Real estate must accelerate plans to meet demand for EV charging
As millions more electric vehicles hit the road, charging infrastructure is playing catch-up
As the electric vehicle (EV) market gains momentum, commercial real estate will become a critical host of charging stations, or “charge points” for passenger vehicles as well as fleets.
Yet adding EV charging infrastructure is relatively new to most real estate owners. It’s also somewhat low on the priority list amid major changes to established ways of working, short-term challenges like high inflation, and long-term decarbonization objectives.
That could be a detrimental oversight given that EV adoption is accelerating fast. According to Bloomberg, there are 20 million EVs worldwide today, up from fewer than one million just four years ago. Bloomberg predicts that 71 million plug-in vehicles will be on the road by 2025.
Real estate owners who lay the groundwork now to offer EV charging services can differentiate their properties and secure a competitive advantage when EVs become the new norm.
It may be tempting to dive in and engage hardware and software providers, as well as charge point operators, in a seemingly turnkey deployment. However, failure to carefully evaluate and strategically plan for EV charging infrastructure can lead to lackluster results characterized by greater expense, a stressed power grid, low quality implementation or missed revenue opportunities.
As EV adoption is emerging in real time, there are few best practices available to building owners, leaving them with the challenge of identifying the best vendors, assessing the best approach, and negotiating contracts.
Considering the multiple players involved and the complexity of EV charging solutions and usage patterns, building owners must consider several factors to implement the EV charging infrastructure that best meets their objectives.
Begin planning now
EV charge points are in short supply even before the number of EVs surges. Property owners with onsite car parks who take a “wait and see” approach will scramble to meet tenant requests to install EV chargers in the coming years. They will also struggle to compete effectively for sustainability-focused tenants. Developing a scalable strategy for EV charging implementation sooner, rather than later, will pay off longer-term.
Consider a comprehensive portfolio strategy
There are many different arrangements for owning and operating EV charging points. Full ownership involves the property owner investing in the equipment, bearing the full risk and capital expense of the project, and then monetizing charging services through tenant lease agreements or the direct sale of energy to EV drivers.
A second option is to outsource the project, allowing a third party to deploy the charging points and pay the owner for using the space. This places the cost of ownership and repair on the third party, but they will equally get the full revenue potential of providing EV charging services as EV adoption increases over time.
Another option is to allow tenants to install their own EV charging stations. However, this is only viable for those on long-term contracts and brings its own challenges. A piecemeal approach in which different tenants opt for different systems means installations would be incompatible and would likely require expensive power upgrades down the line. Furthermore, when chargers are shared among fewer users, they’re left idle more frequently, which in turn increases their relative cost.
With all ownership options, real estate owners must decide if they will pass on the full cost or offer it as a subsidized or even free amenity to attract sustainability-minded tenants. Access to charge points may be negotiated as part of lease contracts or enabled on a pay-per-use basis.
The decision on which approach to take depends on the long-term portfolio strategy. Is the building likely to be sold in the coming years? Are there external developments such as regeneration or incoming low carbon emission zones in the vicinity?
Evaluate the user experience
The user experience is the most complicated consideration. For office or hotel buildings accommodating workers’ or guests’ personal cars, it’s unnecessary to deploy chargers in every parking space; charging hundreds of cars at the same time would exhaust energy supplies. Yet even deploying EV chargers in a limited number of parking spaces requires forethought into availability and tenant usage.
In some commercial real estate environments, charging points can be a new revenue source. The availability of convenient charging stations in retail stores, restaurants and other leisure facilities can attract customers and increase dwell times.
Research from CACI found 48% of existing EV owners have used charging infrastructure in a public car park and 33% have charged up at a supermarket. With the deployment of mobile or credit card payment options, property owners can generate revenue with each charging station use or increase revenue per customer as they eat, drink and shop while their vehicles charge.
Likewise, installing enough charging infrastructure to meet - but not exceed - demand for multifamily projects can have a significant impact on leases or condo sales.
Drive plans forward
Due to the different sizes and shapes of parking facilities, and varying tenant charging requirements, there’s no one-size-fits-all blueprint for implementation.
Day-to-day usage mapping is a critical starting point. For multiple spaces and limited power, how will charging be prioritized? Will parking spaces for executives or high-mobility sales teams be prioritized over others? Will charging stations be in a central portion of the parking lot to avoid additional cabling and electrification expenses over long distances?
Making the right choices for your real estate is key - and advanced planning could result in significant savings. For more information on the planning and implementation of EV charging solutions, contact one of our experts today.