The Profit Potential of EV Chargers: A Closer Look at Your Investment

As electric vehicles (EVs) gain prominence on the roads, the demand for accessible and convenient charging stations has surged. For business owners, installing commerical EV chargers isn’t just a sustainable move; it’s also a strategic financial decision. In this blog post, we’ll take a closer look into the financial benefits of incorporating EV chargers at your business, provide insights into the potential returns, and explore how incentives can substantially affect your bottom line.

Charging Up Your Business

Embracing the transition to EV chargers offers more than mere accommodation for EV owners. It’s an opportunity to tap into a dynamic market and position your business as a forward-looking destination. Here’s why:

1. Attracting and Sustaining Customer Loyalty: By providing EV charging stations, you present a compelling incentive for environmentally conscious customers. Imagine an EV owner choosing your establishment over competitors simply because you offer a convenient spot to charge their vehicle while they shop, dine, or engage with your services.
2. Sustainability and Profitability Converge: It’s not just about environmental stewardship – your commitment to sustainability can translate into tangible profits. EV chargers communicate your dedication to a greener future, enhancing your brand’s image and resonating with consumers who prioritize social responsibility.
3. Creating a New Revenue Stream: Installing EV chargers opens doors to an additional revenue channel. With the freedom to establish charging fees, you can potentially cover costs and generate substantial profits. By thoughtfully setting prices and crafting enticing packages, your revenue stream could outperform initial expectations.

Example EV Charger Installation Project

Let’s crunch the numbers using an example cashflow projection. For this example, we’re going to create a scenario with a few different factors. Let’s pretend this business is an office building with 50 parking spaces. The property owner has a few employees and tenants who own EVs and knows this number is only going to increase over the next few years and wants to provide them with onsite charging. They decide they’d like to convert 10% of their spaces into EV charging spots. So, they install 5 dual port chargers to make sure that up to 10 people can be charging their EVs at the same time.

Here are the rest of the details for this hypothetical EV charger install project:

Business Type: Office Building

Charger Type: Level 2 Dual Port (meaning two cars can be charging on the same charger at the same time)

Number of Chargers: 5

Location: New York State

Business Owner’s Energy Costs: $0.10/kWh

EV Charging Fee: $0.30/kWh

EV Charging Fee Margin: $0.20/kWh

Average Number of Cars Using Each EV Charging Station per Day: 3

Average charge in kWh per EV station Use: 30 kWh

EV Charger Projected Lifespan: 8 Years

Installation Costs: For this exercise, we are going to estimate that it costs on average $30,000 to install each charger. This includes the hardware, software, and installation costs. This costs can vary drastically based on each businesses location. Variables that pay a huge factor in installation costs are location of the installation, proximity to the electrical source, wall mounting the chargers vs. a free standing pedestal, and any electrical upgrades the building may need to handle the chargers consumption.

Incentives: Another variable we want to account for in this example is incentives. For this example, we are going to assume this business is located in NY state and qualifies for the state tax credit. The New York State Tax Credit rebate is generous and provides a rebate of $5,000 per charger installed. This will help with the business owner’s investment with a significant reduction.

Now that we have all the info, let’s take a look at the cashflow.

 

Analyzing the Numbers: Example Commercial EV Charger Cashflow

 

1. Initial Investment with NY State Rebate:
   • Total investment for 5 Level 2 chargers: $150,000
   • New York State Tax Credit rebate: $5,000 per charger × 5 chargers = $25,000
   • Adjusted initial investment: $150,000 – $25,000 = $125,000
2. Generating Profit:
   • Average charging fee per session (margin): 30 kWh × $0.20/kWh = $6
   • Daily revenue potential (5 chargers × 3 sessions/day × $6): $90
   • Monthly profit potential (30 days): $90 × 30 days = $2,700
   • Annual profit potential: $2,700 x 12 months = $32,400
3. Calculating Returns:
   • Payback period: Adjusted initial investment / Annual profit
   • Payback period: $125,000 / $32,400 = 3.8 years
   • Overall Return on Investment after 8 years: ($32,400 x 8 years) – $125,000 = $134,200

That’s a pretty good return on investment and payback period by just simply installing EV chargers on site at their office building. With the ever increasing rate of EV adoption across the US, business and property owners should really explore the installation of EV chargers.

 

Optimizing Your Investment

Maximize your investment by considering these strategic pointers:

1. Strategic Placement: Select optimal charger locations to attract attention and traffic. Placing them near entrances or high-traffic areas can enhance visibility.
2. Engage with Charging Networks: Partnering with an EV charging network increases accessibility, as users can easily locate your chargers through apps or online platforms.
3. Marketing Your Charging Services: Utilize your website, social media, and physical signage to promote your EV charging services. Offering special promotions or discounts can further incentivize users.

Investing in EV chargers isn’t just a way to provide a service; it’s a strategic financial move that aligns with sustainability and profitability. Incentives, like tax credits and rebates, significantly impact the payback period, making your investment even more enticing. As the EV market continues its rapid growth, embracing this trend positions your business for long-term success.

It’s important to note that while the presented figures are based on estimates, the actual results might vary. By adopting EV-friendly practices, you’re not only participating in the evolution of transportation but also securing a brighter future for your business.