 2030. The revenue range, it's tied to the market scenarios. It is not internal hedging, right?
We've seen this market be dynamic. It can go up and down. In a slow market, our approach is we are targeting the lower end of the range, so that's what that means. In a base market, we are calibrated to the midpoint well. In an accelerated market, we go to the upper end. Look, our end goal is sustained profitable growth on the operative EBIT. The way we are going to do that is also use the reinvestment as a lever. It's tighter in a slow market. It's balanced in a base market, and we lean into investments as we grow faster than on the top end of the. No dividends on the short term as we focus on reinvestments, and we think that drives more value, at least in the near term, but we reassess that.
We don't think we're sandbagging or promising the moonshot with these scenarios. We're just giving you a very honest, conditional architecture, right? It's honest, it's credible, and it's conditional to what the market does. All right. Coming down to the home stretch here. Look, strategy targets are easy, right? Execution is what differentiates real companies. What I'm really proud of is what we're building in terms of the culture here. We've already got a really solid base, a startup orientation, bias for action, fast decision-making, and we're building on that. All of this with a view that we can lead and we can deliver results for years and decades to come. We're building high performance into the fabric of our company. It starts with clarity of role, ensuring people know what they're accountable for, right?
Investing in developing talent, giving them the tools and the coaching that they need to grow and deliver their results. When they achieve their results, raise the performance bar, get to the next level. Disciplined execution at startup speed. This is all about discipline without losing the speed. I've talked about how we'll be disciplined on capital allocation. We drive this through KPIs. We have KPIs and targets. This strategy that we talked about, it's been translated into very specific initiatives. We have targets, we have dashboards. We operationalize it. We don't wait for a year. We review this every month. We're taking action. It's accountability, it's transparency top to bottom, and it's speed of decision-making. I do humbly believe that we've got the best team in the industry. 800-plus people delivering results, right? 60+ nationalities, very diverse, very global team already.
40%+ female representation in the leadership. Look, we're a team of industrial technology and electrification leaders. We're all assembled on that same mission that I talked about. Sanna , Jussi, Jukka have been around since the early days. You see Monil joined Emerson leading large software businesses. Katri joined aftermarket from KONE and Alstom heritage. You look at Mathias, Chief Sales Officer, ABB, Universal Robots, and Hanne from Wallbox. We've got a good mix of depth and experience in this leadership team to deliver what I talked about. All right. In closing, let me leave you with why we believe Kempower 2.0 is a very exciting and a credible investment. Four things to remember. We're an attractive, fast-growing market. It's going to double or estimated to double over the next five years. Second, we're a proven leader.
Third, look, we're evolving from this regional hardware focus to more of a global and a life cycle focus. From a profitability standpoint, we're focused on discipline, on sustained profitable growth. These are not aspirations. This is how we run the company, right? We believe Kempower is built to lead and built to deliver sustained compounding results, and we're very excited about it. The rest of the day, we'll be talking about these themes. Now I will turn it over to Calle, for the rest of the presentation. Thank you.
Thank you, Bhasker, for setting the scene and outlining the strategy. Now let's turn to how this strategy is enabled by our technology. Let me welcome Jussi Vanhanen, Chief Product Officer to the stage.
All right. Welcome to this back to the future experience for Norway and Oslo. Excited to be here. I will talk today about the technology and product leadership, and why this matter is dear to me, of course, because Bhasker is paying for me for it. Also, I'm so excited to work with our customers, and that's the key for our innovation, at how we understand the customer needs and how we create the value for our customers. This is story I try to highlight you today. Before we go to the topic, I would like to know you a little bit better. Put the hands up that who are the EV drivers. It's quite good. Almost everyone. Hands down. Who is the wannabe EV driver? Rest of the crowd. Great. Awesome. I know my audience now, I can like Good to see you.
You know what I'm talking about now. All right. Let's go back to the past from the future that 3 years ago that we had at Capital Market Day. We were talking about the industry, that where the industry is. It was about the big powers, like Bhasker said, that who makes the biggest charger, who can make the DC charger, and most important, who can deliver the DC charger. It was about the static systems, peak powers, EUR per kilowatt and all that kind of old-fashioned way to look at it. Kempower came to the market. We started to define the charging for something better. We analyzed what is the charging business, what is the user experience at the sites, and how we can bring something better. We created the intelligent platform with the full stack of hardware, software, and also services that time.
Of course, there, we are getting stronger all the time. Now, it's already there, the strategy was to create the customer value and collaborate deeply with our customers. Kempower 2.0, we go stronger to that direction. We go for total cost of ownership and optimizing all the elements of the TCO calculation there, what I'm stating. You guys, you know the equation quite well. Minimizing the CapEx, how to minimize the hardware cost compared to energy the customers are charging, how to make a faster deployment with the less stuff, higher efficiencies, plan it OpEx. That's what all the customers say, that they want to plan their operations. They want to plan their EBIT. Maximum uptime that they earn the money in all the time. We go for the euro per kilowatt hour. That's the transition for the TCO. Let's still look at the evolution of Kempower.
2019, when we came to the market, the very fundamental things that we were bringing to the market was our own in-house power electronics and our power source. Crucial that it was designed in Finland, made in Finland architecture. Number two was the charging controls. We created the charging controls from the beginning that we knew exactly what was happening between car battery and our charger. Number three, we were introducing the ChargEye already there six, seven years ago. That we started to accumulate the data and information and the customer experience at our site. 2020, that was the time we were bringing the distributed system, really disrupted the market. I think all of you still remember that crazy Bjørn Nyland video that make us very famous. If you haven't seen it, I will send it to all of you from the YouTube.
Same time, we were bringing the station charger, all-in-one, charger that many competitors have also. There is specific use cases for that place, but still, the bread and butter, the main differentiation was a distributed architecture. 2020, we came to North America with full compliance of North American standards. 2024, we made the total redesign of the power electronics, change for silicon carbide technology, and boosting the efficiency of our charger. Still looks the same from outside, inside, totally new. Now last year, this year, we are bringing the MCS, 1.2 MW and 12 plugs. That was the first in the industry charging 1.2 MW for the electric vehicle. It was an amazing journey and still continue. Same time when we developed the hardware stack, you see the amazing AI-driven ChargEye that has been disrupting the business.
Now, the latest developments is there, the Kempower EMS, the site analytics, and the state of health analysis of the fleets. This is where we are at the moment. This is the strongest distributed DC charging system in the market. With the 50 to 1.2 MW power unit, satellite systems up to 12 plugs. Here is the standard satellite, the MCS satellite, still the station charger, and ChargEye with the service cloud, energy cloud, and charging cloud. Let's still dig in a little bit the Kempower differentiation. That five elements where really the Kempower differentiates from the competition and creates a better customer value. Number one, distributed. Number two, dynamic. Number three, modular. Four, intelligent. Number five, the best user experience. All the EV drivers know that how good the Kempower chargers are. Let's go one by one. Distributed.
It really means that we have a centralized power unit, and we distribute the cable management and user interface away from the power electronics. Here you see that the MCS satellite charging the truck, the satellite system there charging the cars, and then even the depot overhead charging. One power electronics, multiple use cases. This makes the site layout design so much easier and flexible placement of the charging points, reducing the space. You know how much the space cost, especially in the parking lots. It's more than the apartments and flat prices, especially in the places like California, New York, and the center of Oslo. 50% of space savings and the maximizing the grid utilization. When you look at the stories of EV charging, that what is holding us back to have more rollout?
It's the limitations of the grid connection and how fast the grids are given for the different sites. Kempower system is maximizing the utilization of the grid connection, and with the same grid connection, we can charge even 30% more energy than the traditional system. Three unique values of the distributed systems. Dynamic power sharing. I had here a real site example for you, 12 plugs, 1.2 MW. I was presenting for our team in rehearsals, and the guy said that, "Jussi, this is way too complicated, that there is so much happening in your site, I don't know where you are there in your story." I made this very simplified version now. The real version of this story is in the YouTube animation. We can link you to that one also. Probably you have seen it. Total 600 kW capacity. That's one basic charger.
We look at the utilization a little bit. Let's imagine this is a calm and easy Tuesday morning in Kempower site. First, Mathias comes with the Volvo there, Volvo XC40. It's slightly slow charging. Mathias comes early, and he's the first one because safety is so important for Mathias. Safety comes first, so does Mathias. Mathias is the early bird. Slowly charging. What happens next? Sanna comes with the BMW. Sanna knows that the most efficient charging, you charge from 10% to 80%. Sanna comes there with the 11% because he's a little bit saving. You see that the same power is now cumulated to the same power unit. Sanna is getting that full power. He's in and out very fast. Next, Sanna's power curve is going down already. What happens at that point? Monil comes in with the Tesla Model S.
Monil is reading the mantra for himself. "This is going to be Monil Malhotra's EV charging success story. I'm going to make it. I'm going to charge high powers, and I will do it now. Let's do this, Jussi." Monil comes, bang, 250 kilowatt. Monil goes there, takes a Facebook photo, and sits to the car, the window open. All you see there, Mathias is getting power, powers are getting down. Sanna power rating a little bit lower already. Sanna is getting ready. Still, Monil is getting the full power. What happens next is the ambulance is coming to the site. This site is agreed that there is an emergency priority for police and ambulances. We allocate most of the power to the emergency charging. These are the most advanced features in the Kempower dynamic power sharing.
What this really means for our customers and as a user experience, again, high power utilization because of the using the same power electronics here, 30% higher utilization. Improved system availability because of the modular structure, leading to 99% or better uptime. Intelligent charging priorities. One priority can be emergency, one can be Gold Card member. It depends on the CPO, how they want to do that. That was the dynamic power sharing. Let's move on. Modular and scalable. One platform, this story I told you already. One simple power electronics platform, with the different dispensers, we vary the user experience and the usage in different segments. Public charging, it's typically those satellite systems. Bus and fleet, this is a pantograph solution. Port, this is now MCS, high power, truck fleet is overhead charging.
Four strong use cases. It's great to show these tomorrow you in a real life. We will visit all these sites, and we can dig into this functionality better. Intelligent. 100% of all the charging and all the chargers and charging sessions are connected to the ChargEye cloud system from the beginning. Service cloud, energy cloud, and operation cloud. This allows to optimize the service quality, optimizing the energy usage, and assuring the mission-critical operations. These examples are here, the AI-driven features that we have created to our system. Monil will have a deep dive on these. I let you rest of that for Monil's presentation. 100% intelligent, 100% connected. Powerful. Number five, the user experience loved by EV drivers. You know that. Most of you are the EV drivers. You know what a relief it is to arrive to Kempower site.
These are the EV chargers designed by EV drivers. 100% of our own fleet is electric. We need to charge our cars at the sites all the time to learn that what works and what doesn't. One that the users they really love is our UI. This is the typical picture giving a prediction of the charging times. This is the ChargEye feature. Then follow on mobile. You can beam the UI with you. I think you have been using that. This, if you want to try, that example works. It takes you to the demo site. Also, the cable management with the reach. That all the users we have been interviewing and been testing our system, they say that they love it. It's compact, it's light, and you have a beautiful reach with the cable.
Those two features, it makes a very differentiating product that the EV drivers love. Because the drivers, they love the Kempower sites, the Kempower sites are busier. That's why our customers, they make better profits. Those were the five differentiating features of Kempower system. Let's look a little bit about the future, at where we are going next. What we try and innovating at the moment. Number one, megawatt charging. I will show you a couple examples there. Number two, we go more for the advanced satellite structures, go for the microgrids with the energy storage integrations, automated charging, wireless. Same time, we continue investing on the digital services, predictive maintenance, advertisement, charge site for ports, microgrid energy management, and self-optimizing depot charging. Let's dig in a few of the most important topics here. At the MCS truck charging.
