How electric cars are driving change for UK real estate

With more drivers in the UK opting for electric vehicles, homes, retail developments and public spaces are adapting to meet the need for charging points.

April 20, 2018

Once the realm of a niche audience, electric vehicles are on the cusp of becoming mainstream as savvy motorists search for ways to cut costs and reduce emissions.

Demand for plug-in cars in the UK has surged over the last four years, with more than 130,000 registered by the end of 2017. And this number could soar to one million by the end of 2022, according to Chargemaster, the UK’s largest provider of electric vehicle charging infrastructure, meaning plug-in vehicles would comprise 10 percent of all new car registrations in just over four years.

Much of the increase in electric vehicles reflects the way society as a whole is changing.

“Consumers have become a lot more aware of climate change and want to do their bit to help the planet; the Volkswagen diesel emissions scandal really brought this to the fore,” says Peter Sermon, Director – Energy and Infrastructure Advisory at JLL. “At the same time, electric vehicles are becoming a mass market vehicle, thanks to mainstream manufacturers like Renault, Citroen, Volkswagen, Jaguar Land Rover, BMW and Nissan all offering their own models.”

Furthermore, the availability of government grants, which can be used towards the purchase price of electric vehicles and the associated charging infrastructure, as well as falling costs and better battery technology that increases electric car range, are encouraging former sceptics to move away from petrol and diesel.

And it’s not just consumers who are attracted by the benefits of electric power. Since January 1, 2018, all new black cabs in London have to be zero emission capable models, as part of Transport for London’s effort to reduce toxic pollution from diesel engines.

“Using electric power is more compelling than petrol or diesel because taxi drivers can reduce their cost per mile and save on congestion charges,” says Sermon. “I expect there will be a mass roll-out of electric vehicles in the commercial sector – whether that’s taxis, buses or delivery vehicles.”

Indeed, some logistics firms are already making the switch. In March, UPS announced that electric vehicles will soon account for all of its central London fleet while last year, Royal Mail trialled electric-powered postal vans.

Revenue opportunities

The growth in electric vehicles requires real estate to adapt to meet demand. Some new build homes are starting to incorporate charging networks; Scottish housebuilder Springfield Properties recently pledged to include them in all new developments.

However, while the majority of electric vehicles are charged at home, there is a growing demand for public charge points to service drivers at their end destinations or during the course of their journey. As such new charging stations are gradually appearing at offices, supermarkets, petrol stations and on the sides of city streets. Among workplaces, larger forward thinking corporates such as Microsoft are currently leading the way.

“After the home, the workplace is typically where people’s cars reside for the longest amount of time, so as the popularity of electric vehicles grows, it makes sense for employers to install charging points both to satisfy employee demand as well as promoting a future thinking brand and culture,” says Sermon.

For retailers, providing charging points can both highlight their green credentials and generate extra revenue either directly or indirectly. IKEA, Sainsbury and Tesco are just a few of the retailers leading the charge to encourage electric vehicle drivers to shop at their stores. Meanwhile, Shell and BP have announced plans to install charging stations across their UK forecourts. A rapid charge time of 20 to 30 minutes enables customers to grab a coffee and a snack from the petrol station’s shop.

Choosing the right location

In other places, such as public side streets and car parks, users can access charge points by paying a price per time or price per energy consumed. For installers, working out where to garner the highest revenue is key.

Overnight charging at supermarkets could be a significant opportunity in future, Sermon believes, particularly in urban areas where people live in flats and don’t have access to their own home chargers, while supermarkets have reduced power demand at night.

“There are a lot of developers who are looking at installing charge points in areas with the highest density of electric vehicles that will enable them to make a positive return on their investment,” Sermon says. “They also need to be mindful of the capacity that’s available on the grid. Most real estate is designed with a certain power requirement in mind and, until recently, that didn’t include lots of electric vehicles.”

It is this constraint on grid capacity that’s leading some developers to install batteries alongside – and even inside – their charging stations to accommodate the increased demand on the grid. Other solutions being developed to help address this challenge include ‘smart charging’, ‘load balancing’ and ‘vehicle to grid’ technologies that allow a car’s charging profile to be adapted to reduce demand at busy times or locations. Yet challenges still remain to scale up the number of charging points to meet rising demand.

Indeed, the UK’s Committee on Climate Change estimates that the country will need 29,000 charging points by 2030 to meet the expected rise in electric vehicles, up from just 14,500 today.

Sermon is confident that the sector will rise to the challenge, especially as more developers start to recognize the revenue opportunities created by charge points.

“There is growing pressure on employers, forecourt owners, retailers and councils to cater to the new wave of electric vehicle drivers, and that’s only going to intensify as major car manufacturers launch more affordable and technologically-advanced models,” he concludes.