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The electric vehicles market is experiencing unparalleled growth, with several factors contributing to this phenomenon such as growing environmental consciousness, development of battery technology, and significant government incentives. As of 2023, there are more than 7 million EVs on the road, which puts to the forefront the issue of adequate EV charging infrastructure. The EV charging infrastructure deployment has developed from being something essential to a growing business opportunity as the global EV charging station market is forecasted to grow from $11.74 billion in 2020 to over $27.7 billion by 2027.
The size of the EV charging market is determined by the growing number of electric vehicles, the prodding from governments for cleaner transportation systems, and the development of EV charging technology that reduces charging time and increases user convenience. Commercial real estate owners, shopping malls, and even gas stations are now not only players but also main stakeholders in this changing landscape.
Home charging is the main way for EV owners to plug in their cars and recharge the battery. This needs a home charger installation at the garage or carport. These chargers can be found from 3.7 kW to 22 kW with a charging time of 6-12 hours, depending on the EV battery capacity. Level one chargers are standard 120-volt outlet and they can add about 4-5 miles per hour, while level two chargers need 240-volt outlet and they can add 25-30 miles per hour. The home charging solution is mostly completed by EV owners individually or in partnership with EV manufacturers or utility companies. They are only profitable to EV owners but not represent a viable business model for entrepreneurs.
Public charging stations are key to the widespread EV adoption, as they create an EV charging infrastructure. These stations are usually found in places with a lot of traffic, including shopping centers, parking garages and busier streets. They provide level 2 and DC fast charging options, and the latter is a 30-60 minutes’ charge for an 80% capacity. The public charging stations are the integral part of EV charging infrastructure and offer a great business prospect for the investors seeking to enter the market.
Charging stations at destinations are usually found at places where EV drivers are likely to stay for extended hours, like hotels, resorts, and offices. Charging stations that are equipped with Level 2 charging and are strategically placed to offer a convenient charging solution to EV owners when they are out of their homes. Destination charging stations can become a great amenity for those businesses which are keen to bring in their EV driving customers and employees.
The service provider model is a manner in which a third-party company will own and operate the EV charging stations at your location. Under this arrangement, the owner does not need to spend much at the beginning and also does not need to worry about the maintenance. The service supplier is responsible for the installation, management and maintenance of the charging stations with the property owner receiving a portion of the revenue generated from the charging sessions.
The collaborative investment mode implies a partnership relationship between the property owner and the EV charging service provider. In this scenario, the property owner is responsible for acquiring and maintaining the charging stations, while the service provider deals with the daily operations and client support. The owner of the property and the service provider agree on a revenue split model that is used to distribute the income generated from the charging sessions.
The full ownership model takes it upon the property owner to handle all the installation, management and upkeep of the EV charging stations. This model includes large upfront costs but it is the property owner who will keep all of the revenue from the charging sessions. The full ownership model offers the highest control and the most potential for long-term profitability but is also the most risky one and comes with the biggest responsibility.
Before investing in an EV charging station business, it’s crucial to define your goals and objectives. Are you looking to attract new customers, promote your brand, or generate additional revenue? Understanding your primary goals will help you determine the most suitable business model for your venture.
If you are mainly aiming at attracting and retaining customers or tenants, you may want to emphasize the importance of EV charging station by positioning it as one of the essential amenities. Providing convenient and reliable charging options is the way you can set your business apart from the competitors and attract the rising number of EV owners. The ICCT survey showed that an EV charging station could significantly affect consumer behavior and prompt them to visit a particular business. In fact, 50% of EV drivers said that they are more likely to check a business out when it offers charging facilities, even if that means they have to take a detour. This aspect is crucial in the hospitality, retail, and commercial real estate industries, as it can be a key factor in differentiation when offering such a convenient option.
EV charging stations can also do a great job of advertising your business. Through providing free or discounted charging to customers, you can not only attract them to your location, but also encourage them to spend more time there. This traffic is likely to become additional customers and to translate into more sales and profitability. Besides, your company will be associated with the green and innovative EV image which will help you to have a good reputation and to attract environmentally minded consumers. A Nielsen study which was recently published revealed that as many as 73% of world consumers would definitely or probably switch to eco-friendly consumption habits to reduce their environmental footprint. This trend is more predominant among millennials, as 83% of them are ready to spend more when they choose products and services that are sustainable. By incorporating EV charging stations into your business model, you can tap into this growing market of environmentally aware consumers.
For a list of top manufacturers to consider for your EV charging needs, check out our blog on Top 9 EV Charger Manufacturers.
As per the report published by Grand View Research, EV charging infrastructure market size is estimated to reach USD 147.94 billion by 2030 with a CAGR of 33.4% during 2022-2030. If getting a big income by EV charging station is the goal, then creating a comprehensive network of chargers is a must. Such a large EV charging demand is expected. The NREL study resulted in a finding of optimal number of public charging stations which is 0.57 ports per 1,000 vehicles. This implies that the number of charging stations should be proportionate to the number of EVs on the road. Every 1,000 EVs on the road should be supported by at least 57 charging ports. Through the smart placement of charging points in areas of high traffic and by offering competitive pricing as well, you can generate a reliable flow of EV owners and income that will ultimately be to your advantage. This method is a bit more expensive since it requires a solid plan and a well-designed infrastructure. However, it is also a way to gain long-term profits.
