A Complete Guide to the ROI of EV Charging Stations
Installing electric vehicle charging stations can put your commercial property ahead of competitors, as experts predict the EV market could grow to more than $800 billion by 2027. Establishing the right EV charging station payment and pricing policy for your office building, multifamily property, multi-use space or retail venue is an investment in your future.
So what is the ROI of an EV charging station (or several)? How can you structure your EV charging station payment system to maximize your returns while keeping visitors happy? There are multiple ways for your business to reap returns. Here’s what to know as you assess the ROI and value of installing EV charging stations.
Tax Incentives and Rebates Reduce Costs for Your EV Charging Infrastructure
Before you begin calculating the ROI of EV charging stations, it’s important to consider the tax incentives and rebates that come with the purchase and installation. Currently, the IRS offers up to a 30% tax credit off the cost of commercial EV charging stations up to $30,000. Since President Joe Biden has expressed his support of electric vehicles, these tax credits may be extended or even enhanced in the future. Plus, states offer additional incentives and cash rebates beyond what the federal government provides.
Ways to Structure Your EV Charging Station Payment System
Property managers, for example, have choices when it comes to structuring their EV charging station payment system for maximum ROI. Of course, you can always opt to enjoy the multiple benefits of EV charging stations and offset charging costs and expenses with utility or state programs, while attracting tenants and residents.
Through the EV Connect platform, you can tie charging privileges to membership or residency. You can also offer free charging as a reward to loyal customers or members while billing other one-time visitors. All payments can be processed using the EV Connect platform. You can also offer free charging as a reward to loyal customers or members while billing other one-time visitors. For example, someone who’s part of a hotel’s rewards program might receive free charging, whereas a one-off guest would be charged directly. The model is completely flexible and up to you.
If you decide to charge visitors or tenants in your building, you also have a few different options. Our experts can provide data driven analytics and industry knowledge to align your pricing policies with your revenue goals. You’ll also have a dedicated customer success manager who can offer ongoing support so you can continue to optimize your EV charging business.
Flat-fee Charging
One of the simplest systems is flat-fee, pay-as-you-go charging. Drivers would pay one rate regardless of how long they stayed plugged in. For many people, the convenience of EV charging means they won’t mind paying full price for a quick charge — and the cost outlay will balance out for you.
Metered Billing
On the other hand, metered billing means drivers pay only for the charge they need. It can be calculated by parking time, energy use or charging time. Paying by energy use may work best if you don’t power your chargers via solar energy — especially if you live in an area with high electric costs or smart metering that bills you different electric rates based on peak usage times.
Metering by charging or parking time, however, can keep your payment structure simple and straightforward for customers. They will see the value because they are only paying for the power they receive or the time they spend at your charging station. This model may be best for retail locations, where drivers come and go and you’re servicing a steady stream of different customers each day (rather than recurring visitors).
Whatever billing system you decide to use, the EV Connect app makes it easy to let customers pay directly through their smartphones. The easy pay-by-phone model represents a significant advantage over traditional gas stations for ICE vehicles where cash payments are inconvenient and credit or debit card payments often carry higher prices.
Speeding Up Your Charging Station ROI
You can also indirectly increase your business profits through the ROI of EV charging stations. As more people drive electric vehicles, providing the best driver experience increases in importance to continue attracting people to your business. EV charging stations not only bring in new customers, but studies have shown they increase the amount of time people stay in the store. One study found a positive correlation between the time people spent in a clothing store and the amount of money they spent.
Attract the Best Tenants and Increase Your Resale Value With EV Charging
If you’re a landlord or property management firm, you’ll find that retailers and restaurants, in particular, will be more likely to stay in a location that attracts high-quality customers. This is also true with multifamily housing including high-rise buildings and luxury complexes. Since most EVs are still on the pricier side of passenger cars, EV charging stations attract more financially stable customers who also care about sustainability and the environment. One study by CarMax/CleanTechnica revealed that 65% of EV owners are over 40, 70% are college educated and close to 70% make $75,000 or more per year. A study from TrueCar.com discovered that Ford Focus electric car owners have an average annual household income of $199,000 while Fiat 500e owners had a household income of $145,000.
EV Chargers Can Increase Resale Value of Commercial Properties
Adding EV charging to Class A properties can increase the value upon resale. Not only are you selling a building with steady, consistent tenants, but you’re providing a coveted amenity for this demographic. If you couple EV charging stations with solar panels to feed them energy, you can reduce the overall net operating costs of your building.
Are You Ready to Add EV Charging Stations to Your Commercial Property?
Many property managers have concerns about structuring their EV charging payment system and whether they will earn a profit from the stations. There are many ways to increase the ROI on EV charging stations. EV Connect consultants can help you with everything from installation to establishing the right pricing policy for your property.
Sources
Allied Market Research - Electric Vehicle Market Expected to Reach $802.81 Billion by 2027
Research Gate - Time Spent Shopping and Consumer Clothing Purchasing Behavior
Utility Dive - Retail Co-location May Prove Key to Sustainable Funding for EV Charging
Mackinac Center for Public Policy - Taxing the Poor to Pay for Your Electric Car