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Should Your CRE Property Install EV Charging? Yes, and Here's Why

EV Growth Rate Fuels Need for Charging Stations in Commercial Properties

The market for electric, non-gas vehicles is steadily increasing every year. In 2022, 5.7% U.S. car sales were fully electric, which is up from 3.2% in 2021. In California, during the 2nd quarter of 2023, 1 in every 4 cars sold were zero-emission vehicles (ZEV). The International Energy Agency projects that sales of electric vehicles will increase by 60% in China, the EU, and the U.S.


What is compelling this sudden increase in consumer demand for electric vehicles?


Wider range of EV models on the market

Legacy car manufacturers have begun rolling out consumer EVs in 2023. For example, Chevrolet announced that the Bolt EV is returning at an affordable price. Kelly Blue Book has a list of electric vehicles that are entering the market in 2023 and 2024.


Beyond this, smaller electric automotive manufacturers like Fisker, Indi, and Lucid are hitting their stride. Not only are these vehicles fully electric instead of hybrid, but they’re also at lower, affordable price points than early entrants, including Tesla.


Higher average retail gas prices

On average, retail gasoline prices are notably higher at a price point of $3.71/gallon in July of 2023. Gas prices reached an all-time high in June of 2022 at $5.03/gallon. With the gas price average stabilizing at around $3.50/gallon, the demand for a cheaper, environmentally conscious alternative has increased.


Improvements in technology

As battery technology is improved with EVs, so does the maximum range of a vehicle increase. In 2011, the median range of an EV was 68 miles whereas in 2020, it’s 259 miles.6 Newer models, such as the Lucid Air, are capable of driving 516 miles on a charge.


Additionally, EVs are noted for having less upkeep and maintenance costs when compared to gas vehicles. According to Consumer Reports, these savings can be anywhere from $6,000 to $10,000 over the lifetime of the vehicle.


Government policy changes

In November of 2021, the Infrastructure Investment and Jobs Act allocated $7.5 billion to building a nationwide electric charging network. The focus of this act has initially been constructing a fast-charging network along the interstate for easier cross-country travel.


Additionally, there are tax credits available for the purchase of new EVs until 2032.


So ... Who Should Consider Adding EV Charging Stations?

With such high projected EV industry growth, more public and commercial property owners and managers are exploring whether to expand their infrastructure to accommodate EV charging. CRE developers and property managers are exploring the impact an EV charging station will have on a property and its marketability versus operating costs.


Charging stations can be found anywhere from public parking lots, hospitals, private garages, and even apartments or houses. The U.S. Department of Energy provides an EV charging station locator, which consumers can use to find fuel and charging stations throughout the U.S.



There are a few different benefits to installing commercial charging stations in more public areas. It shows a commitment toward environmentally friendly initiatives. Creating infrastructure for EVs is a way to demonstrate this commitment to investors and customers alike.


There are also many local and federal government initiatives toward increasing EV sales in urban areas to reduce fossil fuel use. To this end, the government is offering incentives, such as grants, for installing EV chargers. There are also tax credits available for offsetting the cost of installing charging stations. 45 states have such incentives for EVs.


As far as installing an EV charger at home, the #1 reason to do so is convenience. Public chargers have yet to be widely adopted in the same way as gas stations, so it’s necessary to have a home charger if you plan on driving an electric vehicle. This extends to apartment and condominium developments, which are finding that they can attract more renters by offering EV charging in their parking lots and garages.


An EV charging station can even boost a home’s value if a prospective buyer is also an EV driver.


Will EV Chargers Attract CRE Tenants?

Many rental communities, such as older apartment units and university living, still lack EV chargers. This leads to a unique opportunity for a rental company to set itself apart from the competition.


Installing EV chargers can be a simple way to attract low-risk tenants who have stable finances and drive an electric or hybrid vehicle. If installing and maintaining EV charging stations are a concern, consider third-party charging companies that aid with the installation of the chargers without costs to the owner.


For office buildings, installing EV chargers gives the property an edge over similar locations and buildings. This helps both the renting business attract top employees and the property finds businesses that are committed to initiatives that support their employees.