For more information on selecting the best locations for your DC charging sites, read our blog on 6 Important Factors to Consider for Profitable DC Charging Sites Selection.
The desired dwell time, or the amount of time an EV owner is likely to spend at your location, should be a key factor in determining the type of chargers you install. For businesses with short dwell times, such as convenience stores or fast-food restaurants, DC fast chargers may be the most appropriate option. These chargers can provide an 80% charge in just 30-60 minutes, making them ideal for customers who are in a hurry.
On the other hand, businesses with longer dwell times, such as hotels, shopping malls, or workplaces, may benefit more from Level 2 chargers. These chargers add 25-30 miles of range per hour, providing a convenient charging option for customers who are likely to spend several hours at your location. By aligning your charger selection with your customers’ needs and behaviors, you can optimize your EV charging station investment and maximize customer satisfaction.
Providing the free charging could be regarded as an efficient tool to increase and keep customers, especially those belonging to the hotel and retail businesses. Offering free charging as a bonus to your clients is a great way to differentiate your company from competitors and create a positive brand image. Nevertheless, it should be acknowledged that there are a few costs which are directly linked to providing free charging, this includes electricity and maintenance expenses.
The cost recovery pricing model is a tool for recovering the cost of EV charging stations installation and operation. This strategy includes calculating the price per kWh that will be needed for you to get your investment back after a certain period. The exact price will be determined by such factors as electricity costs, installation costs, and maintenance fees. This model, even though it might not generate big profits, could be enough to help you break even and offer your customers a service that is worth their money.
When it comes to the charging stations, which are operated by businesses, the price per kWh should be set a little higher than the cost you incur. This pricing model should be given a close attention and analyzed by the niche, your competitors and the operational expenses. With competitive rates and strategic location of your charging stations, you can have a steady customer flow and thus, generate more revenue. It is critical to periodically audit and modify your pricing strategy so that you can continue to earn profits and keep competitive in the market.
The pay-per-charge model is the most straightforward and common pricing structure for EV charging stations. In this model, customers are charged a set price per kWh of electricity consumed. This approach is easy for customers to understand and allows businesses to directly tie their revenue to the amount of energy dispensed. However, it’s essential to ensure that your price per kWh is competitive and aligns with your target market’s expectations.
Some EV charging stations charge customers based on the amount of time they spend connected to the charger, rather than the amount of electricity consumed. This model can be effective for businesses with limited charging points, as it encourages customers to move their vehicles once they are fully charged. However, it’s important to consider the potential impact on customer satisfaction, as some EV owners may feel pressured to disconnect their vehicles before they are fully charged.
Offering membership or subscription plans can be an effective way to generate recurring revenue and foster customer loyalty. In this model, customers pay a monthly or annual fee for unlimited or discounted access to your EV charging stations. This approach can be particularly appealing to frequent EV drivers who value convenience and predictability. However, it’s crucial to ensure that your membership fees are competitive and provide value to your customers.
Here’s a table comparing the different charging fees models:
| Pricing Model | Pros | Cons |
| Pay-Per-Charge | Easy to understand, revenue based on volume | May not account for variations in charging time or energy consumption |
| Charging Time | Compensates for time occupied, regardless of energy consumed | May be confusing for customers, potential frustration with varying charge times |
| Membership/Subscription | Predictable revenue stream, encourages customer loyalty | May not appeal to occasional or infrequent users |
Many local governments and utility companies offer rebates and incentives for businesses that install EV charging stations. These programs can help offset the initial costs of installation and make it more affordable to enter the EV charging market. By taking advantage of these incentives, you can reduce your upfront expenses and improve your return on investment.
EV charging stations can also serve as a platform for advertising and sponsorship opportunities. By partnering with local commercial businesses or brands, you can generate additional income through targeted advertising campaigns. For example, you could display advertisements on your charging stations’ screens or offer sponsored charging sessions. This approach can help you diversify your revenue streams and create a more sustainable business model.
The EV charging market presents a unique opportunity for businesses to tap into the growing demand for electric vehicle infrastructure. By understanding the various business models, pricing strategies, and revenue streams available, you can create a tailored approach that aligns with your goals and target market. Whether you choose to offer complimentary charging as an amenity, generate profits through a pay-per-charge model, or explore advertising and sponsorship opportunities, the key to success lies in providing a convenient, reliable, and cost-effective charging experience for your customers.
As you embark on your EV charging station business journey, partnering with a reliable and experienced provider like Beny can help you scale your operations and achieve your goals. Beny offers a comprehensive suite of EV charging solutions, including hardware, management software, and support services, designed to help businesses of all sizes succeed in the EV charging market.
By choosing Beny as your trusted partner, you can focus on growing your business while leaving the technical details to the experts. With a robust and reliable charging network powered by Beny, you’ll be well-equipped to meet the evolving needs of EV drivers and contribute to a sustainable future for transportation.
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