4 EV Charging Business Models for Hosts (You)

Introduction

When I first entered the EV charging game, I assumed it was as simple as buying an EV charger, plugging it in, and generating profits. It turns out it’s much more complex than I anticipated. Various models exist, each with their own pros and cons. This article explores the four primary EV charging models, ranging from offering free charging to models where a third party covers all the costs. We will detail each model to help you find the best fit for your business.

Four EV Charging Business Models for Hosts

There are a variety of different business models for hosts to offer EV charging to their customers. Different companies use different terms but there are four main business models. This is where you really have to ask yourself what your main goal is from providing EV charging.

1. Free Charging Model

The primary goal of this approach is to attract new customers. I wouldn’t recommend doing this in areas where electricity prices are high. Here in British Columbia energy is relatively affordable, so offering free charging could bring in more customers at a relatively low cost to your business. This strategy can be highly effective in certain scenarios.

PROS

• Offering free charging is a generous option. There’s no doubt EV drivers will love you if you’re offering free charging because it’s rare to find these days.

• This strategy works well in attracting customers if your business requires extended stays, such as a consulting service or health care.

• By providing free charging, you can generate a significant amount of carbon credits as people will be eager to use your service.

CONS

• This option could be expensive and may become another expense for your business.

• Acquiring new customers or ensuring repeat business must hold high value for your company to offset the increased electrical bills.

• To avoid excessive electrical costs, you may need to offer slow charging with low kW.

2. Break Even Model

This method sufficiently covers the costs of the EV charging project. Most EV drivers are familiar with electricity costs from charging at home. Therefore, if you offer a rate similar to home charging, drivers won't be bothered. They're used to paying a certain amount each day when they charge at home, so seeing a comparable rate at your business won't be an issue. Even if the rate is slightly higher to cover the cost of the chargers, it shouldn’t be a problem for them.

Remember, you'll also be collecting carbon credits while the customers pay for the project. You'll be breaking even and still generating carbon credits for your own use. Currently, these carbon credits are worth about $500 Canadian and their value is expected to increase significantly in the coming years.

PROS

• I like this one because it’s a win-win situation.

• Customers will still be pleased with the low cost of charging.

• Potential to generate Carbon Credits

CONS

• Less appealing to drivers compared to the free option.

• This option has the fewest disadvantages, making it a well rounded choice.

3. Profit Making Model

Everyone likes making money. In this model, you set the price high enough to make a profit but it comes with some risks. Be careful not to set the price too high. Most EV drivers are willing to pay above the cost of electricity but within a limit. They have experience with various EV charging stations and understand the range of pricing models. As long as your prices are within these limits, you can maintain a balance between making a profit and providing a service at a fair market value.

Remember, you'll also be generating carbon credits on the backend, so you may not want to set the profit margin too high. The carbon credits also add significant value. Be cautious not to get carried away or greedy with this model but if done right it can be a valuable addition to your business.

PROS

• Additional revenue stream for your business.

• Chargers pay for themselves, allowing you to recover your investment quickly.

CONS

• Avoid alienating customers by overcharging for the service.

• Ensure there is no nearby competition offering cheaper and faster charging.

4. Zero Project Cost Model

Some EV charging companies may offer to finance the entire EV charging project. They may even offer to provide a monthly lease payment However, they would retain all profits and carbon credits generated from the chargers. This model can be advantageous in certain situations. If you're not interested in managing the installation of EV chargers or financing the entire project, yet you wish to provide EV charging as an amenity to your clients, this could be the ideal model for you. These companies cover all project costs, but in return, they receive 100% of the rewards generated by the chargers.

The major drawback of this no-cost model is that you forfeit your carbon credits. If the EV charging company finances the entire project, they will secure all the revenue, profits, and most importantly, the carbon credits. Carbon credits are often overlooked because many people are unaware of their existence, but they represent the most valuable aspect of EV charging.

PROS

• It's easy and simple. Someone else handles the work and covers the cost.

• You can offer an additional amenity for your customers to use and enjoy.

• It can attract more business without any expenses on your behalf.

CONS

• You won't receive any carbon credits.

• If you're willing to install EV chargers, it might be worth considering profiting from it, rather than giving away control.

• You won't have control over the pricing or functionality of the chargers, which could negatively impact your business if customers have a poor experience.

Conclusion

In conclusion, diving into the EV charging business is a strategic move for any host. The four models highlighted above each offer unique opportunities and challenges, and the right choice largely depends on your business objectives. Whether you're looking to attract new customers, break even on costs, make a profit, or leave the details to a third party, there's a model that fits your needs. With this information you can position your business as a leader in the electric revolution.

Remember, I'm here if you need anything so please reach out anytime.

Catch you on the flip side,

Strong Energy