Electric vehicle chargers, or EV chargers, are starting to pop up everywhere as the need and the want for them will grow. Some people have jumped on this train and put up their own EV chargers to attract customers and to make money. Generally, these chargers are even cheaper than gas when it comes down to cost per mile.
How do EV chargers make money? EV chargers make money by charging customers a set rate per kWh to charge your vehicle. The rate they charge is up to 300% above what the local power company would charge for the same amount of kilowatts, and can also be determined by the time of day, since power costs less at night due to demand shrinkage.
There are a variety of different companies that make their money from EV chargers and they are continuously expanding. Some of these companies sell subscriptions to their charging network to make money, while others rely on the standard of just marking up the electricity they sell to consumers.
Usually, larger companies are the only chargers that will have subscriptions available for them while smaller EV charging or individual EV charging stations will go the route of marking up the cost of electricity when it is used. There are tactics to both sides but both of them generally still profit and that is what matters.
Many businesses are starting to look into having EV chargers installed to attract customers and increase their own sales, making it a double kind of business for many owners. Some EV chargers have flopped however as they are not always used and the placement of the stations can truly decide whether or not they fail.
How Do Public EV Chargers Make Money?
Public chargers can be found in a variety of places and are continuously being installed all over the country. Public chargers can be owned and operated by large companies in a network or may just be owned by a single person and not a part of a large network. How much of their money will vary depending on what charger you use and what company owns the charger.
The easiest explanation is that the chargers pay the electric companies for the power that they use, then there are two techniques that they will use to make their money. The companies will either just mark up the price of the electricity that they paid for or they will have a set rate for the amount of time that the car is connected to the charger.
Some larger networks of chargers have subscription services or a larger single payment that will allow the use of their network, you will still have to pay for the electricity you use but it is generally at a reduced rate. These prices for subscriptions can vary anywhere from $4 to $8 a month and include a variety of benefits depending on what company you go with.
It is a good idea to do research on different types of networks and chargers in your area so if you do subscribe to one of these networks, you know which one to go with and how you can fit it into your schedule. Some of these networks will also just make you pay a single upfront fee which can range from $10 to $50 and, again, will give you a variety of different benefits depending on what company you go with.
It is important to note that there are some public EV chargers that are still for free or have a reduced rate. These chargers are generally meant for employees or others as an incentive to “go green” and purchase an electric vehicle. These are slowly fading out as electric cars become more common in society but it is not impossible to find and use one if you are an employee of the establishment that has had them installed.
These chargers won’t make money as I mentioned before; they are purely to incentivize people to buy electric vehicles. These are usually not readily available for public use and more commonly you will be able to find EV chargers that are from a larger company that is doing it for profit.
How Much Markup Do EV Chargers Have On Average?
Depending on the company and where it is located, the markup on EV chargers varies greatly. It is good to expect a markup of around 300% when it comes to public EV chargers. This is still cheaper than gasoline when it comes to cost per mile, with electricity costing 3.3 cents per mile and gasoline costing an average of 15 cents per mile, but this cost will vary depending on the vehicle’s miles per gallon but will not be able to beat electricity cost per mile. This is both a good thing for business owners as well as people who drive electric cars as it is cheaper than gas and is more profitable.
EV chargers, like gasoline, are not the biggest profit turners. You are still probably paying less than a dollar per kilowatt-hour. Their markup is higher than gasoline but they are not making extremely large amounts of money as public chargers just don’t get used nearly as much as gasoline is being purchased.
It is probably best to expect this to stay generally the same for the future as home charging is more popular and much cheaper, making it difficult for some public chargers to turn a profit at all. As the roads start filling with more and more electric vehicles, we may see a change in this pattern but expect it to stay the same until electric vehicles really start to take off.
If you do some research into most products in this business, then this markup doesn’t even come close to the biggest markup out there. It may seem a little high but in actuality, it really is a very average markup in the business sense. Gasoline is only of the few products that nearly makes no profit with around 15 cents of profit with each gallon sold and with the additional cost of transporting and other various costs many companies are only making about 2 cents of profit on each gallon of gas sold. Since gas is usually sold in such large quantities these companies still are able to make plenty of money.
Who Can Own A Public EV Charger?
In theory, nearly anyone, with the write licenses and preparation, could own a public EV charger and probably make money off of it. All you need is either some land or permission to install the chargers in an area as well as a business license and any other licenses or permits that your city or state may require.
Each state and city may have some special incentives for installing chargers or special permits that may be needed so it is important to check local laws and guidelines if you plan to install any chargers. Truthfully, it shouldn’t take an excessive amount of time and with some effort and money nearly anyone could own some public EV chargers.
One person even told their success story of buying some level 2 chargers and just installing them in an area with a large traffic of electric vehicles. All they did was purchase the chargers and pay an electrician to install them outside of their business.
