With the increasing rate of electric cars on the road, there is a gradual transition from using gas stations to patronizing electric vehicle charging stations.
Generally, this is a good opportunity for individuals in hospitality, real estate, and other business ventures to explore the EV charging business.
However, the Big Question is – Are EV charging stations profitable? The short answer is “Yes!” Nonetheless, let’s take some time to look into why establishing an EV charging station can earn you some good money, especially in the long run.
Are EV Charging Stations Profitable?
If you’re a business-oriented individual living in a city where most residents drive electric cars, you would most likely consider starting an EV charging stations business.
However, it is crucial to first of all find out whether the EV charging stations business is profitable. Owning a charging station is absolutely a profitable business. It can be a stand-alone income source or a booster for your existing business.
In other words, besides the direct income you would earn from owning an EV charging station in your current business premises (hotel, restaurant, etc.), the charging station will attract more people who will eventually patronize you by opting for any other products or services you offer as they wait for their car battery to charge fully.
Many EV owners, especially those on long trips, still use commercial charging stations whether or not they have a home charger to plug in. This is due to the speed of charging at the station.
Even if you have a Level 2 EV charger installed at home, you can only enjoy around 3 – 46 miles of range per hour.
So, while it is convenient for electric car owners who commute within their city, especially to and from work, relying on a home charger alone may not be ideal for someone who regularly goes on long trips.
Also, under the Inflation Reduction Act, businesses are entitled to a tax credit of about 30% of the total cost of hardware and installation of EV chargers. That’s a fantastic opportunity for anyone thinking of investing in charging station.
How to Make Money from EV Charging Station
With over a million electric cars on the road in the United States, there are several strategies you can use to make money from an EV charging station investment venture. The following are some tips you can implement.
Add your charging station on a map
Some electric cars like Tesla are fitted with Trip Planner software that helps the driver program a supercharger so that available charging stations automatically appear on the touchscreen as they go on their trip route.
Besides the general listings on Google Maps, there are specific apps, such as Open Charge, PlugShare, and Charge Hub that electric car owners use to track charging points along the route of their trip as they drive.
So, you can get on most of the apps and add your charging station to be easily accessible to electric car owners. This will boost the level of patronage at your EV charging station as more users will be directed to the location by the apps.
Market your other products
Generally, users who are “killing time” while waiting for their electric car to charge fully will most likely spend more money than expected.
In other words, you should take advantage of the opportunity to display your other products or services through strategic advert placement that can easily lure your EV charger user into taking a look.
From looking at a few things in your business premises, such users will eventually buy one or two things, which will further help you generate more income beyond what they pay for charging. This is a nice idea for individuals who run charging stations franchise.
Offer FREE charging for specific purchases
To boost the patronage of your other products, you can offer FREE charging when a customer buys a particular product from your store.
However, the profit on the product should be able to cover the cost of charging since the customer will not have to pay for charging after buying the product.
So, users intending to charge their EVs only may change their minds and buy the product with free charging as an incentive.
Offer a discount for long charging
Usually, people enjoy taking advantage of a discount, especially knowing that every day isn’t Christmas. So, you can reduce the cost of charging when users are going to charge for a longer time to encourage them to opt for a full charge instead of anything less.
EV Charging Pricing Strategies
There are several EV charging pricing strategies you can successfully implement. However, these two common methods stand out.
Cost per kWh
Generally, electric car owners pay for charging based on the amount of energy they consume during charging. If the average American pays $0.16 for electricity per kWh, you can mark up by around $0.10 or whatever amount you deem fit.
So, the total charging cost will be $0.26 per kWh. If you charge an EV that uses 34 kWh, the customer will pay; 34 kWh x $0.26/kWh = $8.84.
The flat rate pricing strategy involves charging a fixed hourly price and using it as a standard for calculating how much a user should pay.
For instance, if you charge $3 per hour and your station charges at 8 kW, a customer who uses 34 kWh will be charged as follows; 34 kWh/8 kW x $3/hr.
The above will be broken down to; 4.25 hours x $3 = $12.75.
How to Maximize Profits from EV Charging Stations
The best way to maximize profits from EV charging stations is to bill users using the flat rate strategy. Based on a survey from E source, most electric car owners are willing to pay $3 per hour against the regular $0.75 per hour for using a Level 2 home charger.
Since EV owners desire convenience and time conservation, especially long-trip drivers, they will be willing to pay the flat rate. This will even thrive more in a location where EV chargers are in high demand. The fear of running out of energy on a trip will compel EV owners to pay the price.
Why Do EV Charging Stations Fail?
Electric vehicle charging stations fail due to software malfunction, payment errors, and vandalism.
EV chargers are built with functionalities that rely on a stable network, optimum software performance, etc. Any glitches within these operations can alter the performance of the electric car charger.
Also, due to the high demand for electric car chargers, dubious folks who are out in search of things to steal and resell for profit can take advantage of an EV charging facility of a careless owner.
Undoubtedly, technological advancement comes with a series of opportunities, and the electric vehicle industry has proven profitable.
If you were asking, “Are EV charging stations profitable?” This article has revealed numerous strategies you can implement to make money and maximize profits in this business.
Nevertheless, you may want to take some time to draw up a business plan and critically analyze the electric car charging stations business opportunity to know the bolts and nuts that will help you achieve your goals at the end of the day.