EV Charging: An Opportunity not to be Missed
By Nick Stanton
These last few years have seen unprecedented technological innovation in the parking, transportation, and mobility industry. Previously, an exciting new technology-solution in our industry was announced, maybe once or twice in a decade. Now, it seems, we are seeing exciting new solutions pop up much more frequently. Few could have predicted how explosive the EV Charging markets would become in our post-covid world.
EV charging is a fast paced, exciting, new technology, and it is wrought with anticipation, confusion, misinformation, and even exploitation.
We make no claim to be EV charging experts. In fact, doubtfully anyone really is… as of now. The EV charging landscape is confusing at best and is moving much too fast for anyone to pin it down. In the last year, Athena Partners Strategy Group (Athena PSG) has been approached numerous times with questions on EV charging by various municipalities, government agencies, real estate companies, educational institutions, and private property owners, we will call them Proprietors in this article. These early adopters have learned some hard lessons; much of which is the basis of this overview.
Not So Fast!
Why can’t we see super-fast EV chargers in every parking lot, workplace garage, shopping mall, and street corner? Are we going to see them anytime soon? Unfortunately, the reality is that while the EV revolution is happening, it will likely take many more years of large-scale changes to get up to speed.
Fast charger (Level-3) installations require enormous power draw, requiring heavier electrical equipment and often challenging installation. Beyond the local issues, we also must remedy the shortcomings of our aging electrical infrastructure and antiquated power grid at the regional as well as the national level. Even with the federal grant monies flowing in, these upgrades will take many more years to reach a minimally adequate level, capable of sustaining large-scale rollouts of EV chargers – yet alone Level-3 fast-chargers.
Proprietors should spend time looking into the several federally funded grants available. These grants are designed to incentivize investments into EV charging and the much-needed infrastructure, as mentioned above. Athena PSG can help you navigate the intricacies of federal grants.
Ready To Buy EV Chargers?
Before deciding to add EV chargers to your portfolio, let’s review the basics:
- Level-1 Charging: Generally used for at-home applications of standard 120-volt AC outlets. With 3-5 miles of EV range per hour, these charging systems are best suited for overnight at-home use.
- Level-2 Charging: Found in private, public, and commercial settings these chargers are more efficient than Level-1 chargers, producing 18-28 miles of range per hour. This means that Level-2 chargers are great for “topping off,” and can fill-up most EV batteries in just a few hours.
- Level-3 Charging: These high-power systems can be found at Direct Current Fast Charging (DCFC) and Supercharging locations. Level-3 fast-chargers require huge power draw but are capable of charging vehicles at a rate of 3-20 miles per minute! Magnitudes faster than Level-2, these stations can rapidly charge most batteries to full capacity in time periods not significantly longer than a typical a gas station fill-up experience.
- Wireless Charging: An experimental technology with much to work out but with exciting industry implications; proprietors should certainly keep an eye on this.
Installation and auxiliary equipment:
- Installation and electrical runs: Thanks to the boom in EV demand, there is now an entire economy dedicated to satisfying it, including the ever-growing segment of sustainable and green-tech installations. Some EV charging companies will even roll the pricing of the installations and buildouts into several procurement mechanisms.
- Transformers and switchgears: Often overlooked, transformers and switchgear are essential pieces of equipment in the EV charging infrastructure. Ignore them in your planning stage at your peril. Depending on the age of the existing infrastructure of a planned EV charging site, an upgraded transformer and/or switchgear may be required. If a proprietor is looking to scale to a larger EV charging deployment in the future, a more robust set of equipment will be needed. Consider procuring your transformer and/or switchgear based on your future build – not your current one; thank us later You should consult with the local electric utility to assess your situation. This is an integral part of Athena PSG’s service offering.
In many cases, the price of critical equipment and installation can be rolled into a proprietor’s total EV project purchase and can be handled with various procurement mechanisms. Several types of grants are also available to ease these costs further.