After doing so, not only did they receive more customers into his business, but he also made money off of the chargers that they parked their electric vehicles at. Now not everyone is as lucky as this and it is important to do lots of research into EV chargers before you make any choices. People shouldn’t always expect success when it comes to owning public EV charging stations but that doesn’t mean that everyone couldn’t own one.
Just because everyone could in theory own a public EV charging station does not mean everyone can or should. Of course, there are financial and time limitations in most people’s lives that would prevent them from owning one of these businesses but there are also just some people that shouldn’t own public EV charging stations.
These stations are not always a success and lots of research and thought should happen before someone decides to own a public EV charging station. Although everyone should venture out of their comfort zone and try something new, sometimes things like owning a public EV charging station are a little too aggressive and should be thoroughly thought over.
How Much Usage Do EV Charging Stations Get?
Usage is one of the biggest problems with public EV chargers. Generally, public EV chargers don’t get used very often when compared to other sources of power for electric vehicles. One study found that public charging stations are used less than four percent of the time when compared to other charging options.
Because of these, a lot of charging stations have even been taken out of service because of their lack of use. This is especially common in level 2 chargers which take a much longer amount of time to charge your vehicle when compared to level 3 chargers.
Charging at home and even while at work are the two most common options when it comes to EV charging. Because people are unable to take time out of their day just to charge their vehicle this leaves many EV charging stations practically unused, especially when they are located away from a convenient location.
Level 3 chargers also tend to get more use when compared to level 2 chargers but still in smaller amounts when compared to home and work charging. Level 3 chargers can quickly charge an electric vehicle in less than an hour making them more popular for long-distance road trips in electric vehicles and really more popular in general. Still, if you plan to invest in an EV charging center it is best to do lots of research if you plan to turn a profit.
You can install level 3 chargers but these chargers usually cause large sums of money to even install a single charger. With the cost and installation of the charger costing around $100,000, these chargers are usually only installed by larger companies.
Not many electric vehicle owners will even use these chargers if given the choice however as they are the most expensive chargers to use and although they are the faster chargers on the market currently, people don’t want to take time out of their days to just charge their vehicle. Level 3 chargers mainly come into play when people want to take long-range trips in an electric vehicle as they are the most capable of quickly charging an electric car and getting it back onto the road.
Are EV Chargers A Good Investment For An Individual?
There are a lot of different factors and a lot of research that go into this investment before you choose to go forward with it. Larger networks of EV chargers already have a hold on superchargers and fast chargers, meaning it may be smarter to work with the larger companies if you really want to install your own fast chargers. If you do not want to be connected to these larger companies, you are able to buy your own fast EV chargers. However, this will usually require a large initial investment of money to make this work.
The more common option for most EV charger owners is having level 2 chargers. These chargers can make the owners money, but they can also be put in strategic places to increase customers and increase the money flow that other businesses around the chargers are making while also making money themselves.
By putting them in business places such as shopping complexes or near restaurants you can, in theory, attract more customers as charging takes time, and to pass the time EV owners will go into the surrounding shops or restaurants while their vehicle is charging. This means that EV chargers could be especially beneficial to people who already own businesses as they allow them to make money from both the chargers as well as their other businesses surrounding the chargers.
If you were asking my personal opinion then I would tell you that your money will probably be better spent elsewhere. Public EV chargers just don’t get nearly as much use as they need to if you really wanted to make a business out of it.
Some people have done well in this area and have been able to expand their chargers across the nation but for many, their EV chargers stay dormant for most of the while. If you are an owner of a business and there are a large number of electric vehicles in your area and you do proper research into the chargers, then yes, I do encourage you to invest in them. But truly make sure that it is something that you want to do and don’t expect large returns even if it does take off.
How To Start An EV Charging Business?
The process of starting an EV charging business should be very similar to the process of starting any sort of business with some exceptions. It does take time, effort, and money to start a business, and an EV charging business is definitely not an exception to this rule. Make sure you are really committed to this and have a plan before you start going in this direction. If you know this is something that you want to do and something that interests you then below are some steps that can get you set in the right direction.
- Write a business plan
- Choose your area and target
- Get a federal tax ID and business license
- Open a business bank account
- Finance your business
- Get a business credit card
- Run and maintain your business
A variety of different businesses and people can help you with all of this if that is what you want. Simple searches on the internet can instantly get you headed in the right direction when it comes to starting your own business. It is also important to look at how you will finance this business as this business is not known for its immediate payoffs and usually don’t turn over large amounts of cash.
Although money sometimes can scare people, it is important to make sure that you have a way to finance everything so you don’t end up accidentally losing lots of cash simply because you ran out of money to get to your end goal. Go over your plan with different people who can help you to make sure any hiccups that are encountered can be handled along the path.