A transportation revolution is underway, one that will transform almost every vehicle on America’s roads – the conversion to Electric Vehicles (EV’s).
Any major change in consumer behavior is a major opportunity for those who get ahead of the curve. The move to EV’s will create profit opportunities for many commercial enterprises that have never offered services to vehicle owners before.
In the case of residential commercial property, you can provide a crucial service to your tenants by installing EV charging stations in your parking areas. This will help you recruit and retain tenants, with many of them coming from an upscale income bracket.
Let’s review the market potential, the benefits you can receive from charging stations, and the investment involved.
A Surging Market
EV market penetration will surge between now and the end of the decade, due to manufacturer commitment, growing adoption, and government investment.
Manufacturer commitment—Several auto manufacturers (including Ford, GM, Hyundai, and Volkswagen) have committed to producing mostly EV’s by 2035 and have made multibillion dollar investments in development programs. Every major automobile manufacturer is already offering electric vehicles, and nearly two dozen new EV models will debut during the 2022 model year. Vehicles offered now run the gamut from an electric Mercedes-Benz S class to a Ford F150- Lightning truck model, and many cost less than $45,000.
Growing adoption—More and more households are buying EV’s. The fleet increased by 70% in 2020 alone despite total car sales being down almost 15% due to the pandemic. Experts estimate at least 40% of American cars and light trucks will be electric by 2030.
Government Investment—In addition to tax incentives for EV buyers, the federal government has made a major commitment to placing charging stations throughout America, including a network of 500,000 that will follow major highways. This will help increase adoption of EV technology by increasing the range drivers can conveniently travel.
Potential Benefits for Landlords
As electric vehicles move along the usual adoption curve, you’ll have an immediate opportunity and a near-term opportunity, both of which can pay off for years to come.
Immediate upscale tenants—The majority of EV owners earn more than $100,000 per year and have at least a four-year degree, making them the type of affluent customer who can boost profitability for any enterprise. The largest chunk of them (43%) are in their prime earning and spending years, 24-54 years of age. This makes them an excellent target market for upscale residences, and the ability to conveniently charge their vehicle at home will put you a cut above other properties.
Near-term middle-income tenants—As more Americans embrace EV technology (and as EV prices drop precipitously into the same neighborhood as gas vehicles), another, larger potential market of EV-owning tenants is emerging. These tenants will not necessarily be in the six-figure income range but will tend to be in their peak earning years and looking for the convenience of charging their EV right at their residence.
A study by Apartmentdata.com found that 61% of residential renters will pay more to live in an environmentally friendly apartment. If your building is part of the green revolution and also makes their lives easier, you will be able to attract that segment and charge them rent that matches the convenience and social impact you’re delivering for them.
Approximately 10% of parking spaces will need charging stations in the near term, a relatively small commitment.
Making Your Move
If you’re ready to take advantage of this new wave of change, or even just have some questions, Thayer Energy Solutions is glad to be your advisers. Get in touch, and we’ll help you create a strategy to power you to greater profitability.