If you’re an EV driver, the title may evoke an image of paying a high price per kWh at a brand name fast charging station located off an interstate exit. This article is not about that.
This article is for those hoping to make money owning and operating a publicly available EV fast charger, or for those who are even more ambitious and want to do so with a network of public EV fast chargers.
Rule Number 1, The Independent Owner – Don’t Do It – If you own a convenience store/gas station, restaurant, casino, city parking lot, an electric utility, or other venue with a bit of spare parking and access to three-phase power, don’t buy an EV fast charger. If you’re a utility, many states don’t allow you to do it anyway (e.g., California), and you may not have the vertically-integrated competence to pull it off. This venture is not for the faint of heart.
Here’s what happens. An EV charging network operator will approach you (no names, you know who you are) with the offer to install and operate an EV fast charger. As a bonus, they’ll say you get to charge EV drivers whatever you want and will make tons of money. All you have to do is buy the charger and pay for the installation and the ongoing minor network fees. You will also pay for maintenance and the utility bills. This is revenue negative . . . and will frustrate you. Unless you have an unlimited pot of money and a box of aspirin, don’t do it.
Tip for Rule Number 1, Let Someone Else Do It For You – Having an EV fast charger or two as an amenity can be a great draw for your business. Let someone else buy the charger(s) for you. Find a reputable EV Service Provider (EVSP), who owns and operates a network of EV fast chargers. The EVSP will own the chargers, but they’ll also pay for the installation, O&M, the utility bill, and . . . wait for it, rent. The rent isn’t typically a lot of money, but at least this is revenue positive for you, and you'll have little to no frustration.
Rule Number 2, The Government Agency – Fund It, but be Careful – As a Federal or State agency you have a boatload of money (or some of you do), and will give it away to those who promise to install EV fast charging infrastructure. The trick is to not end up with stranded assets, or no assets at all, which can happen if the funding is provided to parties with little experience or a dubious business model.
Tip for Rule Number 2, Fund Those Who Can Prove They Know What They’re Doing – If you fund someone who fails, your agency will incur the wrath of those interests who already view the program as a waste of taxpayer money. It’s all about responsibility. If a party owns and operates a network of EV fast charging infrastructure, say more than a hundred locations, and they’ve done this for at least three years, that should be the ante. A strong hand would be if the owner/operator can demonstrate they are either profitable or have a path to profitability. This demonstrates they have a vested interest in customer service, uptime, and not walking away from the infrastructure (or going bankrupt) when the going gets tough.
Rule Number 3, The EVSP – It’s All About the Business Model – As an EVSP you can’t run on investor money forever. Eventually, you need to turn a profit. And, if you think that volume is the answer (volume of charge sessions, kWh throughput, etc.), you’re wrong. If you lose money at low volume, you’ll lose money at high volume. Cutting costs isn’t the answer, either. That leads to inadequate maintenance, low uptime, and very unhappy customers (EV drivers, funding agencies.)
Tip for Rule Number 3, Look to Augment Your Revenue Stream – The conventional wisdom is that an EV fast charging location can be profitable if it can attain a high utilization rate, say a minimum of 10 charge sessions per port per day. However, this can lead to queueing and the realization that more chargers are needed at that location. Some EVSPs use advertising to augment revenue, but this has its own set of problems for the fast charge business model. Carbon credits are helpful if the fast chargers are in Washington, Oregon, or California, but not a complete fix by any means. A promising way to augment revenue is to provide grid services. The US DOT’s National Electric Vehicle Infrastructure (NEVI) program, is set to sponsor charging locations with four or more high power fast chargers. By combining energy storage and an ultrafast microgrid controller with EV fast chargers, EV fast charging infrastructure could transform into a grid asset [1] as shown in Figure 1. The infrastructure requires additional capital investment, but the revenue from an array of grid services could turn operations profitable.
Figure1: NEVI Microgrid 600kW DC Charging Station w/Energy Storage and Renewables
Wrapping it Up
The majority of EV charging takes place at home using Level 1 or Level 2 EVSE [2]. This is also the least expensive and most convenient charging mode. With the mileage range of new EVs regularly exceeding 250 miles, but the average daily mileage of an EV driver less than 40 miles, a driver can go days without needing to charge their EV. However, not all drivers have access to home charging, and some drivers travel many miles daily.
EV fast charge infrastructure is an important mode for that last twenty percent of drivers who either don’t have access to long dwell time charging or are high mileage drivers (e.g., Uber/Lyft) and need fast charging to get through the day. Without reliable and cost-effective public fast chargers, EV adoption will suffer. Hence, the focus of funding agencies to develop networks of EV fast charge infrastructure along high travel corridors and within communities across the US.
However, as with traditional gasoline fueling infrastructure, the operating margins for public EV fast chargers are razor-thin, and great care must be taken by all parties to ensure that government funding is well spent. The consequence for not doing so is abandoned infrastructure that gives a black eye to the funding agency and inhibits the adoption of EVs. The above “rules” and “tips” are a starting point for giving the programs the best shot at succeeding.
References
[1] Botsford C. and C Wells, Use of Synchrophasors to Transform NEVI EV Charging Stations and Energy Storage into Distribution Grid Nodes, https://energycentral.com/c/ec/use-synchrophasors-transform-nevi-ev-charging-stations-and-energy-storage, EVS36 Sacramento, CA, June 2023.
[2] US Department of Energy, Electric Vehicle Charging Stations, https://afdc.energy.gov/fuels/electricity_stations.html.