This example of the truck charging site last year, this was the first world premiere for one megawatt charging in real life. There, the Kempower really pioneering and differentiating from the competition. On the right-hand side, a similar site from the U.S., California, at the first MCS installation on American soil. I think this proves how much ahead the Kempower is in the technology. Why I'm talking about the MCS when we have done that? Is there a room for innovation still? I think this is just the beginning what will happen. MCS standard is now ready. This is concretizing the roadmap now to go forward. These chargers are developed together with the leading OEMs. Few examples in the picture here. Good collaboration. We know that the trucks are now ready for the rollout.
During the break, we were discussing about this already a little bit. We can continue. A great journey ahead of us. Number one, the microgrid installations. These are the few site examples where the battery energy storage is connected to charger. Some sites are integrated even with the renewables. This is the direction where the industry is going. The Kempower is top of the innovation there. We are getting in the end of my presentation. I still have couple slides to show you. The next one is our next-generation satellite that we will introduce to the market next autumn. This is just a sneak peek for you, so keep the information just for you. That we are bringing the next-generation satellite system, and the crazy thing when we started the project was that how you can make something that is almost perfect, even better.
The project was perfecting the perfect. We were developing this together with the leading CPOs in Europe and in the U.S. They say they need a faster installation and deployment. It's one of the key features here. It's even easier. I'm so proud of the user interface that we are bringing to the market now. All new. It's communicating better, so much cleaner and nicer. Even that I love the existing one. I'm so excited when we are getting this out. Number three, great branding options for our customers. The total branding of the hardware and full branding of the UI also. The CPOs are so excited about the product. If you come to the exhibitions in Europe and U.S. next autumn, you can see and touch and try this product. All right. Let's go to the summary of my presentation.
Really, the Kempower differentiation and how we keep ahead of our competition is that we are innovating together with our customers, and we deliver more value to our customers. That's what we study every day in our relationship with them, and this is where we want to perfect our operations. Bhasker Kaushal was talking about the customer centricity of the Kempower. Better uptime, 99%. This is a industry-leading uptime with the modular structure we have. 100% intelligent. This will give huge opportunities for our digital services and aftersales market, where Katri Piirtola will, in a few minutes here, will begin. As a conclusion, we can give up to 20% better TCO for our customers in a full stack of CapEx, OpEx, high efficiency. That was all what I wanted to say today for you. Let's continue the break and enjoy the show. Thank you so much.
Thank you, Jussi. With that, let's continue with how we are executing across our regions. First, let's start with Europe and Asia Pacific. Let me hand over to Chief Sales Officer, Mathias Wiklund.
Thank you, Calle. Thank you, Bhasker as well, and thank you, Jussi, for highlighting my safe Volvo driving when I'm charging. My name is Mathias Wiklund. I'm going to talk a little bit about winning with customers. Before I do that, I think it is important to think about where you are. You're actually in Norway, and I think Norway is really good at a lot of things, and I'm not talking about winter sports now. Norway is really the front runner, the future when it comes to electrification. Look at renewables, 98% is actually coming from renewables here when it comes to the energy. 96% of all cars, passenger cars in Norway, 25 are EVs. That's quite impressive. Their fleet on passenger cars is over 50% EVs. Think about that when you go out and look, that every second car will be an EV.
This is the only market where that has happened. What I think we're seeing, and I think that's an important thing because we have certain things that is moving in the world today. Look at the oil prices, how that is changing. Look at how the Germans now are googling EVs about three times more than they did before the war. There is a transition that is happening here, and that, of course, is going to help us on our transition into making charging a bigger business and a more interesting thing for the future as well. I think there's two things I want to show with this slide, and I think this is always good when you're working in sales. There is challenges, and there are opportunities. Really when I'm looking at this is a huge opportunity.
When you look at these numbers, looking from a market point of view, you will see the electrical cars are going to grow by 3 x to about 7 or 8 million from 2.6. You will see the fleet side, the truck sides and buses and those will grow as well 5 x. Then you know that a bus or a truck will require more DC charging than the passenger car does because the factor is almost 1 to 1 vehicle, 1 charger. This is a very good market to be in. Looking at that as well, you're going to have a EUR 3 billion increase in the overall market. That means Kempower can grow with this in Europe, EUR 3 billion. Of course, we can fight for the other EUR 3 billion, where we will take market shares from our competitors.
The other thing that is good with this slide, and I think is important as well, is actually the tailwind we have. You will see that there is funding of over EUR 3 billion here as well trying to drive the electrification journey to our benefit. I already mentioned increased oil prices where people are strategic focused on energy. How do we keep costs low? With the oil and the diesel or gasoline going as it's going today, this becomes a savior in some way. In Europe, you also have the emission regulations. You're trying to drive those down, and you also have cultural values. Those are going to play into our opportunities in making sure that we're driving the market for the better. If I then look at Kempower. Kempower started in Finland. We've been very strong in Nordics.
We're in Norway now. You see these things. Done a very good job here. Our challenge and our transition, which already started, is to make sure we're doing this journey as well in Central Europe and South of Europe. You can see here our sales numbers. You can see that we're actually starting our expansion in South and Central. Those markets are very big. We haven't done our homework from the past. It's time that we're doing it today. We have a lot of benefits with us here. We have a very strong Nordic situation. Our challenge is to make sure that we maintain our Nordic stronghold. We need to make sure we're also expanding in the South and Central. You have some big countries there where we have the right products. We've been learning. We've been evolving as well.
Talk about the DACH market. Talk about Benelux, France, Spain, Italy, U.K. Enormous potential. That's what you want when you are in sales. You want potential, and we have huge potentials. Kempower has another thing that is really a benefit for us. I will show you a slide later on, but we're talking about a lot of big customers, and those customers are global. A lot of them are actually playing on the global scale. Our job is to make sure we do a better job working going forward and playing with them where they want to play. Bhasker was also showing on one of his slides that we have added 135 new customers to our portfolio during two years' time. That's something we need to continue doing. You should never be satisfied with the amount of eggs you have in the basket.
Always make sure you add more because that is something that will pay off in the long run. The EV business is going up and down when it comes to potential. We just need to make sure we have as many players as possible because we can't predict who will be winners and who will be not. If we get most of them in our portfolio as a customer, the potential is there. Sales can't do this on their own. I think this is an important thing. I think you listened to Jussi. He was talking about the benefits with our product, numerous, both in public and in fleet. It's also another journey that is going to be important for us to make sure that we are giving the customer the best of the best experience.
It really becomes important now when we're talking fleet business big time, and that's the service, the lifetime product support. Katri will talk about that one. If you look at this, my intention is not to go through all of these customers, so you can rest assured on that one. I think it's important to see where Kempower is. If you look at this one, you will see we're in public charging, we're in fleet. We're working on the one selling the energy. We're working also on the retailing side on the public. Both are extremely important, making sure that we give them the best of the best experience. You can see global brands here, you can see European brands, you might see local brands, but they are big players and a lot of them will help on our continued journey.
If you're looking on the fleet side, you have trucks and you have logistic customers there. A lot of them really on a global basis. I'm not even able to show some of them because we're not allowed to put their names up there. They are big players. Bus, very much a big thing for Kempower at the moment, will continue being a big thing. Now ports is kicking in as well, where we're signing some of the contracts lately with APM Terminals and so on, where they will go quite heavily on becoming green. This is requiring mega charging big time. This is really an interesting field for all of us, where we're talking huge deployment of energy. Whatever you do, I think it's important to think about what customer wants and listening to the customers and hearing the customers.
Instead of me doing all the talking here today, I thought it would make sense to bring in one of the customers in public charging to talk about what is key for them and why they are choosing Kempower on their journey. If we start the video.
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Good. Zunder is one of the bigger players operating out of Spain, Portugal, and France, and I think I could see some of their, or they could mention some of their benefits they see with Kempower. I think there's one thing they're not talking about, which is also essential, and that is to make sure it is easy for customers coming to their site and doing charging. The second one is that things are working when they're coming there. Those are really two essential things as well, and I think that's what we're giving them with our software, hardware, and also our service. Talked about the CPO. The fleet operators are also an important thing for us going forward, and who can talk better about fleets than the fleet themselves?
Therefore, we have a short video from Tper in Bologna talking about fleet operations and why they choose Kempower. Let's play the next video. Thank you.
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Okay. If you're looking at Kempower here, I think this is just an important thing to understand, that this is a company that is transporting 150 million passengers per year. Their buses are rolling 44 million km. They are depending on making sure that people are moving from A to B. They can't afford being down. I think here is where Kempower offers additional value in the form of ChargEye, where you will actually be sure that the bus is charged in the morning, that the bus is leaving to the customer in the morning and picking the people up on the road. Because if you don't, you're going to pay EUR 15,000 every time the bus doesn't leave. That can be quite expensive. With the ChargEye software, you're safe.
You know that the charging is done, it's okay on all of your buses, because some of these bus depots, they can be enormous, to be honest with you. Imagine if the bus doesn't go, and using the software from Kempower, securing that they are leaving, there is other additional benefits with ChargEye. You can actually reduce your cost of energy as well. You can actually control your cost because you're charging at an optimal time because the prices always varies. If I'm looking at that into Europe, what is it that we're trying to do? Just concluding that one. Well, I don't think it's rocket science, it's quite simple and safe in some way. We need to make sure we're keeping Nordics. We're not going to drop Nordics.
We're going to maintain being the leader here, because Nordic is also the front runner, and we're learning a lot from it. We need to move to Central and South Europe, because that's where there is huge potential at the moment. They are far behind on the deployment of electrical vehicles, and fleet is coming as well. We need to make sure that we are expanding our presence in those areas. Last but not least, we have big customers, and we're also going to have new customers that we need to make sure we're continuing working with. The big customers will help us in Europe, but they will also help us outside of Europe. We shouldn't forget outside of Europe. That's why we're going to talk a little bit about Asia-Pacific as well.
If you look at Asia-Pacific, I think there is two things that is important here. If you looked at the market growth in Europe, well, this is much bigger potential, huge growth potential, 29% CAGR from EUR 0.5 billion-EUR 1.8 billion. What I think is really the best here is we are already there and having people operating. Yes, they're small numbers, but they're 7% of our order intake from 2025. It will grow. One of the most important things when you want to enter a new market is actually to be there, to have the presence. We have that. What we need to do here, we need to be selective in some way. It's not just about running everywhere and hoping we're going to be successful. We're actually trying to surgically doing this business in a very structured way.
We will also have the opportunities of big customers coming in and starting their electrification journey in Asia as well, where we already do business with them in Europe. That will, of course, give us an opportunity to make an active decision. Do we follow them? Do we actively put people there, or do we use our partner network that we are building up in Asia? There is no way we can do this on our own. We need the partners. With partners, our access and reachability is tremendously bigger. Of course, we need to make sure we're doing this cost-efficient as well, which we always need to do to secure that the distributed system has a good fit and the TCO is in line with what the customer want. I already talked about that we're there, and yes, we are.
We've been in Australia for a while, New Zealand as well. We have established a lot of people there. We have people in there. We have opened up Malaysia. We're opening India, Singapore, and Thailand as well, and you can see some of the references. Of course, we will get more reference there. All of these markets have a huge potential for us, not always in the same area, because if you look at Singapore, might be the biggest opportunity coming through ports. We're actually heavily working with the port side from Europe on a global basis.
