To say that this is an exciting time to join the EV industry is a bit of an understatement. The market is expected to reach $457.6 billion worldwide in 2023, and the sales of EVs are projected to hit 26.6 million units by 2026. If you’re looking to start an EV charging business, the timing is right, but there are different ways to get into this sector and each one requires a different business model.
Read on to learn more about the different types of EV charging station business models and how to decide which one is the best fit for your situation.
Common EV charging station business models
The type of EV charging station business model that’s right for you will depend on your goals, expertise, and available resources. The business models outlined below are three of the most common ways for someone to get into the EV charging business.
A charging network operates on the same model as gas station chains—a single entity (that’s you and your business partners) owns stations at multiple locations and tries to get as much density in the market as possible to maximize profits. You may operate the stations yourself or pay for a service to maintain your charging stations for you.
Network operators make money by charging EV drivers either a flat or variable rate based on fluctuations in power supply during the day. Some networks may also choose to offer a membership program with lower fees and other extra perks as a way to build loyalty with EV drivers.
This business model requires a lot of time and resources to build from the ground up. Because of the upfront costs and required expertise, it’s the most obvious fit for gas station chains looking to transition to operating EV charging stations and professionals already working in the EV industry.
If you’re certain that being an EV charging station network is right for you, here are some considerations and resources you’ll need:
- Numerous EV charging station locations: Research the area carefully so you understand infrastructure requirements and the amount of demand you can expect.
- A mix of chargers for your network (Level 2 or DC fast chargers): To offer maximum flexibility to your future customers and ensure you’re buying equipment at competitive prices, you should consider purchasing a variety of EV charging options.
- Open, interoperable software: Running a network of charging stations that don’t work with the same software can quickly become a logistical nightmare. Pick an open protocol, preferably an OCPP-compliant solution that allows you to control all your chargers from the same hub.
Solutions providers resell EV hardware and services to other businesses (such as fleet operators or multi-family property managers). These value-added resellers may also work with individual site owners or homeowners who want to install private charging units. The specific services vary from provider to provider but can include initial consultation, hardware and software installation, maintenance, and ongoing operation of the charging stations. Some solutions providers work directly with EV charging networks, while others offer turnkey services for businesses and organizations that want to add a few charging stations to their premises (think retail centers, office parks, or apartment complexes).
With this EV charging station business model, you charge your clients either a one-time fee for installation and/or a monthly or annual fee for keeping the chargers up and running. Your profit comes from margins by soliciting discounts on hardware and software, which you then sell to customers as a complete package for a marked-up price.
This business model works best for:
- Current EV industry professionals
- Green technology educators or consultants
- Energy professionals looking to broaden their offering (e.g. LED lightning resellers)
- People with a strong sales and customer service background
- Anyone passionate about EVs and willing to dive into a new industry
You may also want to choose a niche for your business, such as commercial real estate, which will make marketing your services a more manageable task.
Some resources you’ll need include:
- Menu of services: Some solutions providers only offer initial installation services, while others offer only maintenance and consultations. Others still may offer a full white-glove service, guiding clients through the entire EV charger installation process as well as ongoing maintenance. Decide which services you have the expertise, time, and willingness to provide.
- Rebate know-how: Being well-versed in rebates is important no matter where you sit in the EV industry, but it’s crucial for solutions providers. You’ll need to be able to explain to clients why installing EV chargers is a financially smart decision, and telling them about all the available rebates in their area and helping clients apply can go a long way toward helping your argument.
- Strong customer support: Solutions providers work with people outside the EV industry. That means you’ll need to provide a supportive, patient customer experience, especially if you want to work with clients on a long-term basis.
- EV charger hardware and an open CSMS: If you plan to operate EV charging stations for clients, you’ll need to have a selection of hardware that address their target market needs. Moreover, you will also need hardware-agnostic EV charging station management software (CSMS) that works with all of your chargers. At ChargeLab, we partner with turnkey installers by offering white-label software that they can present to clients under their own brand.
EV charging as an amenity
Existing businesses—shopping centers, hotels, multifamily housing properties—and government-run entities (university campuses, parks) can add EV charging stations to their premises as an amenity. Businesses that want to offer EV charging typically purchase the EV chargers from a solutions provider that can also operate and maintain the charging station on the business’s behalf.
You can choose to charge customers or the general public for using your EV charging stations and make a profit. But you may also benefit from the increased traffic or property value of your site as a result of having EV charging stations.
If you want to add a couple of EV charging stations to your parking lot, here’s what you’ll need:
- A provider you can trust: Trying to install and maintain EV chargers on your own won’t be a good use of your time or resources. You have an entirely different business to run! Partner with a solutions provider who can walk you through the process and help you decide on the fee structure that makes the most sense to you.
- Some knowledge of EV rebates: Your solutions provider should alert you of any US or Canadian rebates you’re eligible for, but you know your community best, so it’s important to do research on any local EV rebates available to businesses in your area.
- A grasp of your target market: Run a few surveys of your current customers to determine their EV charging needs. This should help you decide on the number of EV chargers you need onsite. Consider also how long customers tend to stay at your place of business. If you run a multi-family housing complex, tenants can charge their vehicles overnight, so you can probably get away with installing the more affordable level 2 chargers. But if you own a retail center, where drivers only linger for a few hours at a time, a few DC fast chargers may make sense.
- User-friendly EV charging station software: Even if you pay a service provider for hardware maintenance, you may want to manage some aspects of your EV charging stations yourself. That could include load balancing between the chargers and managing user access and revenue. An easy-to-use platform should allow your team to handle day-to-day operations without specialized knowledge and access to 24/7 support.
Start your business off on the right foot
Opening a new business is an enormous decision that will affect not only your finances but your entire career trajectory. Investing in the best tools you can from the very beginning can help set your budding EV charging business up for success. A hardware-agnostic, comprehensive EV charging station software should be included in the list of must-haves in your business plan. ChargeLab works with stakeholders across the industry to make widespread EV adoption a reality. Reach out to our team to see how we can help.