5 Great EV Charging Business Models
The backdrop of European EV sales growth
2015 was an incredible year for European EV sales with a 99% increase in sales (against a 55% sales increase from 2014). Netherlands and Sweden showed incredibly strong sales at the end of 2015. Customers rushed to buy PHEVs (plug-in hybrid electric vehicles) before government incentives finished at the end of the year.
Norway’s 2015 electric vehicle share of 19% means it’s still the world leader. All European markets are growing, with the Netherlands, Norway, the UK, France and Germany showing the strongest growth.
For new EV drivers, 2015 was a great year with some great new electric cars, particularly in the compact segment such as the VW Golf GTE, Audi A3 e-Tron and VW e-Golf. Compact sales have made a strong contribution to global growth.
So, there is massive sales growth but, electric vehicles are still only about 1% of the giant UK and German EV markets. There is so much more European EV sales growth to come.
"All these new electric cars on the roads need EV chargers!"
What’s the best EV charging business model?
Plug-ins have gained mass awareness, European EV sales are rocketing, and the industry is booming.
There is massive potential to offer EV charging services and take a slice of the business. However, it is important to mitigate risk from investment, build a sound business case, keep your operating costs low, and ensure you profit from EV charging.
What are the opportunities? What’s your part in the electric future? Let’s look at some winning EV charging business models that might be right for you:
1. Regional fast charging networks
For major private and public enterprises, like retail chains, hotel groups and utilities, there are business opportunities around inter-regional and inter-city infrastructure gaps. Considerable long-term partnership work and internal resources are typically required.
Consumer-facing businesses with existing or planned premises can gain competitive advantage from marketing and branding opportunities and have EV charging as part of their customer experience. EV drivers are attractive customers, typified by high than average income and higher than average education. This model is attractive to companies looking to increase revenue per customer visit.
Multi-site DC fast charging networks can breathe new life into tired premises and provide a launch boost to new businesses. From country-to-country and at EU level there are various public policy initiatives, incentives and grant funding opportunities to support investment. Tourist regions and regional development zones are particularly attractive locations.
2. Local, small businesses initiatives
Tourist destinations typically compete on accommodation, services, activities and accessibility. With poor accessibility, visitor numbers decline, and businesses suffer.
For towns, cities and attractions that rely on highway access for visitors, EV infrastructure is becoming vital, and it's a business opportunity.
The accessibility needs of self-drivers are changing as more drivers switch to electric vehicles. By 2020, the tourist destinations with the best EV charging infrastructure will be the most accessible to the new generation of electric drivers.
To create local infrastructure, coordination is often required between small business groups, such as local chambers of commerce or similar organisations. There is also potential to partner with local tourism, cultural, sports and environmental bodies. One potential complication is that the design of EV charging points may have to satisfy local heritage regulations and planning bylaws.
This model is very important for businesses and organizations that have to maximize revenue from peak seasonal traffic. This is a great fit for mid-sized towns that are popular tourist destinations or commuter towns. Locations with high footfall can also benefit from added value charging station solutions with, for example, built-in advertising displays that bring in additional sources of income.
3. Commercial EV charging
Retailers, shopping centres, hotels, fast food outlets, car parking providers and all kinds of business with off street parking can now offer EV charging with low effort. Commercial EV charging can also be a more strategic move from a larger chain, such as a hotel group or fast food chain.
The services provided by the best EV charging manufacturers, and EV charging technology and connectivity, have advanced significantly. This means that EV charging capabilities are now within reach of smaller businesses and individual sites, with low risk and low investment.
Resellers and charging point network operators (CPNOs) offer turnkey solutions and white label apps. Solutions often include a charging point management system (CPMS) that handles user authorisation (typically by RFID card) and PCI-compliant billing. Success with this relies on hardware with reliable, advanced connectivity.
For different business types, the benefits include: bringing in new, higher value customers; increasing time in store; referral sales; reaching sustainability goals; and improving customer satisfaction. There is also the potential for competitive advantage from positioning as a green company. To create your green business image, you can see our blog post on going green.
Charging doesn’t have to be just for customers. Charging for staff and customers’ private vehicles, as well as the business’ own fleet, offers potential to increase revenue and decrease costs. That of course with appropriate actions taken. Because 80 % of EV charging related costs are generated by the day to day usage of your chargers, that is where you need to act. We have outlined your possible actions in our free cut your operational expenses guide, that you can download here.
“The biggest risk in the commercial model is to underestimate the OPEX costs of EV charging.”
The lowest cost hardware typically leads to high service and maintenance costs, as well as undesirable downtime. The best providers remove this risk with high quality hardware, and lifetime service plans. To take the first step in cutting your maintenance costs (OPEX), you can see our save on OPEX guide, because:
"Over 80% of lifetime EV charger costs are from OPEX"
4. E-fleets and enterprises
In major corporations, e-fleet adoption is increasing. The need to meet sustainability targets and demand from employees mean fleet managers are turning to electric vehicles. However, the biggest driver of fleet EV adoption is the compelling business case.
Lower refuelling costs and predictable fuel prices help the bottom line. Tax credits are also popular with employees. Serving grey fleets offers additional revenue-generating opportunities. Government incentives for EV fleets are available across the EU. There are tax breaks and exemptions, and bonus payments in some markets.
Electric fleets are also attractive because of low maintenance costs. New in-car and charging point technologies also provide far more actionable real-time data for fleet managers. Increased knowledge of drive patterns and predictable maintenance costs support more efficient operations and planning.
In the UK, e-fleets are an attractive option because EVs are exempt from the London congestion zone charge and the UK government has committed at least GBP200m from 2015-2020 to bridge the cost of low-emission vehicles. EVs offer a reduction in noise pollution that is also a key factor for some fleets.
The challenge for fleet operators is to choose the right infrastructure that combines the ideal capacity, potential for ancillary revenue, and the lowest operating costs.
5. Municipalities and sustainable e-mobility
Local councils and other local bodies across Europe are under pressure to demonstrate their commitment to e-mobility and encourage the transition to electric vehicles for residents and businesses.
Public demand for EV charging is rising. Governmental low emission vehicle programs are also driving the switch to EVs. Local councils typically have a commitment to reduce pollution and improve air quality, plus there are various local and EU incentives for public fleets.
Many councils have their own vehicle pools or then provide facilities to outsourcer fleets, and to taxis, private hire firms and couriers. Car clubs, in partnership with local authorities, are a common solution for councils to support EV adoption, while sharing the risk, and outsourcing the day-to-day business expertise.
Tourism and the communications benefits of environmental commitment are also important factors for some. Overall, switching to electric vehicles and providing EV charging has the potential to cut costs and be a valuable source of income.
What’s your EV charging business model?
Do you need help making your EV charging business case? Do you want assess your the lifetime costs of EV charging?
Chago is the leading EV charging station manufacturer in Europe. We make EV smart business. That means helping our customers cut operating costs and increase revenue.
One example is our Chago Pro EV charging station. It’s a technologically advanced and durable single/dual charging station designed to operate even in the most demanding environmental conditions. Our services and products offer low-OPEX lifetime support with full V2G capabilities to guarantee your business the highest quality solution. To start your journey towards low cost charging, learn how to cut your EV charging costs with our free guide on lowering your operational expenses (OPEX).
Are you serving customers or swallowing Electric Vehicle charging costs? Learn how to invest in EV the right way!