Including electric car charging stations in new residential projects has become increasingly popular as developers take into account millennial and Gen Z prerogatives as well as the overall acceptance of efforts to reduce greenhouse gas emissions worldwide. There are many ways to incorporate these charging stations into real estate projects, and they may actually be an investment opportunity in the appropriate scenarios. Here’s everything you need to know about incorporating electric car charging stations in your next real estate investment.
The electric vehicle trend
Electric cars have become an increasingly popular mode of transportation, with nearly 7 million of them zipping around our streets and highways. This is a small fraction of the 276 million registered vehicles in the United States in 2019, but electric cars have shown consistent upward growth over the past decade, with a 40% year-over-year increase in sales from 2018 to 2019.
The Biden administration has stated it will be transitioning the entire federal fleet of vehicles over to electric, and there are tax credits worth thousands of dollars you can use when purchasing a new electric vehicle. Major companies are also jumping on the bandwagon, with brands like Amazon (NASDAQ: AMZN), IKEA, and AT&T (NASDAQ: T) transitioning their fleets to electric vehicles. With consumers, businesses, and the government all in support of electric cars, it seems this trend is set to explode in growth and will see mass adoption in the not-too-distant future.
The need for charging stations
Two things are necessary for electric vehicles to stay on the road: charging stations and an electrical grid that can support these stations. Without charging stations, all those electric cars would be useless. These stations can be installed in private residences and commercial spaces.
There are nearly 100,000 charging outlets in the United States, not including private residential outlets, for plug-in electric vehicles as of February 2021. A number of providers will install, maintain, and connect users to an outlet. For example, ChargePoint has around 60,000 charging stations in their network and an app that will help drivers locate one of the hundreds of thousands of places to charge.
Real estate investors and developers are starting to account for the growing need of charging stations in both residential and commercial developments. These stations can be added later but are much easier to access and more cost-effective to install when planned into a development.
This past year has seen residential and mixed-use developments in Arizona, North Carolina, and Missouri include charging stations in their proposed plans, just to name a few. Not only does this increase the market for their home sales and rentals, it can actually be a profitable investment.
How to invest in charging stations
You can currently make money in your real estate development by installing electric vehicle charging stations. No one with an electric vehicle can live in a home without access to an outlet. By including them in the development, you open the door to a wider pool of tenants or buyers.
There are ways to structure the added electrical cost from the charging station to the tenant. For commercial properties, you can list the station on various apps so customers are literally funneled in your direction when looking for a charge. While they kill time as the vehicle charges, they can stop in for lunch, browse your store, or get a massage.
The Millionacres bottom line
Electric vehicle adoption is growing quickly, and as with any growth in industry, there's always a slight lag time as companies figure out how to best meet the needs of the consumer while making it a profitable opportunity for investors.
As of now, not many providers have a way for charging station owners to directly profit off the charge itself. But this is starting to change. Xeal Energy has created a platform where you can earn passive income from installing charging stations in workplaces and apartment buildings. It even has a return on investment (ROI) calculator you can use to make sure it makes sense in your situation. The company claims to have returns of up to 700%, depending on your scenario.
As the trend continues, it's very likely more companies will be created to meet investor needs. So if you're planning your next real estate development, do a little research to determine the best fit for your project so you can profit from the electric vehicle trend.