The ports will also help us to enter some of these areas, which I think is a nice thing here, how things work together in the end, how you tie the whole package, and we're going to be able to expand in the whole of Asia. You look at this picture again with all of these blue-chip big companies. There is a lot of these companies that you had on the first list that is actually also operating in Asia. We haven't accessed this enough. We haven't worked this enough. This is what we need to do. This is what I'm talking about, opportunities. It's for us to make sure we become the global player with these players as well. I thought it could make sense to listen also to a partner, because when I'm talking about Asia, partner is a vital part of our strategy.
To make sure we cover such a big area, we need to have the partners there. We actually ask one of our partners to give the view why Kempower. If you play the video, please.
It's an exciting industry. It's something that we enjoy doing. It's not something you just, let's say, install and walk away from. You've got to be there, you've got to service it, you've got to be available 24/7 to take calls in case things go wrong or down, all that sort of things. It's a strong service mentality that'll all lead into good, fruitful long-term relationships that'll strengthen all companies. We've done enough study on all of the other different products we've worked on and serviced, maintained, pulled out different product to know what works and what doesn't. Kempower product works very well in the application. It's reliable, it's trustworthy, it's easy to service. Spare parts are relatively common across all of the product. It just makes a lot of sense. They're brilliant. I'm not just saying that because I'm in a Kempower interview.
The local Kempower team have been really good. We engage with them from the early opportunity identification, understanding the right product, getting them to even meet with a customer to make sure the customer knows that he's got the OEM also talking. We're showing that we're in there for the long term. It's been great to be able to get that global reach as well, and quite quickly. It can be really challenging just trying to get the information you need to get back to the customer on time, and with Kempower, that isn't an issue.
Thank you, Paul. What I really think is important when it comes to partner business is to figure out this win-win. How do we make them stronger, and they make us stronger? I think with this example here with ChargeHub, that's what we're talking about. We have figured out, and we have a very effective partner program where you have trust, transparency, and they have the reach and opportunity to expand out of Australia, which they actually done. Now they're also in U.K., which I think is a fascinating thing with this one, that we can actually work together and we can expand our business. This is my last slide. Let me conclude this with this one. Once again, talking about Asia-Pacific. It's a huge market for us.
We are very small player there, but we are there, and we have the opportunity to actually, in a very surgical way, making sure that we keep focus, but also finding with the blue-chip manufacturers or companies coming there, opportunities to expand should we want to. Not to be forgotten, really making sure that we use the partners. If we do this, we will be very successful in Asia as well in Europe. With that, I want to thank from me. Thank you. Calle.
Thank you, Mathias, for the presentation. Now let's turn to North America. Let me welcome Monil Malhotra, President of North America and Digital Solutions Leader to the stage.
All right. Good afternoon. Good to be here. I'm going to talk about the North America business, but I'll start with, Jussi had made fun of my Tesla Model S and my charging characteristics, but I'll tell you this. I joined Kempower about 16 months ago, so it's been almost a year and a half, and before that, I was with a Fortune 200 global company for almost 20 years. It was a big decision to make the move, and the biggest decision was if I join Kempower, is this company really committed to North America? Is it just going to be a hobby of the day, or is there true commitment to grow the North America business in the long term? During the entire interview and selection process, it was very clear that this was a key strategic initiative for Kempower.
The first sign was just how rigorous the interview process was, by the way. I think there were nine or 10 sets of interviews. There was personality assessments. There were psychological tests. My wife still jokes. She says, "After all that, they still selected you?" Anyway. At least I think she jokes. It was really clear that North America is one of the key focus areas for the company. Today I can stand up here and say North America is one of the largest, if not the largest growth engine that this company has today, and it has us really excited about the future. As you've heard, we entered the North American market back in 2022.
In 2023, the site selection was made, our headquarters for North America, the city was Durham in the state of North Carolina. This site also houses our manufacturing hub for all of North America. In 2024, we shipped our first products made from this facility to our customers in North America. In 2025, we saw rapid expansion, both from an order intake standpoint as well as a revenue standpoint, which greatly accelerated our market share growth in this world area. Super exciting. I joined, like I said, in February of 2025. I consider myself really lucky because when I joined, we already had a state-of-the-art manufacturing facility in place. We had a best-in-class team of over 100 people already in place. We were working closely with customers in this world area. Again, talk about being at the right place at the right time.
Really lucky to have been there. Since entering the market, 2022 to 2025, our orders have grown north of 150%. At the same time, our revenue has grown almost 170%, and I'm talking on an annual basis. I don't have to tell you that this means we've far outpaced the market growth and picked up market share. We're very proud of what we've done in these three years. More exciting is the wins that we've had in these three years, they are extremely well-diversified. From a geographic standpoint, we've got wins from Canada in the north all the way down to Texas in the south. We've grown our install base on the East Coast, all the way from New York down to Florida. Of course, we have significant install base in the rapidly growing West Coast from an electrification standpoint. Super excited.
From a segment standpoint, we've got significant wins both in the public charging space with passenger vehicles. We've got wins in behind-the-fence fleet charging. Now Mathias talked about the port segment, which is another rapidly growing area, and we've got some strategic wins in North America in the port segment as well. As excited and as proud as we are of our growth over the past three years, our funnel of opportunities that we have has us even more excited about the next three years and beyond. When I talk about the next three years and beyond or the next five years, here's a glimpse into what the market is projected to do. Bhasker shared some of these numbers in his presentation.
If you look at the market from a BEV registration standpoint, we have an 18% projected annual growth rate for passenger vehicles from 2025 to 2030. Over the same timeframe, commercial vehicles are expected to grow at a 50% annual clip. That is pretty significant. I understand that the number of commercial electric vehicles on the road today are fairly limited, but that number is projected to grow exponentially over the next five years. That's pretty exciting. From a EUR standpoint, that means a EUR 700 million market in 2025 is projected to reach about EUR 2.5 billion by 2030 with an annual growth rate of 30%. There are a lot of industries that would kill to have a market growth rate of 30%.
Even after the reset, even after the adjustments to the market size, a 30% annual growth rate is still pretty aggressive and pretty significant. By 2030, this market of EUR 2.5 billion gets even more diversified and gets even more spread between the CPO segment, the fleet segment, and the port segment. A lot of good things in play. I understand I cannot talk about North America without talking at least about some of the funding and incentives in place. There's a lot of noise about that. The facts are NEVI funding's been reactivated in North America, in the U.S., which means there's another $2 billion of spend that's going to occur over the next few years. Multiple states have state-level funding available for electrification, and this funding is pretty significant.
This list of states includes California, New York, Colorado, Illinois, and the list goes on and on. We've got the port segment, where we have almost $3 billion of EPA funding that's allocated specifically for electrification. Once again, big market growing at a pretty nice rate with plenty of tailwinds in place. All segments looking pretty solid for the next few years. In addition to the funding, in addition to these growth drivers, here are some other facts that really help us understand the full picture and make us feel really optimistic about the future. The demand for charging today in North America, especially in the U.S., far exceeds what the current charging infrastructure can supply. If you look at the ratio of electric vehicles per DC fast charger, that ratio in the U.S. today is pretty high, and high is not good.
There's still a lot of room, there's a lot of opportunity for us to meet the electrification needs of the vehicles that are just currently on the road. I'm not even talking about all the electric vehicles, the 2 million that are added to the road every year. These are just the current vehicles that are on the road today that need to be charged. Huge potential on that front. Speaking of new cars being added, in 2026, there's over 30 new models of EVs that are projected to be added to the road. Prices of EVs continues to ramp down. The price gap between internal combustion engine cars and EVs, that gap is starting to close. The energy density of batteries continues to increase, which means cars now have a longer range, which in a country like the U.S. is really important.
You've got those tailwinds, you've all read about the high production capacity that is already set for the heavy-duty trucks that are set to be released in 2026. The market's really looking forward to that. Tons of things happening there. From an environmental standpoint, if you look at the port segment, it's no secret that the ports contribute significantly to greenhouse gas emissions globally. The same is true in North America. If we can reduce, by electrification, if we can reduce these emissions in the ports, it's going to have a huge impact on the carbon footprint reduction. This is really important to all port operators, public sector, private sector. We've reached a point where the economics and mandates don't necessarily have to be in conflict.
The electrification of ports is starting to make economic sense because the total cost of ownership at these ports for electric equipment is starting to reduce by the day. Again, if you look at the drivers in place today, plus the gap in the supply versus demand, there's a lot of reason for us to be optimistic in North America. You saw this slide in terms of, you see shared some of this, from a North America standpoint, we understand for us, okay, you've got the drivers in place, you've got the funding in place, and there's all these tailwinds. For us to be successful, we have to have sustainable competitive differentiators in place, things that separate us from the pack. We have to meet the most urgent needs of our customers today.
In North America, one of the most pressing needs for our customers is making sure that their sites are ready to meet the peak power demand of tomorrow. Meeting the peak demand of tomorrow cannot come at the expense of today's utilization. Sites must have high utilization today so that metrics such as revenue and profitability continue to be favorable. This is where things like flexibility, scalability, modularity, intelligence become absolutely critical needs for the charging ecosystem. This is exactly what we bring to the table. With our hardware architecture, with our software, with our intelligence, we can improve utilization of sites by 30%, reduce real estate requirements because of our small hardware footprint, reduce TCO by, again, optimizing the power that's drawn from the grid. The list goes on and on. Over 99% uptime. These are all key features and requirements of our customers today.
Last but not the least, we manufacture in North America. We have a local supply chain, which ensures, once again, that we meet the needs of the market, both from a design as well as a compliance standpoint. Here are a couple of examples that I'll talk about, which shows how well the market has accepted these differentiators. These are two customers. First one is Blink, a major player in the electrification space. Operate in multiple countries. They've got over 100,000 chargers in the ground globally. When they were selecting a DC fast charging supplier, they had three main criteria. Number one, who can provide the highest uptime across their high-utilization, dense, urban sites? Who can provide the intelligence to reduce the amount of power that they draw from the grid?
Who can provide a true scalable and modular architecture that keeps pace with their aggressive site rollout plan? Same concept applied to OnPoint, another major player in the EV space. They're setting up charging infrastructure in the northwestern part of the U.S., and their criteria are very similar. Who can provide the maximum reliability in these high-utilization sites? Who can provide the best-in-class service capabilities, so that should something go wrong, there's a fast response provided to these sites based on the needs? Who can once again provide the maximum power throughput from the grid to these vehicles? We are really proud, we are really humbled that players like these are choosing Kempower after they go through all these criteria. It really validates all the investment that we've made in technology over the past several years. This didn't happen overnight.
There's a lot of work that's gone behind this, and again, it's really pleasing, it's really humbling to see our customers accept this and give us this feedback. I can stand up here all day and tell you how good our technology is, how good our hardware is, but I think it's really important for us, very impactful to hear straight from our customers. You're going to hear from Josh Turner, CEO of PowerUp, and they are setting up charging infrastructure throughout the eastern part of the U.S. Let's see what Josh has to say.
Hi, I'm Josh Turner with PowerUp America. We are a southeast-based charge point operator. As a company, we stand for safety, reliability, and having a unique user experience. That reliability piece, we really hung on our manufacturer's shoulders. Successful charging long-term is a charging station that's going to be reliable with a partner that's going to be in business. Many companies can provide a charger that will last for two, three years, but if you're making that investment into the long term, the driver needs to show up and have a unit that's available, backed by a company that has parts and warranties and everything in place.
