With Congress awarding tax incentives, installing an electric vehicle charging station at home has just gotten more enticing.
Businesses are also entitled to a tax credit of up to 30% of the total cost of hardware and installation under the Inflation Reduction Act.
The fine print varies per state, so be sure to check out this comprehensive guide on Federal and State EV Charging Tax Credits, Incentives, & Rebates so you'll have an idea of how much you can claim.
Now, for all the profit-minded people out there, you might be interested to know whether it's time for you to have a charging infrastructure built on your property.
After all, there's an aggressive push to completely abandon gas-powered vehicles in favor of electric vehicles.
And with high demand comes a big window of opportunity.
Can electric car charging be a business?
The simple answer is, yes.
Though most EV drivers opt to charge at home, they're limited to charging rates of about 3 to 46 miles of range per hour. That's if they have Level 2 EV chargers installed.
This might be enough for EV owners who only need to top up for shorter daily commutes.
But this changes once you take into account longer commutes and road trips.
If you really want to kick it up a notch, DC fast chargers can charge your EV in approximately 30 minutes. But given the installation and maintenance costs (around $50,000), they aren't exactly suitable for private use. However, they are good for public use - which presents a huge opportunity for those looking to turn a profit.
EV charging stations can follow the same business model as gas stations.
You can just simply charge vehicle owners for the electricity they use.
But there are other ways charging stations can earn money.
How to generate consistent revenue from EV charging
Noticed how gas stations in North America are almost always right next to convenience stores?
In fact, most gasoline companies even have their own chains of stores, like Shell Select and Chevron ExtraMile.
That's no coincidence. Gas station owners actually make very little money from selling gas. Most of their profit comes from offering food and drinks in their convenience stores.
Following this business model, fast charging stations not only can earn from selling electricity to EV owners but even more so from simultaneously operating a convenience store or a restaurant.
How to boost customer spending with EV charging
EV chargers are found to attract customers and significantly increase the amount of time customers spend in commercial establishments.
And increased foot traffic means increased sales.
Electric cars can take less than an hour to fully charge at fast charge stations.
However, the duration will still be contingent on the battery size. This implies that commercial customers will have approximately one hour to spare, whether it's for grabbing a meal or doing some impromptu shopping before embarking on an unplanned road trip.
If you're planning on setting up your own public charging station, keep in mind that you're not only selling electricity but also the experience.
Busted restrooms, lack of food options, and outdated facilities could drive away both old and new customers.
And if there's no foot traffic, there's no profit.
How to earn revenue with EV charging at retail locations
Retail locations like supermarkets, malls, and shopping centers are now equipped with EV chargers (often Level 2).
The thing is, you can't really add that much mileage to your car on a mere 20-minute grocery run, especially using a Level 2 charger.
What you can do is analyze what charging level is best-suited for your business model.
Considering this aspect, Level 2 chargers are well-suited for locations such as shopping malls, stadiums, venues, and certain restaurants, where visitors typically spend several hours or more. With Level 2 chargers, patrons can expect a range of approximately 25 to 50 miles per hour of charging, making it convenient for them to charge their electric vehicles while engaged in other activities.
But for businesses located along major highways, like convenience stores, it's safe to assume that rapid chargers are the way to go.
DC fast chargers (or Supercharging network for Tesla owners) promise up to 150 miles of range per hour.
And did you know that Tesla drivers can even access DC fast chargers using the Lectron CCS to Tesla Adapter? That means EV drivers with any charging standard can get a charge, and you can serve 100% of the EV market!
As I previously mentioned, owning charging stations means providing an experience consumers would consider going back for.
This may come in the form of excellent customer service, well-maintained facilities, and shopping options.
Take this full-service auto and tire center, for example.
Aside from the services it offers, it also has a store stocked with local products and hot food options that are not commonly found in other gas stations.
And if you're thinking on a much larger scale, you can even launch a loyalty program for frequent shoppers and chargers.
Understanding different EV charging pricing strategies
There are several pricing strategies that you can implement to make your EV charging business profitable.
-
Cost per kWh. EV owners only pay for the amount of energy they use (i.e., $0.15 kWh). You can also mark it up according to how you see fit (i.e., $0.10 kWh). To put that into perspective, a car that used 30 kWh will have to pay:
30 kWh x $0.25/kWh = $7.5
-
Flat rate. Charging a flat rate means drivers will pay based on time spent charging. If you set your hourly rate at $3.00/hr and the station is charging at 8 kW, a car needing 30 kWh will take:
30 kWh/8 kW = 3.75 hours to recharge.