Even managers of single-family homes may benefit from installing an EV charger. Whether you’re planning on renting or selling, EV chargers may add value to a home.


EV Charging Basics: Stuff You Need to Know

An electric charging station is the only way to “fuel” an EV or hybrid vehicle. There are 3 different levels of chargers on the market that supply from 120v to 500v of electricity to the vehicle. The level of the charger is directly tied to the voltage, which measures how much electricity flows through a system. A higher voltage means more electricity and a faster charge.

  • Level 1 EV Charger — 120V, slowest charge at 3 to 5 miles of charge per hour. Works well with hybrids that have smaller batteries. Too slow for daily charging. Never used with public chargers. Can be used through standard 120v outlets.

  • Level 2 EV Charger — 240V charge at 12 to 80 miles of charger per hour. Most common charger in residential housing as it conveniently will charge overnight. Sometimes found in the public. Most use a 40-amp charger but higher amps are available with a dedicated circuit.

  • Level 3 EV Charger — 400V to 900V charges 3 to 20 miles of charge per minute. This uses direct current (DC) instead of alternating current (AC) for extremely fast charging. This is almost never found at a residential location as a high-voltage supply is needed. It’s also very expensive to set up.

To determine how many chargers a property needs, a property developer or manager first needs to know how many EVs are likely to visit a property and use the charger within a given time period. According to Mark Janda, senior VP of AvalonBay Communities, "You need more EV charging spaces than you think." At a Bisnow panel event, Janda said AvalonBay is considering putting EV charging stations in 25% of its apartment complex parking spaces. For businesses or rental properties, this may be as simple as taking a survey of the vehicles that employees drive to get to work and whether or not they’re likely to use the EV charger on a regular basis. Again, the DOE's database can be a good start for researching EV demand in the U.S.


For commercial areas, determining how many EV chargers to install is a bit more complicated. Taking samples of “average” traffic for a week may be necessary in order to find an accurate percentage of visitors that utilize electric vehicles. Keep in mind the changes in seasonal customer volume as well as the difference between weekday and weekend customer usage. Partnering with a third-party charging service can be beneficial to prevent over-installing too many chargers or under-installing chargers to where they don’t have a meaningful impact.


How Much Do EV Charging Stations Cost?

According to Greenlancer, the cost of a charger can cost anywhere from $1,000 to $10,000 per station. This cost will vary depending on the level of charger that you choose, as well as how much federal tax credit you receive. Consider searching for federal and state incentives for providing EV chargers. If you’re installing an EV charger at home, you may see why this makes a notable impact on property value.


The U.S. Department of Energy estimates that charging stations maintenance costs up to $400 annually per charger. The cost of the power itself will vary depending on your energy plan, where you live, and when you plan on charging your vehicle. Kelly Blue Book estimates that if you use 375 kWh in a month charging your vehicle, it would cost around $60 per month.


If you’re installing EV chargers in a commercial or rental community, you have to consider the business model of EV charging stations.


Some third-party EV charging businesses incorporate fees at the charger for a customer to operate it. For this reason, third-party EV chargers will lease the parking spaces from the property owner, as they’re technically running a business through them. This fee may range from simply the operating cost of the station to a for-profit model that has a higher fee.


Other communities will provide EV charging as an amenity as part of the rental fee. In this model, tenants get a certain amount of time that they can charge their vehicle for free. This can be an excellent way to boost your revenue while providing a convenient service to tenants. Some commercial areas also use this model, but it’s generally only beneficial to businesses with an average profit per customer that’s higher than the operating cost of an EV station.


Are You An EV Charging Company Looking For Leads?

We've created this guide for CRE property owners, managers, and developers, who are considering adding EV charging to their buildings. If you are an EV manufacturer, seller, installer, or service provider, and you'd like to connect with CRE properties, Biscred's datasets are fast, updated regularly, and easy to use. Simply set your filters based on geography, property size, asset type, and more, and start prospecting today.


For more EV market news, follow Bisnow.


 

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