EV Charging is Real...In Some Places
Mobility trends are impacting the role of parking as a key community resource - especially when it comes to EV charging. No longer a “nice to have,” electric vehicle charging is fast becoming a necessity.
When analyzing the data from where we’ve rolled out EV charging in our managed portfolio, the demand is real. We foresee this demand only increasing as batteries improve and provide greater range and overall performance. There’s also a growing intensity in competition, as other automakers join an EV market long dominated by Tesla.
Now, automakers everywhere are racing to release all-electric models, which will make up 32% of all vehicles sold by 2030. As electric vehicles go mainstream, parking operators must plan for a time when 3 out of 10 customers are likely looking for charging alongside a place to park. It’s an entirely new dynamic to the “convenience” narrative: drivers want to park close to their destination and want their cars charged and ready to go.
Considerations for parking operators and EV charging
Parking operators have to think about a few things when evaluating whether EV charging stations are suitable for their property:
#1: EV charging can differentiate you...
In the right markets and locations, EV charging sets you apart from others. It can be a way to strengthen your ties with your customers. By providing more services, you become more useful - and thus indispensable in their day-to-day lives.
There’s also the added advantage of making your parking lot or structure more appealing to competitors’. After reading the lengths some EV owners go to park their cars while in public garages, it’s evident that advertising EV chargers can influence decisions.
When a driver has the choice of charging versus unplugged, most will choose to charge. It’s a peace-of-mind thing that diminishes range anxiety or the fear of running out of battery power before reaching a destination.
#2: ...but isn’t an instant moneymaker
Even as EV chargers can differentiate you in a competitive market, it’s not likely that EV charging will become a key revenue stream. The reality is that it costs money to install and maintain these stations, even as there’s not yet huge demand.
Most parking structures won’t have sufficient electricity to charge EVs at scale, and chargers require reliable network connectivity, which means potentially costly improvements. And, especially if you work with a partner to manage the installation, maintenance, and consumer-facing app, there’s not often a ton of profit. At least not yet.
We've strategically uncoupled the charging station and payment network to make implementing EV Charging Spaces even more efficient. By leveraging lower cost non-networked terminals, we enable open access to these spaces as virtual "products & services" via our cloud-based platform; forgoing the costly smart networked hardware and can generate more revenue even faster. The benefits are flexible pricing and access control with scalable infrastructure that's more capital efficient.
Once we start seeing market penetration at over 20%, the economics will gradually change. More demand means more potential opportunities to turn EV charging into an incremental revenue stream. At scale, parking operators are well-positioned to become the gas stations of the EV era!
Some operators will find added benefits in the tax code. Depending on location, there are tax incentives for installing electric vehicle charging stations. In the right combination of demographic, location, and tax credits, EV charging could spell profits for parking operators.
#3: Focus on your overnighters
EV charging doesn’t make sense for every property type. There are specific use cases that make the most sense for EV charging: Residential monthly permits, colleges, and hospitality-related uses, where people park vehicles at the facility overnight—basically, any areas with frequent overnight parking.
You can estimate eventual demand manually: monitor how many vehicles are on your facility at midnight and then use EV penetration percentages to get a rough baseline of the number of charging stations.
Of course, some office-goers may also prefer to have EV charging stations - however, since they’re usually only commuting to and from work, it’s less critical. It’s mostly those overnighters that need to get a full charge before unplugging in the morning.
#4: Stay flexible and avoid lock-in
Even if you don’t see the immediate need to add EV chargers, you may need to future-proof your property. Depending on your local regulations, you may eventually need to support EV charging to some degree.
You’ll also want to consider interoperability. Many charging systems are closed, which means that only some customers can use them. You don’t want to be locked into whichever vendor installs your chargers, as you may find better network software elsewhere.
There’s an open-source communications standard for EV charging stations and software called OCPP, which stands for Open Charge Point Protocol. It’s a universal standard that ensures that OCPP-compliant charging stations and software can talk with each other. With OCPP tech, you’ll be assured of interoperability so you can make changes to your tech in the future without getting locked into a closed system.
So keep flexibility top-of-mind: you need to make sure that you aren’t locked into a poorly-performing provider or stuck using a service that hasn’t kept pace with the needs of EVs. It’s a rapidly changing industry - and you need to be able to adapt quickly! Flexibility and adaptability will protect your EV charging investment for the long term.