EV charging demand is growing.
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A new focus on sustainability is creating a shared commitment among tenants, investors and developers to reduce carbons emission in the built environment. Beyond providing building- and planet-level benefits, new tactics are impacting a property’s potential to increase foot traffic, attract tenancy and generate additional revenue. Nowhere is this more evident than in the adoption of electric vehicles (EVs).
The environmental benefits of EVs are well documented: zero tailpipe emissions translate to radically improved air quality if vehicles are adopted at scale, and reduced reliance on gasoline cuts the impact of extracting, refining and shipping oil products needed for conventional combustion engines.
American drivers purchased nearly half a million electric vehicles last year, accounting for about 3% of all new cars sold. That number is expected to expand dramatically as concerns about climate change grow and gas prices—already at their highest level in U.S. history—threaten to continue their rise. Auto makers are responding with more EV vehicle options, and a greater number of older-model EVs will also make their way to the used car market.
The challenge is EVs on the road are already outpacing available charging outlets, with only about 50,000 public charging stations located across the country. Given this mismatch, EV charging is becoming a “must have” amenity for office buildings, multifamily properties and retail centers—and many companies are taking notice. With this need and growing support for the adoption of emissions-free driving from the government and automakers comes a multitude of potential benefits for property owners in every sector.
In retail settings, we’ve seen savvy owners take advantage of 30-minute minimum charging time to lure drivers into stores with special discounts and promotions. Starbucks, attempting to redefine the rest stop, is combining coffee with EV charging with plans to install stations in its parking lots every 100 miles along a previous charging desert from Denver to Seattle. They’re betting EV drivers with “range anxiety” are likely to return to properties with reliable charging stations, creating a new opportunity to win repeat customers.
For office building owners and tenants, EV charging is another component of sustainability that is increasingly needed to attract top talent. Employees want to return to a high-quality and responsible workplace that supports their own environmental activities. While today EV charging might not be a “make or break” item for tenants, it remains an important differentiator.
This scenario is already playing out at rental and condo properties, where competition for a charging station can be fierce. Most EV drivers power up their vehicles at home, overnight but stations are often limited and, from the property’s perspective, it can be difficult to determine who is using additional electricity in a multifamily setting. A charging station at work could help to provide an alternative at-home demand.
Weighing the costs of EV charging
The decision to include EV charging stations at the property level must include the costs associated with the equipment and installation, which can be considerable, even with available incentives. Level 3 chargers, which can charge a car in under an hour, can cost more than $81,000. Level 2 chargers, which charge a vehicle within four hours, cost around $5,500.
Property owners may be surprised to learn their existing infrastructure can’t accommodate the requirements of EV charging systems, which tend to require higher electricity draws. Station options that can save money in the long run—for instance, by collecting and reporting usage data—will cost more upfront to purchase and install. Even if everything goes smoothly, there will be costs to point EV drivers to the right charging spots, including repainting parking spaces and installing new signage.
Once the charging stations are installed, then what? There are also decisions to be made about how charging stations can be optimized. Who is authorized to use the charging stations and when? Will charging stations be monitored by building apps and reservation tools? Or will drivers be left to find their own empty space, which may reduce their willingness to “plug in” at the property? Will office tenants have to relocate their vehicles once they are charged? Or will the spot be theirs for the day, even if it reduces availability for others?
These are important considerations to ensure maximum value is extracted for the consumer, the property owner and the environment. While demand for EV charging is high and expected to grow, property owners will soon be competing with government programs, private companies and private charging networks to meet this need and differentiate their space. Those who make the decision now may notice a considerable advantages over their competition.