With Kempower, you're getting a legacy of reliability, and that's why we feel like Kempower is promoting the future of the industry because they're allowing us to have a partner that we know will be available as long as we are.
That was great. This is another one that we'll play. This is Will Quinn with EV Realty. EV Realty is setting up charging infrastructure for trucks through the high-density freight corridors across all of California. They just opened up a site that has 76 chargers at this one site, including two megawatt chargers. Huge site, provides nine megawatts of power to our customers. One of the biggest sites that you will see globally. Let's see what Will has to say.
Hi, this is Will Quinn with EV Realty. We're building out electric truck charging hubs in California. It's really important that the product is reliable, durable, has amazing resiliency and uptime. What's really stood out in working with Kempower is not only the reliability, but also the serviceability of the units. Our trucks never even notice the difference. If anything happens to a charger, the dispensers are still receiving power dynamically. Yeah, I'd say an example of where Kempower has made a difference for us is just the caliber of the North American team.
This is a true partnership that we have with Kempower. The team has been first rate in their support in designing the site from the early days to installing and commissioning the site side by side with us, and then ongoing support, service, training, responsiveness. That is not a given in this industry and gives me confidence in our ability to scale the partnership going forward.
Wow. Wasn't that great to hear straight from our customers? We understand, as we go forward, for us to be successful, we must continue to listen to the market, must continue to listen to what our customers have to say, because this is still a fairly new market that's evolving really rapidly. Listening to customers is what's enabled us to sign over 120 new customers over the last three years. It's what's enabled us to grow at 170% annual growth rate from a revenue standpoint. It's what's enabled us to create and maintain our competitive differentiators. We are so excited for the future because we're going to team up with market leaders in our quest to be stewards of the electrification journey in North America. Again, absolute pleasure to be here, and thank you again. Thanks all.
Thank you, Monil.
Now we'll open the floor for questions on the presentation so far. May I ask Bhasker, Jussi, Monil, Mathias to join me on the stage? We'll be taking questions from the audience, so if you have a question, please raise your hand and wait for the microphone to be handed to you. Maybe you can come a bit. Yeah, slide over there.
All right.
All right. All right, great. I see we have a few questions. Maybe we'll start there at the back.
Yes, hello, this is Tom Skogman from DNB Carnegie. I realize you exclude China as a market, but can you open up a bit, what is the price level of these products in China compared to in Europe and why would they not come to Europe and perhaps the U.S. longer term?
Bhaskar, maybe you want to.
Look, frankly, we don't operate in the China market, so the price and the market intelligence is limited there. One safely can assume that the pricing and the costing is a little bit lower. Look, Chinese players are coming to the European market. There's a whole host of reasons why we're still able to out-compete all the things that we've talked about. There's not one single thing, it's the package. It starts with the technology, having a differentiated technology. You could say, okay, hey, they can be there with the Chinese players. Really working with the customers, understanding the problems, having a full stack product, then solving their needs, the aftermarket. I think that whole package, the cybersecurity, the critical infrastructure, those are things that are omni-important for our customers today.
We see Chinese players in the market, and we're able to still compete well and win because this is not just a market. This is a maturing market where whatever we are hearing is it's not just focused on cost. It was, till a few years back, the cheapest charger won. Not anymore. It's the TCO. Customers are getting increasingly more sophisticated. The bids that we see is based on total cost of ownership, no longer cost per kilowatt upfront.
Great. More questions?
Hello, this is Nikko Ruokangas from SEB. Thank you for the presentations so far. I could continue a bit on what you answered on price per kilowatt. You discussed about changing the approach to focus on kilowatt hours, not kilowatts, and an intelligent platform approach. What does that mean to you from an R&D point of view? Does it require a lot of you, or does it mean that you just package it differently, price it differently, and so on?
Jussi, do you want to start?
When you analyze the site TCOs, now customer TCOs becomes very interesting, because then you really can calculate where the cost lies during the life cycle. First is to analyze, and then start actions to develop towards it. Upfront cost, the CapEx and the OpEx, then later. This calculation, it gives us a tool to make the compromises. R&D is always like how you compromise that, where to put the pressure and where to put the development. How much we invest on developing the efficiency or how much we develop the reliability of the product. The TCO calculations gives us a way forward to do the development and how to make the compromises. This has been the approach from the beginning. It's not a big change in the direction, but it's more for the accuracy and precision how we are targeting our development.
It's a good question. Thank you.
Okay. It's a great question. Perhaps just building on Jussi. Look, Jussi walked through the total cost of ownership. It's the CapEx and then OpEx. OpEx further breaks down. You look at energy efficiency and then maintenance and repair-related costs and other operating costs around that. From your question on how do we tie this to investment, we tie this to our priority areas. From a technology perspective, hardware, software is an area of importance, and that's why we are investing in it. Jukka will talk about some of the average. We invest 7.5% of our sales into R&D. It's not just to maintain today, it's also to ensure that we can continue to lead in the future. The services piece is important from a repair maintenance perspective. We invest in that to be able to optimize that part of the equation as well.
Yeah, understand. Thanks. I guess that also kind of changes how you approach the sales pitch for new clients. I'd like to then ask about the market modeling you have been doing. Appreciate the scenarios you are showing base high, low. Could you describe a bit that what are these high-low scenarios leaning? What kind of scenarios will happen if this is the case, the high market or the low market? Is it relying on subsidies or something else? Maybe a bit comments on what kind of a pricing environment are you expecting?
Yeah. Bhasker maybe.
I can take that.
Yeah.
Just to unpack that question, number one, market scenarios, and then second, kind of the pricing. Look, number one, on the market scenarios, as I said, it's not a subsidy-driven market anymore. That's our strong belief. That's what we see. It's an economics-driven market now. Total cost of ownership wins, BEV wins across most use cases. We're seeing that even in commercial vehicles, heavy duty, that's where the electric mile is cheaper than the gas mile. Not a subsidy-driven story anymore. We look at the range. We've modeled the range. The base case is what we have a high confidence on, from a market standpoint. That would be what we say, "Hey, the market grows about 17%-18%." We're saying above market growth is our focus. We, in our base case, we're saying middle of our range is 20%.
That's one way to look at our ranges. From a pricing standpoint, look, it is a highly competitive market. Pricing pressure is there. As I said, I think the customers are getting increasingly more sophisticated on the total cost of ownership. That's coming into the equation. Pricing is becoming more nuanced. It's not just the upfront price of the charger. That is still the case, but it's more nuanced. It is a competitive market, and Sanna will talk a little bit about productivity, how we use that as a lever, aftermarket mix as a lever to be able to offset and mitigate some of the erosion that we see on price.
All right. You are including price erosion there?
Yeah, absolutely. That is just the nature of the industry, and we have been including, I think Jukka was there in the 2023 Capital Markets Day. I think we shared some price erosion numbers and then some similar modeling that we have.
Thank you. That's helpful. One last from me, and especially focused now on Europe. You talked about that you want to grow with the customers, but if you think about growth in Europe, so does it lean more on growing with the existing customers or getting new ones?
Mathias ?
Yeah, no, I think it's a base of both. I think we have existing customers. You can see those we're showing. I think we're going to grow with them. Of course, the job in sales is always to capture new customers, securing that you have a broader base of customers overall. I think that's what I'm talking about, moving our presence and our focus into some of these areas as well. We will find new customers, but of course, some of the old ones will be there on the journey as well.
It's not about just looking for new. You need to protect what you have, and you need to drive for the new ones as well.
All right, great. Thank you.
Thank you. I think we have a question there in the middle.
Hi. Mirko from Danske Bank. Concerning your market size estimates, how much of that is expected to arise from aftermarket operations?
Bhaskar.
Our growth rates? Yeah, look, Jukka will share a bit more around the breakdown of our growth and how we see versus Kempower average. Aftermarket will be above average, above our average. Let's say if we're at the midpoint of the estimate, we expect aftermarket to be actually amongst the highest in terms of our portfolio, in terms of the mix. Highest growth average in aftermarket. Again, it's driven by the install base, and then, as we said, increasingly we see opportunities with the customers across those four offerings, which is great segue into Katri's presentation after the break.
Thank you. I think we have time for one more question, so maybe here in the front, please.
Yes. Thank you very much. Paul de Froment, Stifel. Two questions on ChargEye. The first one is, do you plan to include maintenance in your ChargEye offer? The second question, how do you plan to compete with other software providers, like Virta, Ampeco, or Monta, for example? Thank you.
Monil, please.
I can take that.
As far as whether we include maintenance or software, you will see in this presentation after the break, software is a big piece of our aftermarket positioning. We've got maintenance, diagnostics, service, as well as all the software capabilities all into tiered packages that we put together. Yes, it's part of it. Software helps us do the diagnostics and the maintenance a lot better, cost-effective, and at much better value for our customers. As far as the competition, right now we're focused on our hardware that we've got. We've got a huge install base. We have a very high ceiling in terms of making sure that our software is on all of our hardware and providing the maximum value. Right now we're focused on our hardware and the software offerings on it.
All right, thank you. Unfortunately, that's the time we have for Q&A now. We have more Q&A coming later on during the day. Thank you for the questions for now. We'll take a short break, 15 minutes, and let's continue at 3:00 P.M. sharp local time. Thank you. All right, guys. Welcome back, everyone. I hope you had a refreshing break. Let's continue with our aftermarket operations, which is an increasingly important part of our business. This is a joint presentation by Katri Piirtola, Chief Aftermarket Officer, and Monil Malhotra, President of North America and Digital Solutions Leader. First, let's start with Katri. Katri is the latest addition to our global executive team. Without further ado, let me hand over to Katri for the start.
Thank you, Calle. Good afternoon, everyone. Pleasure to be here in Oslo, actually, especially because of all of you in the room and the ones online. As Calle mentioned, I'm the fresh one in the company, I actually hope that you all feel very fresh after the break, because our topic is so exciting, so good to have some energy for that. How I look about aftermarket is that one could say that it's a little bit like the little brother. As you know, also in the real life, the little brothers, at some point, they grow. They grow stronger, they grow bigger. That's why it's right now a really exciting time to discuss about aftermarket.
My plan is to share you first on the current situation, where we are, about some of the trends we see, and of course, how we plan to address the situation. Then finally, my colleague, Monil, will share then some of the exciting things that is happening in the software space. Great. Let's get started. Starting on the kind of current situation where we are, so the first great news is that we have an aftermarket business. Actually, the second thing is that it's been growing greatly in the past years. At the same time, yes, it's fair to say it's really the little brother. Last year, it was only 5% out of the total company revenue. Then on the other hand, if we look Q1, it was already 7%. It is growing.
On the other hand, we have quite a nice base of service team available. We have our in-house service teams. We work through our partners. How our model works is that we have the deep technical expertise in-house, present in over 20 countries. Whereas, the scaling arm of the field service, that comes through our carefully selected partners. They are present in over 60 countries. Quite an impressive team ready to do service for Kempower equipment. Thirdly, I would like to highlight in the current situation, when thinking of aftermarket, our digital capabilities. Already Jussi mentioned on ChargEye. ChargEye is an important enabler when it comes to aftermarket. Especially because when you do think about it, what is really excellent in it is that all our equipment are connected 100%.
It's inbuilt connectivity that enables the discussion and of course, the data that will help us then to have the insights and help the customers throughout the aftermarket. Of course, we have quite a lot of data already and more coming to learn and use that forward. I would say that nice current position to start with. Next, let's have a quick look on some of the trends that impact us. I would share there that, of course, there are many things impacting the aftermarket, but if we think about a couple. First of all, like Jussi mentioned, earlier, customers were very much after the power, more kilowatts, more power, bigger chargers.
