EV charging is on its way to becoming more profitable than gas stations. Currently, there are not enough EV charging stations in the U.S. The nation’s EV infrastructure is currently drastically behind the pace of EV adoption. The country’s EV charging infrastructure must grow at a more rapid pace than it has. The White House and dozens of state governments are all preparing for an electrified future through policies supporting EV charging infrastructure and incentives to encourage businesses and residents to install EV chargers on their properties. While EV charging stations synonymous with today’s gas stations will be a part of the growth, EV charging stations are able to expand beyond just one type of installation. They will experience demand from many industries, including workplaces, retail, hospitality, homes, and multi-unit properties. Now is the time to take advantage of the EV charging movement and consider investing in an EV charging station franchise.
What is the business model behind electric vehicle charging stations?
Since EV charging stations are being installed in so many varying industries, the business model differs and depends on the type of business they are installed at. Overall, there are two main business models for a commercial EV charging station: owner-operator and third-party owned and operated.
In the owner-operator model, the site host owns and operates the EV station equipment. This means they are responsible for working with their electric utility provider, maintenance of the stations, and covering the operating costs of the stations.
In the third-party owned and operated model the site host doesn’t own or maintain the EV charging stations. In this model, the third party is responsible for the EV chargers and will sometimes collect part or all of the revenue from the charging stations. Yet, the site host still gets to reap the other benefits of having EV charging stations on their property like the ability to attract more customers, employees, or tenants and an increase in customers’ dwell time at their location. The site host will have no control over pricing or how the stations are run but will have none of the risks associated with the owner-operator model. The most well-known third-party owned and operated charging station business model is known as Charging-as-a-Service or CaaS.
What is EV Charging as a Service?
Charging as a Service is a business model that allows businesses to have EV charging stations without the risks. Businesses don’t have to deal with expensive upfront costs or maintenance and operational expenses. Instead, a third party owns and operates the EV chargers, while the site host receives a turnkey EV charging solution, which includes installation and management software. The site host also gets to reap all the benefits of EV charging stations without being responsible for the chargers.
Are electric car charging stations a good business opportunity?
Yes, electric car charging stations are a good business opportunity. To add to their appeal, electric car charging stations are a newer business, which means you will be ahead of the curve if you invest in an EV charging station franchise now.
An EV charging station business is profitable in more ways than just charging fees. In fact, indirect revenue sources hold more weight than charging fees in most charging station franchises. Yet, having charging fees does help to offset costs and increase the station franchise profit margins.
Businesses have different reasons to consider fees or to maintain free charging sessions. Fees are usually a good idea because they help to offset the electricity costs and have the added benefits of enforcing good charging etiquette. If EV chargers are offered for free the site host will have to deal with drivers of traditional cars or EV drivers who don’t need a to be charged parking in EV charging spots because they are looking for the best spots in the parking lot, EV drivers charging for longer than they need to, and drivers leaving their cars at the electric vehicle charging station all day (especially if it is at a workplace). Establishing charging fees helps to ensure the people who need to juice up get the charge they need.
Some companies opt for a sort of in-between option, which is to subsidize the charging fees for customers, employees, or tenants.
It should be noted that most studies on the subject have found the majority of EV drivers do expect to pay for charging. After all, drivers pay for gasoline at the gas station.
There are several ways of profiting from EV charging stations:
- Free (no fee): EV charging is offered for free just as an amenity for customers, tenants, and employees. The business sees profit from public chargers on their property in the form of increased sales from attracting a larger customer base and seeing increased dwell times from customers as they wait for the cars to charge. Workplaces can attract talent and increase employee loyalty. The company can also take advantage of green branding opportunities and the ability to meet sustainability goals.
- Cost Recovery: Fees are set at prices to offset the installation and operational costs as well as protect the owner-operator from unforeseen costs. Fees are usually structured by per kilowatt-hour of electricity delivered, per charging session, or the amount of time spent charging.
- Profit: Fees are set at prices to generate a profit from charging an EV. Fees are usually structured by per kilowatt-hour of electricity delivered, per charging session, or the amount of time spent charging.
- Advertising Revenue: The third-party owner-operator relies solely on advertising fees to turn a profit. EV charging is offered for free. While the EV driver charges their vehicle they will have a large screen next to them with rotating advertisements.
- Leasing Revenue: The site host leases part of their property to the third-party owner-operator for electric car charging station installations. The third-party will charge EV drivers fees for plugging in and will own and operate the EV chargers.
- Revenue Sharing: The site host pays a portion of the revenue made from sales generated by customers spending more time in their stores to the third party.
Types of EV charging station franchises
A commercial EV charger comes in two types: Level 2 and a DC fast charger. Both types of chargers have their pros and cons in an EV public charging station setting. A level 2 charger is a good option for most retail and hospitality customers. A Level 2 charger adds a range of 15 to 75 miles per hour of charge. This charge is the Goldilocks option for most businesses because it is fast enough to keep EV drivers satisfied but not so slow that they become discouraged from charging with them. The speed is also great for increasing customers’ dwell times in stores. A DC fast charging point is the best option for EV charging stations that are standalone stations located along major roadways. DC fast chargers can charge 80% of an EV’s battery in as quickly as 10 minutes. EV drivers looking to get in and out and back out on the road like at a gas station are more likely to plug in at DC fast charging stations.
The station cost for DC fast charging is much more expensive than Level 2 charging. The power level and power output requirements of DC fast chargers are larger than Level 2 chargers so there are more electrical upgrades needed and the electrical work is more intense.
How do you start generating revenue from an EV charging station franchise?
To start an electric car charging station franchise you will have to work with an EV charging company that offers turnkey EV charging solutions. The charging solution should include the EV charging stations, installation of the chargers by verified and licensed electricians, permitting, design of the EV charging station system, and software that controls the chargers. EV charging software is a necessary part of a networked electric charging station. A networked EV charging station is connected to an EV charging network, usually via WiFi. Using EV charging software, owners and operators of EV charging stations can control accessibility, set and change charging fees, run reports on charging sessions, and run routine maintenance.
WattLogic is a premier EV charging company that is committed to providing the ultimate turnkey EV charging station franchise solution. We provide everything listed above and as a bonus, we offer our clients rebate management. Whether you are interested in a Level 2 charger or a DC charger commercial EV charging station package, our team of incentives specialists will research rebates and incentives available for your particular project and apply for them on your behalf.
We’ve also made the quoting process easy for you. Instead of waiting for multiple electricians to come out to your location for a site assessment, we can do it all for you online. Fill out our online survey, receive your estimate, and start making money from your EV charging station franchise!