Electric vehicle (EV) use is accelerating, and commercial real estate owners can reap significant benefits from installing EV-charging infrastructure at their properties. A recent NAIOP webinar explained how these programs can attract and retain tenants, improve the property’s environmental score and generate new revenue streams.
According to Bryce Christensen, P.E., a senior partner with Kimley-Horn, EVs are becoming more affordable. Of the more than 40 options currently on the market, he said that 10 now cost under $40,000, and nearly every major automaker has made public commitments to EVs, which should boost adoption by helping bring prices down even more.
“It’s no secret that the market share of electric vehicles in the United States and worldwide is trending up,” Christensen said. “The demand is rising, and many potential consumers are just waiting for more charging infrastructure before committing to going all-electric.”
Christensen noted that the tipping point for accelerated adoption of EVs seems to be around 5% market share, based on data from BloombergNEF.
“Typically, the first 5% market share is the slowest to achieve,” Christensen said. “But once you get to 5%, EVs can quickly go from niche to mainstream.”
For example, Norway currently leads the world in EV adoption rates. In 1990, the Norwegian government implemented a temporary tax exemption to incentivize EVs. It took until 2013 for the country to hit 5% adoption, but today, EVs account for more than 20% of all passenger vehicles on the road in the country, and more than 80% of all new vehicles sold.
According to Christensen, the U.S. market share for EVs reached 5.6% in the second quarter of this year.
Jessica Cain, P.E., a senior partner with Kimley-Horn, discussed the different charging levels available for EVs.
Level 1 charging has power requirements similar to a toaster.
“You can run an extension cord and plug it right into your kitchen outlet and in about 10 minutes, you can drive about a mile,” she said.” In several days, you’ll have a fully charged battery. So while it is an option, it probably isn’t too practical for most of us.”
Level 2 chargers, with power requirements similar to a clothes dryer, can fully charge a car in about eight to 13 hours.
Level 3 chargers, also called DC fast chargers, have the potential to fully charge a vehicle in about 20 minutes. They also have the greatest power consumption, with requirements equaling five to 10 central air conditioners.
The first step in setting up the ideal EV charging solution is understanding the use case:
Analyzing the site’s physical characteristics is another critical aspect of successful EV charging station implementation:
Understanding different business models for EV charging is crucial as it can influence investment and revenue opportunities. There are several options, such as leasing the site to network operators who handle the infrastructure investment, equipment and maintenance. In return, they might pay rent or offer a revenue-sharing solution based on usage.
Alternatively, some landlords own and maintain the EV charging equipment. While this requires upfront costs, it offers more control over the charging rates, access to customer data and other revenue opportunities, such as contracting with fleet customers.
Federal and state grants and funding opportunities aimed at promoting EV adoption and infrastructure development provide major incentives for installing charging stations. For example, the $1.2 trillion Infrastructure Investment and Jobs Act includes provisions for EV charging network development and emissions reductions. This includes programs such as the $5 billion National Electric Vehicle Infrastructure (NEVI) Formula Program, which is working to develop a national DC fast-charging network, and the $2.5 billion Community and Fueling Infrastructure (CFI) discretionary grant programs that will be open to cities, counties, local municipalities and tribes. The CFI program also includes carve-outs for battery storage and solar to support infrastructure development.
It’s essential to research and identify the various funding sources and incentives that are locally available to offset the installation costs and ensure the viability of any EV charging project.
Investing in EV charging stations offers several benefits to a company. Beyond the potential revenue streams, implementing charging infrastructure helps meet sustainability objectives and differentiate the property. As more companies adopt sustainability goals, offering EV charging facilities becomes a strategic advantage that aligns with the growing demand for environmentally responsible practices.
“We’ve seen many of the largest corporations in America make public sustainability goals,” Christensen said. “They have to find ways to achieve these. Lots of different things come into play. And differentiating your location with EV charging is a great way to attract customers, tenants and future investors.”
Trey Barrineau is the managing editor of publications for NAIOP.
More About NEVI and CFI Funding
In February 2022, the U.S. Departments of Transportation and Energy unveiled the National Electric Vehicle Infrastructure (NEVI) Formula Program. President Biden’s Bipartisan Infrastructure Law established it to build out a national electric vehicle charging network, a key step toward greater accessibility to electric vehicle charging. The program will provide nearly $5 billion over five years to help states create a network of EV charging stations along designated Alternative Fuel Corridors, particularly along interstate highways. States must submit EV Infrastructure Deployment Plans to access these funds.
While the NEVI Formula Program sends money to states to build EV-charging infrastructure along interstates, U.S. routes and state highways, the CFI Discretionary Grant Program awards competitive grants to projects that fill gaps in the national charging and alternative-fueling network and build out charging in communities. A priority of the CFI Program is bringing EV charging into urban and rural communities, downtown areas and local neighborhoods, particularly in underserved and disadvantaged communities, as well as to designated alternative fuel corridors.