By Nick Zamanov, Director of Business Development at Cyber Switching
Tesla (TSLA), Lucid (LCID), and even legacy automobile manufacturers like Ford (F) are all participating in the price war that is stirring up the electric vehicle (EV) industry. Tesla has even opened up their chargers to more than just Tesla EV models, offering drivers more options for charging.
The price war and industry shifts mean more people will likely purchase EVs, which in turn drives up the demand for chargers. Businesses and investors can take advantage of this demand, provided they factor in a few key considerations. EV chargers aren’t just a plug-and-play option; they require a few careful considerations to make sure it’s the right decision.
How Will This Impact Business?
The growing demand opens up a lot of business opportunities. As more drivers buy EVs, more EV chargers will be needed, which means places like shopping centers, offices and hospitals have a chance to install a new revenue source in their parking lots.
This can be beneficial for private companies too; as the workforce debates remote versus in-person workplaces, offering incentives like EV charging can go a long way in encouraging employees to venture back into the office.
There are two common revenue models for public charging stations: site host-owned and third party-owned. Site host-owned models are responsible for all aspects of the charging station, from purchasing, installing and collecting payment from drivers, whereas third party-owned models rely on a charging network company. These companies will likely handle maintenance and installation in exchange for a portion of the revenue. Like any good business decision, there are pros and cons. Some may prefer to own the chargers outright, shouldering all the costs – and profits – themselves, while others may prefer the less work-intensive third-party option, especially if they have a smaller company. The final say will likely depend on a number of additional factors. These include the location, EV adoption in the area and more. But it still opens up a strong revenue source previously unused.
Consider the Location
Before a company decides to drop a hefty chunk of change on chargers, they need to ask themselves a few questions. What does EV adoption look like in our city or region? Are we located in an area that’s likely to see the growth necessary to pay back that investment?
Drivers in rural regions, for example, will likely be slower to adopt EVs than their urban counterparts. But companies in high-adoption regions, such as Seattle or Los Angeles, have a lot to gain from making EV chargers available in their parking lots. They need to consider the population as well; if there are not enough charging stations, then businesses could lose out on that potential revenue, but if there are too many installed that aren’t being used, then that business loses money on that investment.
This goes beyond regions too: the specific location of the business will also have an impact. Shopping centers, apartment complexes and other high-foot-traffic areas do better with EV chargers that let drivers eat, shop or engage in other activities while their car is charging.
Make Sure Infrastructure Is up to Par
It’s not just about plugging in a charging station and calling it a day. There are a number of infrastructure concerns that businesses need to take into account when installing charging stations, including payment structures, cost, regulations and safety. This varies widely depending on region and location, so businesses should check their local regulatory bodies to ensure the best practices. This might include where companies can install charging stations and what safety measures they need to follow. There are also permits, signage and electrical contractor work that needs to be done in order to make their charging stations safe and effective.
A Charged Opportunity
There are many aspects investors need to consider when considering EV chargers. The EV price war is just one side of the industry coin. EV chargers offer a new revenue stream for investors, but it’s not about just plugging a charger in and calling it a day. Price, installation, local regulations and more can all have an impact.
For investors looking to get into the EV industry and consider new opportunities, EV chargers represent an opportunity to tap into a growing market in the early stages.
About the author:
Nick Zamanov is the Director of Business Development at Cyber Switching, the EV technology pioneer. He is an expert in the EV infrastructure space. Since his early days as an EV enthusiast in 2012, Nick has strongly believed that electric vehicles would eventually replace Internal Combustion Engine (ICE) cars. Prior to joining Cyber Switching, he founded and exited several E-commerce and SaaS startups, including Procolors, Amplefind, and Berry’s.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
