Electric Vehicle (EV) Chargers can offer a great additional revenue source for businesses — but how much money can your business actually make? What are the typical ROI periods for these types of projects?
This is logically one of the biggest upfront questions PEC clients have as they begin exploring these projects. It is also one of the most challenging questions to accurately answer.
Putting together a charger utilization and revenue forecast that your business can actually rely on requires sophisticated analysis across a wide range of variables. These variables range from regional EV adoption trends, to pricing strategy, down to the charging experience that is provided to drivers (impacting new & repeat visits).
If your business is interested in tapping EV charging as an additional income source, see how PEC approaches revenue and utilization forecasting to help clients better understand income potential and make a confident investment decision.
Understand Regional Demand for Charging
To accurately forecast revenue, the first step is understanding the regional demand for EV charging. This requires analyzing two critical factors:
Charger Density and Competition:
The number of available chargers in your area directly impacts your utilization rates. High-density regions may have stiff competition, but underserved areas offer an opportunity to capture market share. Assessing the competitive landscape helps identify whether your location will be a primary choice for EV drivers or one of many options.
Local EV Adoption and Growth Trends:
EV adoption rates vary widely by region. Urban areas and regions with robust environmental policies typically see faster growth in EV ownership. Reviewing regional adoption trends can help determine the potential number of drivers who may use your chargers.
Predict the Daily Usage Patterns of Your Drivers
Not all properties will see the same charger usage patterns, so it’s essential to consider how your location type affects demand:
- Residential Properties: Chargers at residential properties often see consistent overnight usage. Long dwell times make these locations ideal for slower Level 2 chargers.
- Hotels: Guests with EVs will likely plug in overnight but may also need midday top-ups, especially in destinations with attractions.
- Offices/Workplaces: Daytime charging dominates these locations as employees charge during work hours. Predictable 9-to-5 usage patterns allow for optimized utilization strategies.
- Fleet Locations: Depending on fleet type, operators may require rapid turnaround on charging. These locations need high-reliability chargers capable of fast-charging multiple vehicles in a short time frame.
Understanding these patterns helps build accurate daily utilization forecasts.
Account for Driver Behaviors
Revenue forecasting is also influenced by how drivers perceive and interact with your chargers. Key factors include:
- Pricing Competitiveness: Offering a competitive price per kWh or per session ensures your chargers remain attractive compared to alternatives.
- Port Availability and Ease of Access: Drivers prioritize stations with minimal wait times and straightforward access. Sites that are poorly marked or consistently occupied may see reduced usage.
- Charger Reliability & Uptime: Downtime impacts both revenue and customer trust. A reputation for reliable chargers can drive repeat business, while frequent outages can deter usage. Different manufacturers may offer data on the average “uptimes” of their products that can be incorporated into your forecast.
These behaviors collectively shape how often your chargers are used, impacting overall revenue.
Find Your Optimal Price Point
Your pricing strategy directly affects your ability to attract drivers and generate revenue. Consider:
- Charge Fees and Revenue: The primary income source is the fee charged per kWh or per session. Finding the right balance ensures you remain competitive while covering costs.
- Stall Fees: Implementing stall fees for vehicles that remain plugged in after charging is complete can increase turnover and optimize utilization.
- Cost of Energy and Demand Rates: Understanding your utility’s energy pricing structure, including demand charges during peak hours, helps you price effectively and maximize profitability.
Experimenting with pricing models and monitoring driver responses can help you find the sweet spot that maximizes revenue without deterring users.
Determine Your Utilization & Payback Period
Once you’ve assessed demand, usage patterns, and pricing strategies, the next step is calculating your charger utilization and payback period.
- Goals and Revenue Model: Determine whether your primary goal is to provide an amenity to attract more customers or generate revenue directly. Each approach requires different forecasting assumptions.
- Infrastructure Needs: Make no mistake, EV charging stations are construction projects that often require boring, trenching, running conduit, and oftentimes adding electrical capacity to power the chargers. Understanding your full project scope upfront, in addition to the costs of your charging hardware, software, network fees, installation, and maintenance, are key to predicting an accurate payback timeline.
- Networked vs Non-Networked: Networked chargers, which provide remote usage monitoring and control capabilities, typically have recurring subscriptions and fees. Networked chargers will also provide usage insights for testing different price points. This will impact both costs and usage growth over time.
- Rebates and Incentives: Federal, state, and utility rebates can significantly offset upfront costs and shorten ROI timelines. Ensure these are factored into your payback analysis.
Understanding these factors enables a realistic estimate of when your investment will break even and turn profitable.
Drive Your Business Forward with PEC
Forecasting revenue for EV charging stations involves analyzing a complex web of variables, from regional demand to driver behavior and pricing strategies. At PEC, we leverage our expertise and tools like our proprietary PredictEV Charge platform to help businesses confidently assess their revenue potential. By analyzing your specific location, customer demographics, and energy costs, we deliver actionable insights that enable you to make informed decisions. Contact us today to see how we can help you unlock the potential of EV charging as a revenue source while supporting a more sustainable future.