We have identified and successfully applied several innovative procurement mechanisms for EV charging, including Capex, SaaS/CaaS, and various revenue split options.
EV Charging Models for the Parking Industry
Proprietors must study the available EV charging models. EV Charging companies offer these models designed to fit various needs. Some of these models include the opportunity for the proprietor to share in revenues from the EV charging stations, but not all do. Here are some examples of how a proprietor can utilize EV charging in their portfolios and even turn their investment into a profit generator.
- Leasing of existing parking assets: In this arrangement the proprietor leases parking spaces to a charging company who will commonly pay for chargers, installation, infrastructure, and corresponding utility bills. The charging company collects all the transactional revenue and pays the agreed upon lease to the proprietor for the use of the parking assets. The proprietor will not collect any revenues from these charging transactions. In most circumstances, the leased parking spaces are dedicated to EV charging and require expensive enforcement to prevent Internal Combustion Engine (ICE) vehicles from using them.
- EV Charging as an amenity: In this model the proprietor will pay for chargers, installation, infrastructure, and corresponding utility bills. The charger is free to use by anyone paying to park at the property. There is no direct EV charging revenue generated for the proprietor, although the underlying logic for this model is usually to increase traffic overall. This means that the proprietor is technically subsidizing the parker to park in their parking spaces. Free EV charging stalls are generally dedicated spaces which require expensive enforcement to prevent ICE vehicles from using these spaces.
- Charging by Kilowatt-hour: Probably the most common setup to date. The Proprietor will pay for chargers, installation, infrastructure, and corresponding utility bills. The parker is charged by the kilowatt-hour (kWh). Proprietors can add margin to the kWh charge and generate a reasonable profit. However, in general utility companies are not in favor of other entities reselling their power. If a proprietor has many charging stations reselling kWh, a utility company may force price caps, or other restrictions. These EV parking stalls are usually dedicated and require expensive enforcement to prevent ICE vehicles from using them.
- Charging by the hour as a parking session: Recognizing the benefits of EV charging as a parking session, some proprietors have chosen a model designed around time not kWh. Like a parking meter, when a parker pulls up to an EV charger, they will begin a timed charging session. By charging for time vs kWh, the entire charging experience for both proprietor and parker is simpler and more efficient. Using timed sessions can create additional revenue by allowing for on-demand parking rates based on data collection of time-demand and usage patterns. Hourly parking stalls are generally dedicated to EV vehicles, but they do not need to be. For this model, proprietors can choose from several workable Athena PSG strategies to simplify or even eliminate the need to restrict ICE vehicles.
Alternative EV Charging Pathways
Proprietors cannot afford to wait any longer to begin their EV charging journey. Nevertheless, it is important to keep an eye on other evolving technologies that may in the future upset the current paradigm. One such solution that has already shown some promise is battery-swapping.
A Rewarding Journey
What every proprietor should do before beginning their EV charging project:
- Educate themselves on the basics
- Thoroughly vet the various EV charging companies
- Understand the various procurement mechanisms
- Plan and futureproof infrastructure
- Choose a charging model
- Scale safely, efficiently, and profitably
Among the many revenue generating assets proprietors own, parking spaces/stalls are some of the most valuable when utilized properly. Adding an EV charging solution requires due-diligence and extensive planning, but when done correctly can be very rewarding for both the proprietor and the parking public.
Much has been learned in our meetings with early adopters of EV charging. True understanding of the real-world consequences of these hard-learned lessons, evaluating the various EV charging companies and available infrastructure technologies, and digging deep into actual routines of the public have enabled us to offer our assistance for the build-out, support, and scale-up of a successful EV charging portfolio.
About Athena Partners Strategy Group
Leveraging a specialized network of partners, APSG is a governmental relations and technology consultancy organization. We assist in developing new business opportunities and launching solutions across the parking, transportation, curb management, rideshare, law enforcement, public safety, and sustainability sectors. More at athenapsg.com
Nick Stanton is managing partner at Athena Partners Strategy Group. He can be reached at email@example.com.