This means the driver will have to pay around:
3.75 hours x $3.00 = $11.25
-
Combined system. Implementing a combined system isn't a common practice, but this only means you combine the two forms of billing to charge your customers. For example: $0.35/kWh + $0.20/hour. This will reduce the hourly rate while ensuring that they don't wait for hours to get their cars fully-charged.
FAQs
-
Are EV charging stations a good investment?
EV charging stations alone don't generate high profits, but the indirect income they bring to commercial establishments could be a reason to consider them a good investment. For example, being in close proximity to restaurants and shopping centers could drive EV owners to avail of your services while dining in or doing a grocery run and vice versa.
-
Can you make money owning an EV charging station?
Yes, owning an EV charging station is a great business opportunity. Though you can't expect outrageous amounts of profit from charging itself, you can funnel in foot traffic to your store. And more foot traffic means more selling opportunities.
-
How much can you make off a charging station?
EV charging stations could make profits, but you'll have to invest in infrastructure. Luckily, the Inflation Reduction Act entitles you to up to a 30% tax credit for the hardware itself as well as installation costs. How much the station earns will depend on the form of billing you choose and the number of customers you attract. Electricity rates in your area will also be a factor, especially if you're charging per kWh.
-
What is the demand for EV charging stations?
There is high demand for EV charging stations, especially in areas where public charging stations are few and far between. And with an aggressive push to phase out internal combustion engine vehicles in the next decade, you can expect that demand will continue to increase.
Electric car charging stations business opportunity
Installing EV charging stations today is about more than just preparing your location for this shift in transportation—it’s also a clearcut path to attracting more customers and generating more profit. Below are a few examples of how adding public EV charging can make your existing business more profitable, as well as become a revenue stream all on its own.
How to increase customer spend with EV charging
In today’s competitive landscape, businesses must think of creative ways to attract customers while also boosting the value of each transaction. Transforming your location into an EV charging destination is one of the simplest ways to do just that.
Increase the average duration of each customer interaction
Once EV drivers stop to charge, there is an obvious cross-selling opportunity for add-on products and services. Whether it’s a rideshare driver recharging during a lunch break or a little league coach topping off his battery while getting snacks for the team.
EV drivers will be more willing to visit and spend time at your location if you offer EV charging.
Depending on the type of charger you choose, EVs can take anywhere from a few minutes to a couple of hours to charge (depending on battery size). For shops, restaurants, or gas stations, a fast (DC) charging solution is an ideal choice, charging even the largest EV batteries in under an hour.
However, since most EVs coming to your location aren’t looking to charge from 0-100 percent, a standard Level 2 (AC) charging solution can also suit most driver needs, allowing them to add ~25 miles of range per hour. In many cases, a mix of AC and DC charging stations is the best solution.
Either way, by offering your customers a convenient charging experience, you also encourage them to spend time and money at your location while they wait.
How to attract customers with EV charging stations
Our research, in partnership with Ipsos, found that EV drivers are more educated, wealthier, and younger than the average population. With more disposable income than gas-car drivers, your EV-driving customers will not only spend more time at your location but also purchase higher-end goods and services every time they visit. Plus, these drivers are likely to turn into loyal, repeat customers once they know your business offers this valuable service.
According to the EY Mobility Consumer Index, 52 percent of car buyers are considering an EV for their next purchase. As a consequence, locking in your location now as one of the places that provide EV charging could turn your business into an often-frequented EV charging destination.
How to improve business reputation with EV charging stations
EV charging stations also put your business on the map—literally. Popular navigation sites like Google Maps or Waze, and dedicated charging apps such as PlugShare feature interactive maps that enable drivers to locate nearby public charging stations. By having charging stations at your site, you can boost your brand visibility on these platforms and attract new customers.
Plus, with customized charging stations that display your brand colors or logo, you can drastically improve your corporate image by letting everyone who sees them know that your organization is openly committed to a more sustainable future.
Environmental concerns are increasingly top-of-mind for your customers. By having charging stations on your property, you can establish your business as an eco-conscious organization—and even earn some prestigious sustainability certifications for your location (LEED, GBB, WELL).
Generate EV charging station revenue
Attracting new customers, earning brand loyalty, and increasing the time (and money) spent at your location are all excellent examples of how EV charging can drive profitability. But the most obvious way EV charging can boost profits is the revenue earned from the stations themselves. Depending on the business model you choose, you can generate additional income by setting charging fees, and your customers will be more than happy to pay them.
Are EV charging stations profitable?
Yes, they can definitely be profitable. EV charging is a service drivers are willing to pay for, especially if it is fast charging. Of course, how profitable it is, depends on the specifics of your situation, location, and business.
