It has long been theorized that EV charging stations located in a business’s parking lot should help that business to earn more money. It’s not complicated, and on the surface, it just makes sense. If you attract more people to your parking lot, or if they are compelled to stay there longer than the average person while their car is charged, why would you not get more money out of them, get more spending in your shop?
This is something that has been argued by EV drivers and EV charging stations for several years. The good news is we’re now getting more research showing this is the case.
Interestingly, aside from businesses closer to charging stations earning more revenue, a new study found that charging stations located in lower-income areas especially benefited nearby businesses.
The MIT study, focused on California and now published in the journal Nature Communications, found that “opening a charging station boosted annual spending at each nearby business by an average of about $1,500 in 2019 and about $400 between January 2021 and June 2023.” Naturally, those kind of savings could easily cover the costs of installing a station. “These increases are equal to a significant chunk of the cost of installing an EV charger, and I hope this study sheds light on these economic benefits,” said Yunhan Zheng, a postdoc at the Singapore-MIT Alliance for Research and Technology (SMART) and lead author of the study. “The findings could also diversify the income stream for charger providers and site hosts, and lead to more informed business models for EV charging stations.”
Notably, whereas much research on this subject had previously relied on surveys (which is what we at CleanTechnica had conducted and also mostly seen) or were quite small scale, this MIT research team went further. “For their study, the researchers collected data from over 4,000 charging stations in California and 140,000 businesses, relying on anonymized credit and debit card transactions to measure changes in consumer spending. The researchers used data from 2019 through June of 2023, skipping the year 2020 to minimize the impact of the pandemic.” Now that’s data collection! “To judge whether charging stations caused customer spending increases, the researchers compared data from businesses within 500 meters of new charging stations before and after their installation. They also analyzed transactions from similar businesses in the same time frame that weren’t near charging stations.” Well done. There’s not much more you could do for better research on this topic.
The conclusion was that a new charging station boosted spending at a nearby business by 1.4% in 2019 and by 0.8% per year from January 2021 to June 2023. “While that might sound like a small amount per business, it amounts to thousands of dollars in overall consumer spending increases. Specifically, those percentages translate to almost $23,000 in cumulative spending increases in 2019 and about $3,400 per year from 2021 through June 2023,” MIT summarizes.
Again, this matches what we’d always found when surveying EV drivers — and simply living our lives as EV drivers. Charging stations pull you into places you wouldn’t normally go, can also cause you to hang out in that place for longer, and thus easily leads to you spending more money there than you would have otherwise.
Wait a minute, companies that run charging stations now want local businesses to pay them for the privilege of installing one of their chargers? Instead of the company selling the recharging to EV owners paying the local business rent for use of their real estate?
There are a lot of different structures for the contracts on charger installations. Sometimes the business owner pays the utilities, sometimes the charging company does. Sometimes the land is sold to the charging company, sometimes leased. Revenue from the charger is usually split between the charging company and the business based on the specifics of the contract responsibilities and costs, of which there is a lot of variability.
In short, some businesses pay more to have them installed and take more revenue from them. Some pay almost nothing and don’t get any revenue from the charger, other than increased traffic in their businesses. That doesn’t happen often, because most deals have the business owner paying the utilities for the chargers, so they recoup that plus profit. This article is saying that businesses are statistically showing benefits from having chargers nearby.
I know I look for chargers while I’m traveling and pick hotels, restaurants, and grocery stores that have EV chargers at them. As more EVs get on the road, this will probably be more of a factor businesses pay attention to.