Electric cars are obviously becoming more and more popular. Charging stations are quickly becoming in higher and higher demand as more EVs are on the road. The growth of electric cars is expected to continue the same trend it has been following. As such, you may be wondering if you can make some money starting an EV charging business.
How do I start an EV charging business? You can start an EV charging business by applying for a business license from your local government agency, create an LLC, set up a business bank account, take out an insurance policy, buy 1 or more chargers, and buy/rent a location to provide the service. Securing the optimal location will be the hardest part of this business model.
Owning a gas station can be a great business. Many individuals and companies make plenty of profit from having one or several gas pumps. In addition, creating a small convenience shop with snacks, drinks, and handy roadside tools further increases profit. As people stop to fill up for a few minutes, they can take a bathroom break, and get some snacks for the road. Creating an EV charging business is very much the same!
Electric car charging stations are slowly popping up in more and more places. If you haven’t started seeing them appearing where you live, you likely will very soon. They are now available at gas stations, grocery stores, malls, parks, many different employers, and many other public places. If you are interested in starting your own electric car charging business, we’re going to dive into how you can do this yourself.
6 Steps To Starting An EV Charging Business
The first step to starting your business will be to setup your business. In order to legally make money, you will need to be established as a business. You will need to choose an available business name and then file for the LLC. The appropriate forms can usually be found online in the state where you live. Once you have your forms completed, you can submit that, with a filing fee, to your state for processing. Once all of the dust has settled, you now have your own LLC.
Your next step will be to register your business with your state tax commission. The process and requirements for this vary from state to state. If you look online, you should be able to find the necessary forms for your specific state. Once you have that setup, you are now ready to get serious.
Next, you will need to find property. Your charging station needs somewhere to put it. There are many different ways that you can go about this. You may opt to buy a piece of land outright to put your charging station. That is an option and requires the most money upfront. In addition, you can lease or rent property from someone else. If your goal is to add charging station at your local mall, you probably aren’t going to be able to buy a piece of their parking lot. In that case, you will need to workout a deal with the mall to place your charging station there.
Once you have the property worked out, you need to choose a good charger. Be sure to do your own research to determine the best charger for your situation. You want to make sure you have a charger that is reliable and can charge cars for many years. You also want something that is safe so that you don’t have to worry about lawsuits. Lastly, many chargers offer great software. This allows you to connect to the charger through the internet so that you can manage it and perform certain maintenance tasks. All of these things are important to consider when shopping around.
Next, you will need to get everything setup. Depending on where you are building your charging station, there may or may no be power available there. Running electrical conduit large distances can be very expensive. You will need to get power to your charger and also have clearly labeled parking spots reserved for your chargers.
Your last step is to make your charging station yours. Now you need to add all of the additional features that you want your charging station to have. You will want signs and marketing however you see best. You will want to make sure your parking is clearly labeled and always available. You also want your chargers to be visible to others, so people know your charging station actually exists. You likely will also want video surveillance, so you can protect your business. How you set all of these other things up is entirely up to you.
How Much Does It Cost To Start An EV Charging Business
So, how much does it cost to start an EV charging business. This will likely depend on how you are looking to run your business. The first cost to consider is the land. If you are buying the land outright, this can be fairly expensive. You want a good central location where many people drive by. This can make those costs significantly higher, depending on where you live. If you are leasing or renting the property, that cost will be smaller but will be perpetual.
The next big cost is the charger itself. A DC fast charger can cost you anywhere between $10,000 and $40,000. This price varies depending on brand and the features that it offers. It will be up to you to decide what features you need and which charger to go with. The installation of the charger can also be expensive. If the location you are installing the charger at already has power, the cost is much less. You may be able to get everything installed for $4,000 or so. If you need to run conduit over long distances, this could cost you up to $50,000 depending on the distance and the area that you live in.
Your last cost will be all of the extras. That includes signs around your area, security cameras, lights, and any marketing you intend to do. These costs are all things that you need to decide whether you want or not. In addition, you can shop around for the specific models of everything that you want.
How Much Liability Insurance Do I Need When Starting An EV Charging Business
Just like any business, you will want liability insurance. This will help protect your business in case of an accident. This accident could be damage to someone’s vehicle while using your charging station or an injury or death to someone caused by your charging station. This can also cover the costs of lawsuits against your business. There is no limit to how much liability insurance you can have. But how much is too much?
If you are renting or leasing a property, your landlord likely will require a specific amount of liability insurance. In this case, that will be the minimum amount that you can have for your business. Apart from that, you will need to weigh out how risky your business is and choose the appropriate level of liability insurance based off of that.
How Much Money Do EV Charging Stations Make
So, how much money can you actually make from an EV charging stations. Obviously, this will change with time as electric cars continue to become a bigger and bigger part of our society. Even as things currently are, you can still make as much profit from an electric car charging station as you can from a gas station.
Recent surveys show that EV owners were perfectly fine with paying $3/hour for charging. In addition, 12% of people were fine with paying up to $4/hour for charging. Power prices vary from city to city, but most people can charge an electric car at home for closer to $0.75/hour. This leaves a decent margin for profit for the owner of the charging station.
Another important factor to consider is the traffic that charging stations bring. When people are waiting for their electric car to charge, they have time to kill. If the charging station happens to be at a store or a mall, they will likely head in to shop around while killing time. This can work to benefit the nearby businesses. If you are the owner of these businesses, that makes you more money. If you are renting or leasing the land for the charger, you can use that increased foot traffic as a way to negotiate a lower monthly payment.
With the large upfront cost of setting up an EV charging station, you likely won’t break even for several years after opening. From there though, you can expect to turn as good of a profit as a gas station. As more and more electric cars get on the road, that room for profit will only continue to grow.