What we really see now is that as the charging levels are already on good levels, so it has so much more turned to the outcomes and to the customers to have the confidence in the operations, how to ensure that the uptime is there. This kind of transition is, of course, opening much more the thinking towards aftermarket. Secondly, we have, of course, the growing installed base. Bhasker was talking about it, and this is important for us, of course, as a total for Kempower. As we also know that normally the chargers are around two to three years in warranty, so it again is working as the installed base grows. We will see growingly the base for aftermarket growing in conjunction as the electric transition continues.
Thirdly, if we look at aftermarket in our industry, given the newness of the industry, the focus has been more on hardware for good reasons. Now as maturing in the industry, also it becomes more and more evident the impact of aftermarket. When we do look at similar industries, we know that the aftermarket plays a sizable role when thinking about the whole lifetime spent of an equipment and the whole lifetime of it. What is of course kind of what changes the logic is that hardware is one-time, whereas aftermarket is recurring, and often also of higher margin. I think these kind of premises make it a exciting moment for aftermarket and exciting situation to look after. Now you must be already thinking that, "Hey, how are we then at Kempower? How do we want to address aftermarket?" It's very simple.
We want to ensure that every step of the life cycle, we are there to best support the customers. That's how we want to approach it. We have here kind of put a simple illustration about in blue, you see what are the steps that the customers are taking throughout their life cycle of operations. With orange, there are kind of the aspects of how we, as Kempower, want to bring the customer-centric approach and support our customers throughout the different steps of the lifetime. Let me share you a couple of examples. When we think about aftermarket, for us, it does not start when the equipment is in operations. No. It actually starts well before that, already in product development.
Like Jussi was sharing about the modular approaches, how we are thinking already since product development, how to make the equipment easy to install, how to make them easy to service. We are thinking this throughout the lifetime and really taking that thinking throughout the time. Of course, when it comes then to the times of commissioning, again, there, we want to be there to make it easy to commissioning and get started on the operations either at site or then remotely. Of course, then when it comes to the time of operations, either during warranty or then, of course, after warranty, our approach is that we can really bring, with our data, a lot of insights to the customer so that they can operate in the best possible way their equipment. Based on the data insights that we have, make the right decisions.
Also, as you know, with our charging equipment, uptime is over 99%, and that's the way how we want to keep it. It is very important that we can really secure the confidence to the operations. Of course, at some point of lifetime, like we also heard in one of the videos from the customers, they realized that they wanted to expand the power at their site. That's when we have the modernization opportunities and upgrade opportunities, and we are again ready to support and deliver the best solutions for our customers. Of course, even great equipment, they will at some point have end of life. Again, we want to be the partner to support customers to make that, the support and the right help to also in the end of life and to get, of course, to the next thing.
What is critical in all of our thinking is really is the data, the connectivity, the inbuilt connectivity and what that enables and how we see that with that, we can help the customers throughout the different stages in the aftermarket to make a great experience. Let's next have a look quickly on what are the practical offering elements that we today have and how we are supporting aftermarket. We have basically four items. We have the spare parts, we have the service contracts, we have the modernizations, and then software. Let me share a bit of each. Spare parts, of course, it's very clear. Our focus is to ensure that whenever there is something where spare parts is needed, that we can really assure to get them quickly to customer to ensure, again, the uptime.
We want to keep that high uptime because that's critical for our customers. Majority of our modules have proprietary IP. Of course, that's where the intelligence is. We also want to offer the one-stop shop to the customers and have, of course, for the tiered parts, but also offer refurbished, have the sustainability opportunities there to help the customers. Secondly, our service contracts. There, it's really important about how we are able to use the data insights to support the customers so that they are able to have the high performance. If we look at today, given the inbuilt connectivity, and so there is a lot that can be done remotely, making it very efficient for the customers. Actually, it's almost all of the cases can be diagnosed remotely.
Whereas then, of course, a very small part which will then actually need where the actual many of the fixing can also be done remotely. Of course, there is below 10% of the cases where the on-site field repair is also needed. In a way, I think it's important to see that how we want to develop forward on the service agreements and take that based, again, on the data and support that. Thirdly, quickly mentioned already on the modernizations as an approach. Depending on the customer needs, there is, depending what the data proposes, we can do different opportunities, power expansions, retrofit with payment terminals, with the idea that there is no need to scrap the whole equipment, but we can modernize parts of it and extend the lifetime of the equipment for the benefits of customer.
Lastly, our software, which has been already mentioned a couple of times, ChargEye. That's of course an excellent base that we have there, where we have three cloud-based solutions, energy, operations, and service, which are there to optimize the fleet cost, operations efficiency. Again, that is something where we can really use the data and the insights for the best use cases of the customers. Of course, all of these are aftermarket side of the offering, so changing the mindset towards more of the recurring revenues. This is, of course, now the theory. Why don't I next share you couple of practical examples from customers, because that maybe gives you a light that what we really, how they are coming to life, these aftermarket solutions. Let's start with a case example on modernization.
In this case, we have our CPO customer, Powerdot, which is a large CPO operating in the Southern European countries. What happened was that our data was showing that some of the plugs were, in a way, underperforming. They were below average in operations. The reason was that these plugs had the old plug standard, CHAdeMO. What was done was that it was upgraded to the new standard, CCS2. By doing that, it was not only a great news for our customer, CPO, that they were getting more revenue per plug, but also their customers notice it as through the customer satisfaction, fewer queues, quicker charging times. This way, it's a really win-win case. Even more, it's a sustainable case as well.
No need to scrap the whole equipment, just modernize the parts that is needed. The second case is about the service contracts. In this case, we have a major global retail customer that we are working with. They have such a situation that, yes, they provide a customer charging as a service, but they are very far with their own fleet electrification. Their fleet is dependent or is electrified. As you know, retail customers, it's about minutes. The fleet needs to be there on time when so needed, so it cannot come there one hour later. It's critical that the equipment are fully charged. What we are doing with this customer is that we are providing them both their fleet operations service as well as the customer service. This way we are guaranteeing them a certain service level. Of course, for them it's easy.
They know it's a one-shop stop where they are getting the support. When you do think about it, who is better to service the Kempower equipment than us? These were a couple of examples to give you a little bit flavor to what is happening in the aftermarket site. Next, I would like to give the word to Monil, who will shed the light what's happening in software. Thank you.
All right. Thank you, Katri. Good afternoon again. How our software perfectly fits in the value creation journey across the entire life cycle. I have to start by saying, don't get me wrong, we love our hardware. We really do. The modularity, the scalability, the flexibility. As Katri said, the serviceability. These are all differentiators for us in the marketplace. We truly believe that our software on top of our hardware is what's going to cement our long-term sustainable differentiators. It's extremely critical for us, really important for us. In case you haven't heard, our software is called ChargEye. Okay, very serious group. Our software is called ChargEye, and this is the central system that monitors all aspects of the charging ecosystem.
All the way from the user interface and the user experience to the grid variables, site variables, fleet management, and the list goes on and on. This is all made possible by a very solid, dedicated team of 50+ software engineers that we have in the organization. We have a 3 Tiered software solutions offering for our customers, which I'll talk about in a minute. What ChargEye does, based on our current install base, we store about 120 TB of data on an annual basis. What all that means, I'm not really sure. Here's what I do know, what that data does. It means this software processes all the data that it has so that our customers don't have to process that data. ChargEye provides actionable information to the right people at the right time so that the right decisions can be made. Extremely critical.
Those days in this market space are gone of just a hardware-only business or hardware-only offering. Software is a must. I'm not talking just generic software loaded on hardware. With our three-tiered software approach, we feel we have now segmented the software market in the EV charging space. This is that space above the hardware, and this tiered offering approach allows us to create and deliver customized, tailor-made solutions for our customers across all segments. If I dive a little deeper into these segments, if you look at Tier 1, which is the basic offering, ChargEye Basic offers our customers diagnostic and monitoring capabilities. It provides information about performance of a site or a vehicle. Again, really critical to monitor variables such as uptime, et cetera. If you look at Tier 2, now we kick it up a notch. The advanced version performs advanced analytics.
I've always debated why you need the word advanced in front of analytics, but that's the way it is in the industry. The advanced analytics provides operational intelligence to our customers. What that means is our customers can now look at site patterns. What are the utilization patterns? What kind of vehicles come into a site? What types of batteries come in? Which allows our customers to make their operations even more efficient. In addition, it provides reports on compliance. If there are certain compliance, certain requirements that have to be met to maximize incentives or grants or funds, the software ensures that there are documented reports that show the compliance with those requirements. Then you've got the ChargEye Pro, which now gets into specific vehicle scheduling requirements. In a fleet segment, Mathias referred to this.
In a fleet segment, extremely critical to ensure 100% on-time vehicle readiness so that there are no costs incurred because of delays. ChargEye Pro also performs energy optimization or power optimization. Once again, this optimization is based on a number of variables. What are the energy rates? What's the time of charge? What's the dwell time of a vehicle? What are the power requirements of a vehicle? All these variables are taken into account so our customers can optimize their operations once again. Again, a very solid set of solutions that works across all segments and all types of customers. Again, in keeping with the theme, I'll give a couple examples of the two customers also where ChargEye is in action. This is a customer in the U.K., a CPO that charges thousands of vehicles, and they have over 1,000 plugs connected with ChargEye.
They use the monitoring and diagnostic features of ChargEye Basic, and what that's done for them is ensure that their sites operate at over 99% uptime. It's also ensured that their maintenance costs have been significantly reduced by reducing the number of trips to the site by over 50%. Think about all the trips to site, all the maintenance costs, all gone because of all these advanced diagnostics and monitoring. Tremendous value add for our customers. Here's another example of a customer using ChargEye Pro. Over 300 plugs connected via ChargEye, and in this particular case, the customer has used ChargEye Pro.
They've already got the monitoring and the diagnostic dashboards, but now they make sure that all of the vehicles are ready when they need to be, so that there are no penalties, there are no opportunity costs, there are no costs related to delays because a vehicle wasn't ready at the right time. The power optimization feature of ChargEye Pro for this customer, what did that do for them? They shifted a bunch of charging of vehicles during peak hours to off-peak hours. In euros, that means they saved to the tune of EUR 1 million on an annual basis, just in energy cost. Once again, a tremendous example of how the software leads to TCO reduction for our customers, both, again, across segments and across various tiers of offering.
I'll just wrap up by saying, listening to everything on the service side, the time for digitally enabled aftermarket portfolio has arrived, and this is what is going to provide value generation through the entire life cycle. At Kempower, we're ready to scale, and we, again, very passionately believe that our data-centric and software-centric approach is going to continue to differentiate us into the future. Thank you so much, and I'll hand it back to Calle here.
Thank you, Monil. Thank you, Katri, as well. Now we'll turn to operational excellence with Sanna Otava, Chief Operating Officer. Sanna, please, the floor is yours.
Hello, you all, and thanks, Calle. Great to be here. My topic is operational excellence, and that's pretty natural because I think I'm the lucky one because I have been part of the Kempower story from the very beginning. Past over six years, I've been building the operations, leading the operations. My plan today, that first we recap where we are today. What is our manufacturing footprint? What is our operation model? After that, I will deep dive that how our operational excellence is our competitive advantage. What are the key elements in that? Let's start. Where we are today. Our manufacturing footprint. Started from Finland. Main factories in Finland, European factories. We are capable to produce all the products for all the markets, and we are near R&D, so capable to introduce new products fast enough to the markets.
