“That’s kind of one of the bigger punch lines here. In the same way that gas stations don’t really make most of their profit from selling gas. It’s from concessions,” said Alan Jenn, one of the authors of a new report from the Electric Vehicle Research Center in the Institute for Transportation Studies at the University of California, Davis.
The report released Tuesday, Analyzing the Business Case and Consumer Preferences for Fast Chargers in California, lays bare the stark findings showing just how long it takes EV chargers to recoup their cost. At the current levels of utilization, and without government subsidies, it would take about a decade for a direct current (DC) fast charger — the most expensive pieces of EV infrastructure to plan for and install — to start turning a profit, according to the report.
“We need to think of the charging as an opportunity to get feet in the door for businesses,” Jenn said. “Selling the electricity, we’ve done the math. It just doesn’t look very good.”
Partnerships between legacy commercial enterprises like retail brands and charging networks are already becoming the norm. Walmart is a common location for Electrify America fast chargers. Similar agreements have taken hold, such as the partnership between Whole Foods and EVgo, the study points out, and drivers are taking note of these co-locating developments. A survey of EV drivers in California conducted by the researchers found they are 37 percent more likely to choose a charger with amenities like convenience stores and restrooms. Chargers located within 500 meters of restaurants and grocery stores see 2.7 to 5.2 times more charging visits per month than those not located near these features.
Research like this can serve as important guidance for policymakers, said Stephanie Leonard, director of research at Next 10, a non-partisan nonprofit in San Francisco supporting research on environmental and economic issues. Next 10 was a partner in the research and released the UC Davis report.
Research like this, Leonard said, can help local and state leaders “make informed decisions on charging subsidy investments and charging infrastructure siting to maximize the availability and use of the new and current infrastructure.”
An area ripe for more charging partnerships is the multifamily housing sector. The research shows 2 out of 3 EV drivers in California charge at home 90 percent of the time. Only 8 percent of survey respondents reported charging more away from home than at home.
UC Davis is conducting separate research which involves interviewing landlords and others from the multiunit dwelling (MUD) sector to better understand what sort of barriers they are seeing and whether, for example, their tenants have asked for charging infrastructure to be installed.
“I think the MUD stuff is still kind of early on. But it’s kind of the next phase of interesting infrastructure development that needs to happen,” Jenn said.
But when it comes to public charging, particularly in the costly DC high-speed sector, public subsidies are still needed and will likely be needed for some time to come, researchers said.
“As EVs continue to grow you’re going to need to have public infrastructure despite the fact that home-charging is one of the more prevalent ways of fueling the vehicle,” Jenn said.
The car industry seems to be pivoting somewhat toward plug-in hybrids, a sign signaling a lack of consumer confidence in the public charging infrastructure. Plug-in hybrids tend to serve day-to-day driving needs and are recharged at home, while trip driving often relies on the car’s internal gas engine to recharge the battery. However, a 2022 report by the International Council on Clean Transportation (ICCT) found that plug-in hybrids are not charged as much as they could be, and electric driven miles are 25 percent to 65 percent lower than the EPA sticker labels attached to the cars.
Similarly, the UC Davis report found plug-in hybrid drivers have little need for public chargers.
“This is going to have an effect on public infrastructure if there is a steady increased trend in selling those types of vehicles,” said Jenn.
But as EV sales of all types of vehicles continue to rise, the need for more charging infrastructure will not be diminished, Leonard said.
“Otherwise, EV sales will go down if people don’t feel confident that they can charge, either at home or on long distance trips, or if they live in a multifamily housing complex,” she said. “We need to be able to put these chargers where people need them.”
