How to start an EV charging station business?

This is the first question about setting up an EV charging station. It can be an excellent business, provided you choose a location where you will get several vehicles throughout the day. This means the first thing you should do to make the EV charging station you set up to become a lucrative business is to select a strategic location. The location should be where several electric vehicles come throughout the day to recharge their batteries.

If you are thinking of a long-term investment, then EV charging stations are an excellent investment because people nowadays are becoming environmentally conscious. Entrepreneurs are increasingly investing in EV charging stations primarily because of the growing market requirement. You will find that a commercial EV charging station installation is a scalable business opportunity. In other words, once you install an EV charging station, you can change the installation unit as its demand grows. According to surveys and reports, the need for EV charging stations is bound to increase as there is steady growth in the market for electric vehicles. Hence, if you plan to invest in an EV charging station, it is bound to be a profitable business proposition.

What is the market demand for EV charging stations?

When evaluating a product’s market, you must consider the present demand for the item and whether its demand will surge soon. It would be best to compare the investment you are making presently and how soon you can realize it. The demand for electric vehicles is steadily rising, so the need for EV charging stations will only increase. According to a report filed by Global EV Charging Infrastructure Market Report in 2021, there are nearly 1.13 million EV charging stations worldwide, and the number will rise to 10.79 million by 2027.

Statistically speaking, this shows a high-paced compounded annual growth rate or CAGR of 26.6%. Presently, i.e., in 2023, the market shows that nearly $1078.2 million is invested in EV charging stations in the US alone, which will rise to $113889.1 million by 2033. Thus, based on all these statistical reports, the market demand for EV charging stations is relatively high and will only rise in the future. As an investor, if you are concerned whether your investment will be safe, you can be assured that it will be one of the safest investments for two reasons.

The first reason is that the growing concern of the modern generation regarding the environmental crisis will increase the demand for green vehicles. Subsequently, this will lead to an increase in the need for EV charging stations. The second reason for the EV charging stations business being a safe investment is an increased investment in the economy itself in that direction. Hence, you can be assured that if you are to install an EV charging station in your neighborhood, it is bound to produce good returns.

What should you consider when you start an EV charging station business?

Once you are assured that you want to start an EV charging station business, you must understand the several steps involved in the process. According to an article in the Wall Street Journal, the issue with an EV charging point is that each has a specific app, key, or fob the customer must use. Thus, it is a good idea to hire experts who will provide you with a comprehensive solution regarding installing the charger, setting up the software, and ensuring that your charging hub is accessible through an app. This is essential so your clients can access the nearest charging point and are not worried about their vehicle losing the charge entirely in the middle of nowhere! Here are some of the essential factors that you must consider when you start an EV charging station business:

• Choosing the charging hubs: You must first carefully select the location for the commercial EV charging station installation. You must have a network of hubs to receive many vehicles throughout the day. For example, you can place an EV charging point near a departmental store as this is one such place that people will visit at all times of the day. Similarly, retail centres, commercial complexes, and cineplexes are suitable places to set up EV charging points. People, when they go shopping or while going to watch a movie, often leave their vehicle attached to a charging point so that the battery can get fully charged.
• Similarly, you can set up a charging station in the parking lot of a commercial centre that houses several offices. This way, the people who come to work every day can get their vehicles charged at the EV charging point that you have installed. Thus, selecting suitable hub locations is the first step in ensuring your EV charging station business succeeds. This will ensure that the charging points are used regularly and continuously, making it easier to realize your investment faster.
• Getting the necessary permission: You do not need a separate license to set up an EV charging point, but you need approval from the Ministry of Energy. Moreover, the different license applies only if you are an entrepreneur. If this is your first business venture, you must have all your legal papers and your business license. After that, you must get the necessary permission from the Ministry of Energy. You must also ensure that you get the required authorization from the local authorities to complete the setting up of the EV charging hubs without any hitches. This is where hiring experts become necessary. There are certain legal and construction aspects you can only manage with the help of experts. When you hire experts to set up the EV charging hubs, you can be assured that they will take care of all the aspects right from acquiring the necessary permissions to setting up the EV charging points.
• Getting the necessary exposure: To ensure that your EV charging stations business is a commercial success, your business must get the required direction. This means developing a suitable app and promoting your business. This may seem relatively simple, but developing and connecting the software to an app your clients can easily download on their mobile phones can be complex. You will find that most EV owners are anxious that their vehicles might run out of charge while they are out on a drive. Hence, to alleviate this anxiety, you must provide your clients with an app where they can locate the rearrest charging points of your company throughout their drive. This can reduce your client’s tension and make it easier for your company to create a loyal customer base.
• Moreover, getting your company the necessary exposure on several marketing forums is also essential to help promote your company. If you hire experts, you can be assured of all these services; you will install and maintain your EV charging stations. You must have a service level agreement or SLA with such a company, and they will provide you with complete support regarding the maintenance and marketing of your EV charging stations.

When starting an EV charging station business hiring experts is essential to help you through the entire process. You must consider several factors besides installing the chargers, maintenance, and the marketing campaign when you start a business of EV charging points. You must meet the customer’s expectations and, if necessary, keep upgrading the infrastructure to meet the growing requirements.

If you are new to the business, you will find that with the necessary technical support, running a successful EV charging station business becomes quite complicated. Sometimes, entrepreneurs believe starting a company with one or two charging points is a good idea. But if you start with a few charging points, getting a suitable return on your investments so that the turnover is sufficiently high will take longer. Thus, evaluating your business proposition, discussing it with experts, and starting your EV charging station business is essential.

Selecting suitable charging units

When you start an EV charging station business, evaluating the type of charging point you can install and the expenses involved is essential. In most cases, you will find that the Level 1 charging point is the least expensive. However, these are suitable for domestic purposes as these charging points take nearly 35 hours to fully recharge a car’s battery. Thus, you will find that a Level 1 charger is not a suitable investment for commercial purposes. The types of chargers that you can install in commercial charging hubs are as follows:

• Level 2 charger: You can choose to install Level 2 charging points that are universal or vehicle specific. Installing a Level 2 charging point can start from $2500 to $5000 per unit. Depending on the type of charger and its specifications, the price of the charging point can rise. A Level 2 is an AC charger, and it takes nearly 2 to 13 hours to recharge a car’s battery completely. The difference in the charging time depends on the output of the charging point. A Level 2 charging point can have an output from 3kW to 22kW. You can place the charging point in locations where the vehicles will stay for a more extended period, such as a hotel parking lot or the parking lot of an office building, areas where a car will remain for an extended period, such as airports and overnight parking areas. Here you can plug in the vehicle at night and have a fully charged car in the morning.
• Level 3 charger: This is the fastest of the commercial EV charging points. In a Level 3 charging point, you will use Direct Current, making charging the vehicles easier. A Level 3 EV charging point can deliver 50 kW and 400 kW power. This makes it easier for you to recharge the vehicles faster. You will find that the charging point can recharge a standard car battery within one hour. However, as a Level 3 charger uses Direct Current, you must acquire special permission to install such a charging point. Unlike a Level 2 charging point, a Level 3 charger requires a 480 Volt electrical source. You can install it in public stations, parking lots, and even petrol pumps. As the energy output of a Level 3 charger is higher so is the investment. The cost of installing a Level 3 charger starts from $40000.

Thus, when installing an EV charging station, you must check the type of charger you want to install and whether you need special permission. You must also evaluate the investment that you have to make for installing the Level 2 or Level 3 chargers. Based on all of these, you must take a decision that suits your requirements and your budget.