Like Monil Malhotra told, then North America, factories scaling fast. Same technology, same processes that used in Finland, we are using in the North America, and of course, products targeting to local markets and scaling. The Asia Pacific. We do not have own factories in Asia. However, increasing amount of activities in that area. We are sourcing components for rest of the factories, and also we are screening potential partners that how in the future, who is doing the contract manufacturing, so that we keep that open the opportunity that we are producing locally for local markets, screening that at the moment. That's our footprint at the moment. Thinking about the model. Model is what we are doing in-house, what we are outsourcing.
From the very beginning, we created our operation model so that we are capable to scale, and we are flexible. Why flexible? Because you know, like Jussi told, we have very strong own IP, own product design from the hardware, electronics point of view as well. Therefore, you need to think from the operation point of view, manufacturing point of view, how fast, how capable you are to introducing the new features, new products to the markets. That's why what we do in-house, we are focusing final assembly. We are doing so that based on the customer orders, we are configurating our products, doing the assembly, testing, and shipments. That's our focus. Rest of the manufacturing chain, those early phases are outsourced to our supply chain. We are scaling through the supply chain. For example, supply chain, they are producing based on our design.
They are doing metal parts, plastic parts, and also electronics. Assembling those printed circuit boards based on our design. We are not focusing that kind of production methods. We are outsourcing that. Combination of this, what we are keeping in-house, what we are outsourcing, this is resulting that asset-light model, what we are referring here today a lot. This is our existing setup. The topic. Operational excellence, our competitive advantage. We have four focus areas where we want to be the best in class. Next, I will deep dive each and every these four areas. First one is delivery excellence, second one is productivity, huge importance nowadays. Third one is the quality. Quality includes sustainability, cybersecurity, the full umbrella. The fourth one is how we are capable to scale. Let's start from that first one, delivery excellence.
Delivery excellence, it's hugely important from the operation point of view that we understand what our customers are requesting from us. Now thinking our customers, they are building charging infrastructure, so they are running project, building projects. We are delivering products, and we don't want to impact negatively. If we have delays, of course, there's negative impact to customers' building project. That's why that on-time delivery is the main KPI we are measuring, main metrics, because when we receive the customer order, then we will tell, "This will be the ship by date." This will be the date we will do the shipment of the products. That promise we want to keep, and that we are measuring. We have been very successful with that metrics, and we will be in the future as well.
One base element why we have succeed with that on-time deliveries, thinking the history, there was a COVID virus situation, some problems in the global logistics, and so on. How we manage, even if we have faced quite many times there's a lack of materials, components, or whatsoever. We have this, like I told earlier, that we have European factories, then we have North America factories, and we use exactly the same processes, technology, products. We have this kind of regional manufacturer redundancy in place. If something happens in one factory, we are capable to transfer the customer orders another factories. That's helping a lot in this kind of environment when the market is totally new, technology is new, and all the politics, what is happening. That's the key from the customer point of view.
Another topic which is important when we think our customers and operations is the flexibility. That's again coming that new technology, new markets, new product features. Customers want that we can optimize enough and provide enough short lead times so that they can really decide what they are needing. Providing enough short lead times and capable to even pilot with the customers. From the operational point of view, it's not only mass production. We need to be capable to deliver products, produce products even for the piloting, so that the good cooperation with the R&D and customers is possible. That's the flexibility from the operational point of view. The second element is that cost excellence and productivity.
If you won't remember anything else from my presentation, please remember this, because I see that it's hugely important that how good you can run your productivity is that how you good you can keep your market position today and also in the future. There very good question earlier that how about the price pressure? It's related to that. How to do it? How we keep our productivity so that we are improving, and that we can really say that there's cost excellence in place? Starting point is R&D, because when you do the design, then you create the costs. That's why it's as important as it's to innovate new features, new products, as important it is to innovate costs. Design to cost.
Understand that when you are designing, for example, new layout, how can you do it so that you are using less components? When you are finding solution using less components, less costs, less unit costs. When you are using less components, you are not compromising the quality because less components means also that then there's less potential failures. There's one additional advantage. If you are capable to design solution using less components, then you are also using less materials, and actually from the sustainability point of view, less emissions. There's a lot of advantage if you really are capable to do that cost innovations as well. Starting from the design, you create the costs. When the design is ready, the sourcing, procurement, purchasing.
One key element, how you can keep your sourcing, achieving those targets, what we have set, is the should-cost method. I want to highlight the should-cost method because it's hugely important that you know when you take your product structure, all the components, you need to know what is the correct price level for each and every component. Should costing is analyzing that what is the correct market price for each and every components or each and every production technologies when you are doing outsourcing for the design. Understanding. When you have that knowledge, then you are much more capable to go negotiations with the suppliers. When you are adding new suppliers, you really know that you are not paying overprice. That's why highlighting should costing. Nowadays, should costing is much more easier thanks those AI tools, what we are using.
Very practical way to run the costs. The last one, not the least one, those two first phases are mainly related to materials. Of course, when we think product costs, there are labor cost as well. Own operations, you need to optimize that as well. Own operations, how to do it? It always that constant improvement, how you optimize your methods, operation methods, those labor works, and all the material flows. Here as well, traditionally, we have used that adding automation, adding digital tooling, but nowadays, it's very common that using more and more AI agent. Having AI agent network, so that either those agents are taking care of certain tasks, behalf of the manual work, or agents are analyzing, proposing better, these proposals for the decision, so that decisions on daily basis, which happens a lot when you run the operations.
Those decisions are faster and more precisely. Either analyzing or doing the tasks. That's on daily basis from the operational point of view. All this together, these three elements where we are focusing in order to increase productivity, reduce the product costs. Targets here, of course, it varies year to year. We are giving here so that you get the full package, so that average annualized reduction, productivity improvement, to say it, is 7%. This year, like Bhasker mentioned earlier, we are targeting more than EUR 10 million savings. How to use this, Jukka will explain this little bit more carefully, of course, that price pressure, how we protect our margin. That's the one tool against that. Cost excellence and productivity. Then there was the third one. Third one was quality. It was quality, sustainability. First quality, then sustainability.
Quality, now thinking our model that most of the manufacturing value is coming from the supply chain, because if we take that manufacturing process, we do final assembly in-house, but most of the work done by our suppliers. Understanding that it's important that we understand quality, not only controlling in-house quality, but also from the very beginning, from our suppliers, we control the full chain. Even when we are selecting the supplier, but when the selected supplier is producing, we control the quality. Starting from the suppliers all around our own manufacturing, final testing, and then shipments to the customers. How to do it is that we are providing one data backbone. We have system so that we are providing testing platform to our suppliers when they are producing critical components like electronics.
We are providing the testing platform, so that we are capable to online trace and follow what they are doing. All the testing, all the manufacturing methods, what our suppliers are doing, we are capable to follow. As well in our own in-house manufacturing, we use the same platform, so there's very good traceability and reporting capabilities through that system. The sustainability. In overall, if we think Kempower sustainability strategy, it's so that we want to create value to our customers because our customers, they have the same sustainability journey that we are having. Focusing those assignments, task areas where we can impact mostly so that we can support our customers. Here I have highlighted from the operational point of view, main elements starting from that environmental aspect. How to reduce emissions.
Of course, Scope 2 own emissions we want to reduce, but as well the Scope 3. Scope 3, we all know that's full value chain, not only our own operations, the full value chain, especially supply chain. I think we all know that there's no one silver bullet how to reduce the emissions in the whole value chain. Instead, we trust that when we analyze, identify each and every year, three or five, up to five critical project, and then we run those projects. Action-oriented. We analyze, we identify, we select actions each year. Running those projects, we know that step by step, we are capable to reduce even the Scope 3 emissions. That's our idea and strategy. Another I want to highlight here, related environmental actions, is refurbishment. Giving the second lifetime for the components on modules.
The volumes, so that, in our factories, we are refurbishing components and modules. We started that last year, and we are gradually increasing the volumes so that we can impact positively environmental-wise. Social and governance. Both those topics are, again, how we can be enough transparent to our customers, because we are one supplier when we think from a customer point of view. Customers, they need to know that their value chain and supply chain is enough responsible. That's why, of course, our main topic, there is a safety, in-house safety in our supply chain. Also, how responsible our own supply chain is. That human rights due diligence, all those legislations coming, so we need to know that what is the conditions in our supply chain. Putting the focus there.
The governance, of course, it's not only processes and company, it's so that our products, that they meet the full compliance requirements. We are used to use third-party validation. Having certification for the products, validating our processes, having those certification for the processes, cybersecurity here as well. Of course, reporting according to current regulation and standards. Being as possible as we can be transparent so that our customer can trust, and it's easier for them to get all the data what they need to report forward. That's sustainability from the operational point of view. The fourth one, that basis for everything was that scalability. I think this is our something we are very good at.
Thinking our history, that as a startup, scaling, it was just our mindset, our culture, those early years, we need to scale from that zero revenue level up to that EUR 300 million revenue level less than three years. That's our history. That's why I somehow say that that's our mindset, that our culture, that we need to scale. Let's check what is our situation today. When we think scaling from the operational point of view, we are meaning the capacity. When you are saying production capacity, typically, it's combination of your asset, meaning what facilities, what production lines, technology you have, plus what is your workforce, what available workforce. Combination of those two elements. That's the capacity. Thinking that first one, that asset, facility production lines.
Where we are, like I showed, our manufacturing footprint in Europe and in North America, plus our supply chain. At the moment, we are asset-wise, we are capable to triple the capacity without major investments. That's the key takeaway. Using our existing footprint, increasing that productivity, optimizing the existing asset, we are capable to triple the capacity so we can reach our financial targets. That's what I'm saying. Of course, the workforce, because you don't want to keep too much workforce if not needed. Therefore, we need to optimize that whenever there's demand, there's correct amount of workforce, the labor. How to do it so that fast enough when there's a demand, when you need to scale, then you can do it.
There are two elements I want to highlight here, why we can say that approx., we can double our capacity workforce point of view within 12 weeks. There are two main elements. First, because part of our labor is coming from the rental, our partners, so we use a rental workforce. What kind of contracts and partners you are using? There is huge impact of that partnership. The second one, how good you give the training. When new employees onboarding, how fast you can train. What is your training methods? How you can make sure that very short time period, still the new she or he can produce products with the highest quality. The training methods is the second topic here. Key takeaway, existing footprint, no major investment asset-wise, and balancing the workforce. That's our scalability. Conclusions. Our operational excellence, it is Kempower's competitive advantage.
Why? Because we focus. We focus these key elements. We need to understand what customers are wanting. That delivery excellence, keeping those promises, that's the first. Driving that cost excellence and productivity while scaling, but still keeping very good focus, cost discipline, and increasing productivity. The last, like I mentioned quite many times, scalability. We need to be capable to scale even further. Thank you. That was my topic today.
Thank you, Sanna. With that, let's move to the financials. Let me welcome CFO Jukka Kainulainen to the stage. Jukka, please.
Thanks a lot, Calle, and nice to be here. Nice to see actually so many investors and analysts present, of course all the retail investors and others online as well. I have to just agree what Mathias was saying, what Bhasker was saying to being here in Oslo, in Norway, really forerunner of the electrification. When you look on the streets, amount of battery electric vehicles, amount of Kempower chargers, what you see here, it's so impressive. All the new technologies. You will see battery swapping stations again when you go a little bit further away from the downtown. Really great to be here. About my presentation, basically three sections. First one, how did we get here? From the historical track as a company, little bit look in the history. Second section, what is our revenue plan? How do we make the target to happen?
