Electric vehicle (EV) charging stations are still a bit of a novelty. We have all seen them, but they are few and far between. Experts estimate there are fewer than 50,000 across the entire United States. In a decade’s time, we will need millions. Ambitious climate goals, government initiatives, and evolving car design from the world’s top manufacturers will require EV charging stations to become ubiquitous. To keep up with the rapid change of pace in the automotive industry, every property owner should be thinking about EV charging stations.
President has called for half of all vehicles sold in the United States to be capable of emissions-free driving by 2030. Today EVs represent only 2 percent of car sales. Joined by Detroit automakers and the United Automobile Workers union, President Biden issued the executive order for the American automobile industry to begin transitioning to battery-electric, plug-in hybrid, or fuel cell-powered vehicles. The effort began before Biden’s Presidency and will continue after, driven by global automakers who see a rapidly shifting market. Ford is investing $22 billion in electric car tech over the next five years. General Motors is aiming to go all-electric by 2035. Volkswagen, the world’s largest automaker, expects half of its sales to be electric by 2030. Toyota has already sold 15 million hybrid and electric vehicles worldwide.
Those ambitions will snowball quickly. Every year, nearly 80 million cars are sold worldwide. In 2019, automakers sold roughly 17 million cars in the United States. Let’s conservatively assume in 2030 that 15 million cars are sold in America. If even a third of those are electric, we will need to be adding about 5 million EV chargings stations per year just to keep pace. The United States currently has just 50,000. A problem of that scale will require practically every property owner across the country to seriously consider how to provide EV charging stations. Because about 80 percent of charging happens at home, the majority will likely be installed at private residences to charge personal vehicles, but the commercial world of multifamily, retail, office, and industrial real estate will also need to adapt. Residents will need more charging stations, shoppers will need the added convenience of charging while in-store, office workers will need to make use of office garage spaces for charging, and industrial operations will be converting fleets to EVs. A McKinsey report estimates the United States will need to invest $11 billion by 2030 to construct 13 million charging stations needed for the country’s switch to electric vehicles.
“These new actions — paired with the investments in the president’s Build Back Better Agenda — will strengthen American leadership in clean cars and trucks by accelerating innovation and manufacturing in the auto sector, bolstering the auto sector domestic supply chain, and growing auto jobs with good pay and benefits,” the White House said in a statement.
A bipartisan group of Senators is workings to pass President Biden’s 2,700-page, $1 trillion infrastructure plan. Include in the bill is $7.5 billion allocated for EV charging stations, focusing on providing them along highways and connecting routes. That’s enough funding for approximately 250,000 charging stations, less than half of what the Biden Administration was pushing had hoped for. Getting the right mix of charing stations right will be key. Level 2 chargers use the same voltage as a typical household dryer but can take hours to fully charge a car. Level 3 chargers can power up an EV in under 30 minutes but are considerably more expensive. Installing the right type of charger at the right location will be key. For multifamily properties or offices where occupants spend long hours, Level 2 chargers work well. At retail locations, industrial facilities, bus depots, roadside stops, and other places where getting in and out efficiently is key, faster charging will be needed.
It won’t be entirely up to the federal government to ramp up EV charging station installation. Currently, Tesla is leading the way. On Twitter Tesla founder Elon Musk announced the company would allow drivers of other EVs to use Tesla’s proprietary supercharging network beginning later this year. Tesla has been building charging citations at a blazing pace. Tesla now operates a network of more than 25,000 superchargers at nearly 2,7000 stations worldwide. About 10,000 of those stations are in North America.
“It is our goal to support the advent of sustainable energy. It is not to create a walled garden and use that to bludgeon our competitors, which is sometimes used by some companies,” Musk said during Tesla’s recent Q2 earnings call.
Musk’s high-minded ideas are backed by devilishly clever execution. Detailing the plan for reporters, Musk said drivers of other EVs will be able to use Tesla’s station simply by downloading and using the Tesla app. They may not own a Tesla, but by using the Tesla app and its prolific network of chargings stations, they’re in the Tesla ecosystem, making converting them to Tesla customers that much easier. Tesla may not profit off the sale of competitors’ EVs, but Musk has devised a way they can profit from the use of them. Goldman Sachs estimates Tesla could rake in $25 billion per year in charging fees from non-Tesla drivers.
Tesla alone cannot fill the gigantic gap in EV charging stations. Coordinating regional and national policies with the free market will be key. To meet the massive need for more chargers, several entrepreneurs are mobilizing. ChargePoint revenue is up 24 percent, now operating 112,00 charge ports. Blink Charging has grown to about 23,000 chargers. Rival EVgo has about 800 fast-charging stations. Volkswagen subsidiary Electrictyy Americas is approaching 700 locations, aiming to double the number by 2025. The race to seize the opportunity is on and everyone is chasing Tesla because the path to profitability isn’t as clear. Tesla’s charging is part of the Tesla ecosystem, selling electricity at low margins to be able to sell more vehicles at high margins. Profitability will be difficult if EV charging station companies are only acting as electricity brokers. It will be even harder to compete against the utilities themselves.
The public sector is forming partnerships across state lines and different levels of government, uniting energy providers and municipal governments. Formed earlier this year, the Electric Highway Coalition is reaching critical mass. With the likes of AVANGRID, Consolidated Edison, DTE Energy, Eversource Energy, Exelon, FirstEnergy Corp., ITC Holdings Corp., and National Grid on board, the 14-member utility commission represents 29 states and the District of Columbia and serving more than 60 million customers. The combined efforts will work to enable long-distance EV travel, avoid duplication among Coalition utilities, and built out methods for drivers to pay for electricity hassle-free. Federal, state, and local incentives are being rolled out for EV charging installation. Businesses can already receive up to a $30,000 federal tax credit for installation. Individuals can claim $1,000 off for at-home installations. Several utilities offer grants and incentives.
All of this is to say in ten years’ time, EV charging stations, no matter how they’re installed, will be everywhere, turning them into one of the most common forms of PropTech throughout our built environment. If the United States gets anywhere close to the ambitions of politicians and business leaders, millions of EV charging stations will be coming to homes, parking garages, retail lots, industrial fleets, and highway exits across the country. A change this monumental means every property owner might have to consider supporting EV charging stations.