There are a few primary ways you can structure pricing on your charging stations—it really depends on what you want to get out of your setup. You can also test out different strategies to find which works best for you. By having an overview of your stations’ pricing and energy usage via your charging management platform, making adjustments to your setup is as easy as updating a few settings.
Earn money by setting charging fees for your customers and visitors
Before you can start earning revenue from your charging stations, the first thing you need to figure out is how you want to bill for charging. As the charging station owner, you can set your own charging fees and adjust them at any time. This may include a fixed session start or connection fee and a variable rate for the energy used.
EV Charging fees based on energy consumption
One common practice is to simply charge the cost of energy being used (i.e., $0.15/kWh). You also have the freedom to define your own markup (i.e., $0.35/kWh). So, if a car pulls up and needs to charge 25 kWh, that’d be:
25 kWh x $0.50/kWh = $12.50.
EV Charging fees based on time
If you’d rather set a fee based on time, you can implement a flat hourly rate (i.e., $2.75/hour). So, if the station is charging at 7.4 kW, and the car needs 25 kWh to recharge:
25 kWh / 7.4 kW = ~3.5 hours.
From there, just multiply the time plugged in by your hourly rate to get the estimated revenue:
~3.5 hours x $2.75/hour = ~$9.63 total.
Combined EV charging fees
Some sites combine the two forms of charging. For example $0.45/kWh + $0.30/hour. This helps to reduce their hourly rate while still ensuring guests don’t “camp out” in a spot when their car is fully recharged.
Disclaimer: These prices may be higher due to the current energy crisis.
EV Charging fees for fast charging
It’s important to note that consumers expect different energy prices depending on the type of charging your stations offer. Commercial AC charging tends to be cheaper and can take around four to six hours to fully charge a vehicle, depending on the model. DC charging prices are typically higher, as fast charging allows drivers to spend less time plugged in (usually between 15 minutes to an hour).
The amount of revenue you can earn also depends on your location type and how often your stations are utilized. At hotels, for example, guests typically park for eight to 12 hours overnight while they sleep. In this scenario, AC charging stations would be the ideal investment.
At rest stops or gas stations, on the other hand, customers usually park for 15-30 minutes while grabbing a snack or coffee. In this scenario, DC fast-charging stations would be more suited, with a quick enough turnaround time to allow all your customers to charge quickly and get back on the road.
EV charging station revenue overview
To give you a ballpark idea of how much monthly revenue you can make from offering EV charging, here’s a breakdown of some common scenarios and the estimated revenue of different charging scenarios.
How much revenue can you earn from EV charging per month?**
Your visitors are looking for charging
During a coffee break
On a short shopping visit
While eating a meal
During part-day parking
During the day or overnight
Estimated parking/
charging time
15-30 mins
0.5-2 hours
0.5-2 hours
4 hours
8-12 hours
EV
Infra-
structure
example*
2 DC chargers
2 DC chargers
4 AC chargers
4 AC chargers
20 AC chargers
8 AC chargers
Estimated gross revenue from EV charging per month**
Standard location with lower utilization
$2,640
***
$3,000***
$1,680***
$6,300****
$4,200*****
Daily station usage
DC: 4X
AC: N/A
DC: 1
AC: 2X
DC: N/A
AC: 2X
DC: N/A
AC: 1X
DC: N/A
AC: 1X
Popular location with higher utilization
$10,560***
$6,000***
$3,360***
$12,600****
N/A
Daily station usage
DC: 8X
AC: N/A
DC: 2X
AC: 4X
DC: N/A
AC: 4X
DC: N/A
AC: 2X
Due to longer charging times, stations are not used more than once per day
*Actual infrastructure varies depending on the site // ** Excluding any operator fees applicable. This table is only an example and may not reflect actual gross revenue earned at a specific location. // ***Calculations are based on the assumption that the DC kWh consumption will be 40 kWh with each charging session at a cost of $0.55 per kWh, AC 20kWh consumption with each charging session at a cost of $0.35 per kWh // ****Calculations are based on the assumption that the AC kWh consumption of 30 kWh per charging session at a cost of $0.35 per kWh // *****Calculations are based on the assumption that the AC kWh consumption of 50 kWh per charging session at a cost of $0.35/kWh.
You can also set different charging rates for various customer groups. For example, you could use a stratified approach where some guests pay less than others (i.e., discounted EV charging for rewards members).
EV charging to grow your business
From cross-selling opportunities to generating its own revenue, EV charging is a great way to bring in some new business—and it’s only going to get bigger.
If you’re considering installing EV chargers at your business, our latest commercial EV charging solutions offer easy ways to scale up monetization and allow you to stay in complete control with its connected and smart charging features.