Our profitability plan, how do we make our operative EBIT targets to happen? Of course, at the end, our official financial targets. Let's go to the first slide. From zero to a leading industry player. Look the track in less than 10 years. We basically didn't exist in 2019. What happened? We grew the revenue from EUR 300,000 close to EUR 300 million. It's quite a unique performance, even in the European wide, whatever company you look. In the same time frame, we have been able to keep healthy gross margin. What is driving that? Jussi's presentation, we have been forerunner technology point of view, of course, visible in gross margins and also our overall business model, what we have created. It's contributing on those markets, on those numbers. Our liquidity development, which include the cash and our debt facilities.
We did the IPO 2021 at a EUR 100 million IPO. Even though there has been quite a tailwinds in this industry, like it is in the new industry, always, we have been able actually to increase our liquidity, which makes us as a really strong company wherever you look in this field in Europe and North America. This enables us also in the future to continue growing, taking the market, and excel in this industry. Second slide, this is the peer group analysis. Manufacturing companies, DC charging manufacturing companies, CPOs, Europe, North America. Y-axis, revenue quicker over the years. X-axis, profitability development over the years. When you look Kempower, we are there in northeast. We have been one of the most successful company when you look the revenue growth and profitability development over the years.
This is really important to remember because this is also creating really strong foundation for Kempower for the future as well. Next one, little bit continuing what Bhasker was highlighting also. How do we create value to shareholders in our new strategy period? As being the growth company, of course, we continue growing the top line, our revenue growth. We grow quicker than the market, which we have basically been doing all the time. Second thing, our aftermarket, what Calle was highlighting, and Monil as well, our services and software really critical area in the future. Not only for bringing better margins for the company, but also bringing more predictable business model, more recurring revenue, less volatility overall for the Kempower and in the investors as well. That is a great bridge on the operating profit expansion.
We already have, like Sanna was highlighting, we have quite a good amount of capacity. We have quite a good amount of people. We have operational leverage in the company to grow the top line without the massive investments. When the aftermarket bring nice improvement in the profitability, and we continue doing the productivity, what Sanna was highlighting, bringing us to the operative EBIT target. Of course, at the end, we need to continue investing, which is mainly OpEx-driven investments. We are quite selective in investments. It will be technology, our go-to market, and of course, the services as well as I was highlighting. This is the way we generate the value to our shareholders. Next one, regarding our revenue plan and how do we grow our revenue quicker than the market overall. Looking different areas.
First of all, we have a really great opportunities like Mathias was highlighting and, of course, Katri as well, in all the areas where Kempower is operating. Where we target to grow highest, of course, aftermarket side, services, software, also North America and Asia, because absolute terms, those are still the smaller market in relation to Europe. In Europe, we will be continue growing as well in the future. All these areas, we will be growing quicker than the market, and that's the way we will reach the revenue CAGR, compound annual growth rate, between 15% up to 25%. One important thing just to highlight to you, we have several customer groups like we were highlighting in Mathias presentations, Monil presentations.
Looking at the charge point operators customer group, these customers has been raising in last two years, EUR 10 billion of private funding in North America and Europe. This is now private funding. We are talking about public funding earlier in the presentation by Bhasker. Why this is relevant? This is relevant because that is creating the funding runway for those charging point operators over the next two to five years, which they can use, and they will use on investing in the charging infrastructure both in Europe and North America. Few examples of there, many of you know big CPO company in Germany raising EUR 600 million last year. Big CPO company in France raising EUR 300 million. Big CPO in Nordics raising more than EUR 100 million. Big CPO in U.K. raising more than EUR 100 million.
Big CPO in California had a massive ticket as well. Some of those are actually our customers. Really relevant for that customer group for continuing the investments, which is supporting, of course, our demand plan as well. The next one, what's our opportunity in services and aftermarkets? Like Katri was highlighting, we already have a quite a sizable amount of revenue coming from the aftermarket. It was 5% of the total revenue in 2025. 20 million EUR altogether. In quarter one, we already grew it to 7% altogether from the total revenue. It's of course, still quite a lot of spare parts revenue. We get some nice revenue from ChargEye as well. We have really nice opportunities there, like Katri was highlighting, looking the spare parts, continuing growth, service contract, modernization, of course, a ChargEye overall.
This is really a big opportunity for Kempower as a company. Our profitability target. How do we make the 10%-15% operative EBIT target to happen? Around two-thirds of that impact comes from our operational leverage. Like we already have been highlighting, we have enough scale capacity to grow the business further, even though we believe also that this sales price erosion will continue, but that will bring anyway most of the improvements. Adding on top of that, our impacts coming from the aftermarket, services and software, productivity savings, this 7% annualized savings, what we also bring to the table this year. Of course, like I was highlighting, we also are going to use OpEx for the new investments. These are the elements to make our operative EBIT target to happen.
One highlight, continuing what Sanna was saying already about our productivity improvement. Last year, we started the program in our company having up to 10 people involved to target this EUR 10 million annualized savings in our direct cost overall. Why did we started it? Price pressure, which is ongoing in the market already since last year. We had to, of course, take action on that. This unit cost savings program, like Sanna was highlighting, focusing on these areas, two to three areas, procurements savings, should-cost analysis, and of course the design and selection, what we do in our offering altogether. Not that you get too excited about this EUR 10 million what we highlight here. What's the outcome of that savings program and productivity improvement? We will defend our gross margin level. That's really critical for you to remember.
That's really critical defensive game anyway also in the coming years as well. The next one about our capital allocation in the new strategy period. Like Sanna was highlighting, actually, we are quite asset-light as a business. We are using around 3% of our revenue to CapEx. Now when we have facilities, we have done the investments, we expect that ratio even to come down over the years. There is three areas where we are going to invest, and these are actually mainly the OpEx investments. First one, fully linked on Jussi's presentation. We are forerunner in the technology in satellite charging systems. We will be also in the future, but it means that we will continue investing in R&D as well. Last year, EUR 19 million, when rounding up, 7.5% of revenue. As a technology company, that we will continue keeping on the high level.
The second thing cannot be highlighted more. This is how you see the development in our aftermarket revenue. Like I was mentioning, around 5% last year. Quite a nice actual development over the years, from 1.6% in 2022. This is the place we will continue investing definitely to bring in these nice margins, nice shareholder value as well at the end of the day. The third thing, our go-to-market investments. What does it mean? You see the bar there, how our sales team has been developing during the years. From 2022, around 30 people, to more than 80 people in 2025. The important thing is there, that how it's split between different geographies. 2022, it was mainly in the Nordics when looking the whole team.
and Monil Malhotra was presenting today, now we have North America, we have Europe, we have all the key countries in Europe presented as well in order to service the customers and in order to find the new clients as well. These are the investment areas we need in order to make the financial targets to happen. Of course, at the end, the official financial targets. Top line growth, revenue growth, between 15%, up to 25% compound annual growth rate by 2030. Operative EBIT target between 10%-15% by the year 2030. In dividend side, we continue the growth company dividend policy, no dividends on the short term because we allocate all the capital on company's growth. Another thing is, you see there the different market scenarios.
If market growth doesn't happen as we expect, we can always manage and control our OpEx investments, now OpEx plans like Bhaskar has mentioned. That's the way we bring the operative EBIT target on the table. Overall, top line wise, we grow quicker than the market. We are the growth company, we continue to be the growth company. We also will be profitable company, like we have been actually in the past. In 2023, we did 13% operative EBIT. In new strategy period, we target this 10%-15% operative EBIT. Thank you. Now I hand over to Calle.
Thank you, Jukka. Now we'll open up the floor for final questions. I would like to ask Jukka, Katri, Monil, Sanna, and also Bhaskar to join me on the stage so that we can start with the Q&A. Please join me here. All right.
Again, if you want to ask questions, please raise your hand and wait for the microphone. We have our first question there at the back.
Hi, it's Patrick Campbell from Nordea. Perhaps going to the outlook by 2030, could you perhaps quantify how important the ports sub-segment will be?
Bhasker, do you want to take this?
Yeah, look, when we look at ports, it is one of the fastest-growing segment. I would say amongst the sub-segments, it's one of the smaller ones, but fastest-growing. I'll tell you, we went out to California. You have to go to a port to really believe it. You immediately smell the emissions. Ports are driven by mandates. You look at California, you look at other places, by some of the port terminal operators really driving it actively. It's also not just emissions driven now, it's TCO driven. You can see that the ports are electrifying across that end-to-end value chain. Everything from when the ship comes in, to the transporter, to then the UTRs, the utility trucks that are in there. We are very excited. We just announced a deal so that we can share that with APM Terminals.
We do a lot of work with DP World. These are two of the largest port operators. You saw some of the other logos as well. We are very excited about ports. Fundamentally, the team's been doing a great job for years actually, in that segment. One of the fastest-growing segments, growing off of a small base, but I would say into a billion-plus opportunity over the next few years.
All right. Thank you. Perhaps going to margins. You seem to be assuming about 7% annual cost savings, and that seems to be quite close to the annual depreciation of charger prices. Will productivity gains actually support margins? If so, how much?
Jukka, do you want to start?
Yeah, I can take it. Like I tried to highlight, we want to defend the gross margin levels. Gross margin is something we forecast, we target this operative yield between 10%-15%. This 7% is, of course, what we aim this year and going further. That's the way we defend the existing level. It doesn't mean that we could even some years reach the higher levels as well. Don't take it as an upside. It's just a way to defend the existing levels.
All right. Thank you. Just the final one on the aftermarket side. What kind of margin levels are you currently doing on the aftermarket side, and what are you kind of penciling in for the coming years?
Maybe to start off, we only disclose the margins on a group level. We can't really comment on the margins. Perhaps any commentary around the services versus equipment?
Yeah. I can comment slightly on that. As said, unfortunately, we don't disclose those numbers. I think, of course, as we look and as I mentioned earlier, we do see kind of the benefits of the aftermarket bringing the recurring revenue as well as what do we see from many other industries. It is often the higher margin with aftermarket than with hardware.
All right. Thank you.
I'd say in line with industry benchmarks.
Any further questions? Yes. There in the middle, please.
Yes. This is Tom Skogman from DNB Carnegie again. In the aftermarket business, can you just highlight the key kind of spares and wears? I guess the AC drive should be a big item with kind of limited lifetime, for instance. Others as well.
Yeah. Bhasker?
Yeah, I can start, and Monil is close to it. I'd say, a couple of the examples that actually Katri shared. Spares is, yeah, regarding things that could break with wear and tear and use. Yeah, drives could be one, but typically that's got a little longer life. I would say one of the things that we get excited about is modernizations, for example, as well. Those are very, as you think about newer technologies that are coming in that can improve the life cycle, especially improve the life of the equipment as well as the efficiency of the equipment and the usability of the equipment, there's tons of modernization opportunities that come up. Contracts as well. Monil, you want to share something from your market?
Absolutely. From a specific parts standpoint, what we see customers really wanting to store in terms of spares are your dynamic module, your power module, cables. You'll come into specific smaller items like filters in a cabinet, et cetera. Those are typical spare parts, if I were to list the top four that we start to see. Bhaskar is right, as you go to modernization, now you're starting to delve into software and some other parts. Those are the four most widely used spare parts that we see.
