The future of the EV charging market is now. Unprecedented demand and favorable legislation are combining to create an open roadway in front of the EV market, and EV charging business owners should be ready to put the pedal to the metal.
The demand for EVs is directly translating into demand for charging points to power them, and governments worldwide are directing investment into EV infrastructure while settings limits on the consumption of petroleum-based fuel. The result is an EV charging business boom, with opportunities especially in the areas of commercial, residential, and public-private partnerships.
Here’s what you need to know about the EV charging business opportunities opening up in 2024.
An estimated 26 million electric vehicles (EVs) travel the world’s roadways, with more joining the on-ramp every day. Consumer demand for EVs has increased 350% from 2020 to 2022, with a reported 30% of licensed drivers in the market for a new vehicle considering purchasing an EV. Approximately 1 million new EVs were registered in May of this year alone, and the International Energy Agency estimates that a total of 14 million new EVs will be sold by the end of the year.
To put that in perspective, the Compound Annual Growth Rate (CAGR) of the entire automotive industry is expected to increase by 5.62% between 2022 and 2032, but EVs are speeding past that number with an expected CAGR during the same period of 28.2%. That means that over the next ten years, EV sales will be accelerating faster than sales of traditional vehicles by more than four times.
To accommodate all of these new EVs (and encourage the sales of more), governments are enacting EV and environmental legislation at a record pace. In the United States, the Biden administration’s National Electric Vehicle Infrastructure Formula Program (NEVI) aims to invest $5 billion over five years, and the Charging and Fueling Infrastructure (CFI) Discretionary Grant Program will make its funds directly available to a wide array of applicants, including cities, counties, local governments, and tribes. Similar legislation in the European Union, China, and Canada are expected to boost the global charging market to around $128 billion by 2030.
As the sales of EVs increase, EV and EV-related technologies are also moving forward. The most significant technological improvements on the road ahead are in the battery space. Newer batteries could store significantly more power while also charging more quickly.
This would reduce both the number of times an EV driver requires a charge-up and the amount of time it takes them to refuel. EV charging point owners could, of course, charge a premium for this service.
Speaking of premiums, the current top-of-the-line EV charging point is the Level 3 charger, also known as the Tesla Supercharger or DC fast charger, operated under the North American Charging Standard (NACS). Level 3 chargers deliver more power faster, greatly reducing the amount of time an EV driver spends at the charging station. They are also highly sought after by EV motorists, making them a demand generator unto themselves. The recent adoption of the NACS by several automakers in North America and Europe will open up these chargers to a broader range of motorists.
Also of note, the technology powering EV charging points is continually evolving. Software providers offer data visualization and analytics tools that will allow you to maximize your investment in charging points and optimize for the number and types of users who swing by your place of business for a charge. ChargeLab, in particular, offers a white-label, hardware-agnostic solution that can scale with your charging business. If you are thinking of starting an EV charging business, contact us today.
EV Charging business opportunities
All of the above is to say if you’re considering starting an EV charging business, now is the time. Government investment in infrastructure and the rise in sales of EV vehicles themselves mean that EV charging is going to be in even higher demand.
The sheer scale of opportunity at hand brings to mind the boom in roadside businesses in the U.S. during the 1950s and 60s. The Interstate System was stitching its way across the country hundreds of miles at a time, and business owners flocked to the expanding Interstate in droves to welcome American motorists to the joy of cross-country travel, one motel room, fill-up, or hamburger. Today, we have a similar opportunity with EV chargers.
As more people purchase electric vehicles, they will need more places to charge. Range anxiety is going to become as unacceptable as finding an empty pump at a gas station on the Interstate. And, just like at Interstate gas stations, people who stop at an EV charging point to juice up their EVs are going to want snacks, mementos, and air for their tires. Businesses in a position to provide all of those things (and EV charging) will reap huge dividends.
Most EV charging businesses will fall into one of four categories:
Charging networks: Think gas station chains, but for EVs. Networks own and operate their own chargers and try to gain as much density within a region as possible to serve their customers.
Turnkey installers: These specialize in hardware and software installation, servicing businesses that have decided to install EV charging points.
Service providers: A service provider might also install EV charging points, but they typically go above and beyond mere installation, offering service plans, financing, maintenance, and operation.
Consultants: This is who you call if you want to install EV charging points but don’t know how many, what kind, or where. Consultants have all the answers but none of the equipment, and they generally act as go-betweens with installers or service providers.
Even aside from dedicated automotive businesses, EV charging business opportunities abound in the commercial market. Most commercial businesses have parking lots, and most parking lots are able to house one or more EV charging points.
Charging points can charge EV owners a flat fee or per electrical unit, like a gas station pump. If customers are already coming to a location to spend time, why not encourage them to charge up while they shop, eat, or work?
Businesses that could benefit from EV charging points include:
- Office buildings
- Retail establishments
- Gas stations
- Event venues
Owners of the above establishments can enter the EV charging business themselves by partnering with a turnkey installer or service provider or leasing space to a charging network. You can even apply for federal grants if you are a business looking to install Level 2 or Level 3 chargers.
Most privately owned homes are compatible with a Level 1 or Level 2 charger, and so are most apartment buildings. Property owners can capitalize on the growing EV charging market by installing one or more EV charging points at their buildings and charging a fee or including EV charging as a residential perk, like access to a swimming pool or laundry machines.
Since most property owners are simply looking for a value add and aren’t necessarily interested in going into the business of EV charging themselves, sharp entrepreneurs in the EV charging space can tap into this trend by offering property owners a full-service plug-and-play package of installation, operation, and maintenance.
With more than $5 billion going to states and municipalities over the next five years to establish new EV charging points in the U.S., the market is wide open for entrepreneurs to partner with local and state governments to be the installers or service providers who install and service those charging points.
In San Antonio, Texas, for example, the city entered into a public-private partnership in 2021 to install EV charging points at public sites like libraries, parks, and parking garages. The program was considered so successful they are planning to install more.
As demand for EV charging points grows, cities are looking for partners to help them determine demand and front some of the costs of building out EV charging infrastructure. This presents a unique opportunity for businesses willing and able to help city managers navigate the market.
Opportunities like these and more abound with the explosion in EV demand, innovation, and legislation. ChargeLab is here to help you compete in the exciting EV charging market. With a platform-agnostic, white-label charging software solution, ChargeLab empowers you to take control of your app’s UX while offering in-depth charger and pricing management tools. To learn more about how ChargLab can help you explore EV charging business opportunities, contact us today.