Your model is scalable and modular, and you have warranty periods. Remind me how long it is. What happens to the warranties if the customer goes out shopping off-the-shelf AC drives, or how protected is the model long term?
Yeah
if you just change-
Yeah
Buy a pilot part in a small part, basically?
Well, Sanna actually pointed out, I would say that look, we own our own IP. For example, the AC to DC converters that we have, those power modules, those are IP protected. We have also dynamic control modules. Sanna, I don't know if you want to comment, but yeah, those are all IP protected, and that protects us against. The fact that we also do our refurbishment, that also helps us for the customers that are at different price levels, different warranty expectations, et cetera.
We're able to cater to those customers across their needs, depending on their appetite at that point in time on the price and where in the life cycle that particular product is.
How long is the warranty?
Can I?
Yeah.
We have standard warranty, it's two years. In some cases, some customers, it might be longer, but the standard is two.
Two.
Talking about these warranties, it's been like a big burden.
To the earnings. What has been the reason for this? Is it some certain component that has failed, and you have just guided that this warranty cost will decline significantly starting from next year? Why should we believe this?
Jukka, do you want to start?
I can start. First of all, we all the time come out with a new product version, new revisions, which have even better performance than the earlier ones. If you remember 2024, we actually launched the new product portfolio, which had a lot better performance metrics. This was the really key milestone when looking from the warranty cost point of view. Even on top of that, we all the time come out with a new product variation. That's why this cost, what we have in the P&L, it will be there still on the short period of time, but it's really an opportunity on the midterm and long term. Actually, we're looking at quarter one numbers, we already reduced the level from the last year, even though our space has been increasing.
Has the issue been that the chargers have not worked or not worked at the promised performance levels, uptime levels? What has been the issue?
Maybe Bhasker.
Look, looking outside in, I'd say, I came in and looked at some of the numbers, and look, I would say, when you look at this particular product and the use case, it's still a relatively young industry. I came from an industry with truck trailer refrigeration units that existed for 60+ years, where the products have been perfected, components have been perfected, all the issues. You look at this industry where there's the product interacting with the vehicle, interacting with the grid, interacting with the environment. There's still a lot of work which is across all these variables improving.
I would say that from a warranty perspective, accounting for all of those variables, how do you then keep improving the product design, working very closely with your customers in different use cases at different levels of product intensity, by the way, ports and fleets and CPO environment being used different. I see a very good trajectory of improvement, and perhaps Sanna, you can comment on.
Yeah.
Just to add that no one single root cause, but like Bhasker said, young, new market, new technology. Different root causes, but I think it's what we pointed already. You need to identify correct so that you prevent that in the future. New technology, I think that's the common topic.
Finally, how large could service or aftermarket share of sales be by 2030? Just roughly, do you talk about 10% or 25% of sales? It was 5% last year.
I can take it. No official target for that, but I think they're continuing the development from last year, 5% of revenue, 7% over in quarter one. Closer to double-digit percentage of the revenue. That's the journey. That would be good first milestone over there. Like we said, we don't have any official targets for that.
Thank you.
Hello, this is Niko Rongos from SEB again. I'd like to continue on Tom's question on aftermarket, as you just said about some guidelines or what are you thinking about how much aftermarket is out of sales in the future. Could you thematically open that how will that be divided between aftermarket and services and spare parts and so on? If you think about your broader services aftermarkets offering, are you focusing on more new equipment sold or also existing fleet?
Bhasker, do you want to start?
Look, I think we see such rich opportunities across each element in all those four areas that Katri walked through. I think it's hard to predict a mix at this point. This is, again, not a fully mature industry. If you were to ask me that question from the previous industry, I could get it to you in a decimal point. I think it's going to really depend on a lot of the technology evolution as well. I would say I wouldn't peg a number, but there are tremendous opportunities across, especially when you look at service contracts. Customers increasingly, we went out to the U.S., there's customers saying, "We want to focus on our core operation. That is to deliver energy. You manage the rest, everything in between." We want to be able to also predictably manage our costs.
You give us a price ticket, we manage that. I think, we see a lot of that, and we're building out the capabilities already to be able to cater to that. Katri shared modernization as an example, shared the software potential. We see tremendous opportunities across all of those. Look, we said the install base is going to grow 2.5x plus. That's the absolute low, very conservative estimate. You could reasonably expect multiples of that in terms of growth rate on aftermarket.
Yeah, are you now targeting to go to your current existing fleet to sell more aftermarket service business, or are you focusing on new equipment sold there?
Yeah, I think it's of course natural because when thinking about the installed base and how also more and more equipment are coming out of warranty. In that way, it's natural of course that there will be in numbers more of the opportunities to offer different aftermarket services. I think in that sense, yeah, thinking about the service. Also what I was sharing also earlier about the data. I think we have a lot that we can offer on the insights, but, i t's also an area where we will most certainly, if looking towards the future, we will find new ways to use it even better for the customers.
All right. Great. Thanks. One last from me regarding the profitability target. Are you planning that to come basically linearly hand in hand with sales scale, or are you planning for already clearly positive earnings in the first years of the strategic period?
Jukka, do you want to start?
Great question about even the short-term guidance, this year guidance, improving significantly profitability. That is where we stick to. Like you see on the long term, of course, 10%-15%. It's quite an improvement, quite a well aligned what we have been doing also in the history, also in the best years. Unfortunately, I cannot comment next year's profitability. You need to wait little bit less than one year when we come out with the 2027 guidance. Nothing in this industry happens linearly, but we continue improving year by year. We continue growing revenue year- by- year. We continue improving the profitability year- by- year.
Sustained profitable growth. That's going to be the mantra for us.
That's good. Thank you. That's all from me.
All right, any further questions? Maybe just a reminder, you are allowed to ask questions from all the speakers in all the presentations. You don't just have to stick to the ones on the stage. Please go ahead. Mika.
Hi, Mika from Danske. Concerning the spare parts sales, during the life cycle of the charger, how many times, for example, you need to change the power modules or cables on average? Some kind of rule of thumb if the chargers are used properly.
Yeah. Perhaps I take that.
Yeah. Go ahead.
I'd say, look, five years in, the life cycle is 10-15, so we need to be able to see that. We design for life is pretty long. I would say at this point, it's still very young in install base. Across the industry, I won't even say for ourselves. I think those are some of the numbers that are still being worked through still with the early generations. That's always natural with the early generations, you see more failure. We have much more mature product, so it's much more stable at this point. With five years in, say, a third of perhaps the life cycle is still very early to put very hard numbers to that.
Yeah. Maybe to add there, I think the good news is also, of course, the data insights. In a way that if it's a busy place where it's constantly in use versus if it's a bit more remote location. Again, it's not only elapsed time, but it's really on the usage time. Again, we can help on these insights then to customers as well.
Maybe if I can continue on top of that. Good to remember the industry, how quickly it's evolving because in Nordics we already see quite a lot these 50 kW chargers from plus five years ago implemented on the different sites. It's operational, I guess, in theory, but those are the ones which are actually interesting replacement opportunity. It's interesting this development so quickly, so that's important to take into account.
We see, Mika, aftermarket as a good balanced mix, not one particular thing that will overarchingly drive. I think that would be the approach.
Yeah.
All right, any further questions? There's one here in front.
Thank you. Melanie Brooks from Fondsfinans here and also I'm a PM. Two questions, actually. One is that I see it's obviously a different industry, but a few parallels with another company in my portfolio, and that's Vestas. We have some issues with warranty provisions there that are well known. There's a little bit about that. When launching new products all the time, you end up having a lot of warranties. Then the other one with the aftermarket segment. Vestas has notoriously spoken about higher margin services business and the data that they gather and have yet not really been able to monetize well. I see a little bit of that here. There's a really strong narrative, and it's intuitive that you're going to be able to grow this area with a larger install base.
I think it's important to maintain credibility in that to be able to give more granular breakdowns of the amount of revenue coming from the different segments and the margins that you're getting from those areas and the development there. If you can do that moving forward, I think it would be really good for investors to understand. That's maybe more of a comment than a question.
Absolutely.
The second one, I've looked and I really am concerned with sustainability and circularity. It's great, I've seen 99% of the hardware can be recycled, and you've been talking about refurbishment. I wonder who's actually responsible for end-of-life management of the hardware. If you have a product that lasts 10 to 15 years, you're still very early in that journey. There could be a lot of really valuable components there as well. Do you have any kind of formal take-back mechanisms? Are there any kind of evolutions, especially with European legislation, for extended producer responsibility that you'll need to think about and plan for?
Sanna, you want to?
Yeah. At the moment, we have a simple take-back services, actually I think that's one Katri's roadmap how to improve because we have huge opportunity there as well. Yes, doing it already now, we see that it can be more and more wider package in the future. I truly believe that when we think the factory and the products and volumes, when we think the future, there's more and more that refurbishment and not original production, refurbishment of that because that's very quite right at the moment.
All right. Thank you. Any more questions at this time?
If not, then that ends the Q&A session for now. Now we'll move to the closing words by Bhaskar. The rest of us may return to our seats while I hand over to Bhaskar for one final time.
Well, thank you, Calle. Thank you to all the presenters. Well, yeah, I'd say in closing, first of all, we really appreciate you all visiting and traveling here and joining us. Hopefully, and I'll go where I started, that we would like you to leave with the conviction that, hey, look, this is the EV charging build-out. The infrastructure build-out is one of the largest infrastructure build-outs of our generation. It is such an exciting and an important opportunity. If you think about what Kempower 2.0 is about and why it's exciting and credible, these four things. Number one, we're mission-driven, accelerating the electric mobility transition. We're committed to that. You'll see a glimpse of that here in Oslo. You'll see that tomorrow when we go out to the sites.
Our vision is to be a top-three global leader in DC fast charging, trusted by customers, built to compound. Trusted by customers, you heard numerous examples today of how we are developing deep relationships and partnerships with our customers. As they scale, we scale. Build to compound, this is about compounding results, right? What drives this? We're in an attractive, fast-growing market. We looked at the different scenarios, low, medium, high. In the base scenario, the midpoint, this EUR four and a half billion market grows to EUR 10 billion plus. How many industrial tech segments are growing at this clip? It's a great market to be in. It has reset from previous expectations, but still a great market where the BEVs, even after resetting, is expected to triple in terms of the number of BEV sales. In this market, we're a proven leader.
We have the distributed architecture that we bet on early. We're doubling down on that, and we're continuing to lead that with the strongest combination of hardware, software, services. It's all about the full stack for us, right? You look at as we're expanding to full lifecycle solutions, appreciated all the questions and a lot of the interest. We feel very excited about this. Again, the full mix of the opportunity across the four levers. Really that evolution has started already and it's going to pick up steam and pace over the course of the next few years. Sustained profitable growth. Our revenue target 15%-25%. Again, not hedging. This is a conditional architecture tied to the different market scenarios. In terms of the profitability, it's about sustained profitable growth.
Not about one heroic quarter, not about one heroic year. It's sustained profitable growth. That's going to be our focus. There's so many things at play here. This is still a bit of a land grab opportunity. We focus on the top line and we focus on the bottom line, and there's so many levers that we're managing in between the margins, the reinvestment levels, warranties, mix between different product lines. That's what we target and we commit to is the 10%-15% EBIT margin by 2030. In conclusion, that was our strategy and our new financial targets. We're super excited. Again, thank you all for joining. For the ones that are returning, wish you all safe travels back. For the ones that are staying, we look forward to further engaging with you.
Thank you all, and thanks to everyone who joined on the webcast. Appreciate it. Take care. Thank you