The single most important change in transportation in 100 years is already happening: The widespread conversion to electric vehicles, or EV’s.
While policymakers are betting on EV’s as a remedy for climate change, the real story is what manufacturers and drivers are doing. For example, Ford has introduced the F-150 Lightning truck, GM has announced a $5 billion development investment, and Volkswagen plans to go electric-only by 2035. Each vehicle manufacturer has EV models on the market or launching soon, and customers who are ready to buy. The EV fleet increased by 70% in 2020 alone and will grow to 115 million vehicles by the end of the decade, with 40-50% market penetration in the US.
Any major change in consumer behavior is an opportunity for those who get ahead of the curve. As a commercial property owner, you can profit from this trend by installing electric vehicle charging stations at your sites.
Retail Properties Can Increase Traffic, with Affluent Customers Brought Right to Them
If you lease space to retail businesses, charging stations can boost their success, and yours. Typically, an electric vehicle will need to charge for at least 30 minutes. Even better, electric vehicle manufacturers supply apps that direct drivers to local charging stations, and the majority of EV owners earn more than $100,000 per year.
In other words, once you’ve installed charging stations, someone else sends customers to your site who have an above average income and time on their hands. It’s a perfect situation for retail profit.
Residential Landlords Can Attract More Upscale Tenants
As more and more consumers base their purchasing decisions on environmental impact—and as EV’s move through the early adopter stage–they will begin to purchase these cars and choose housing that supports them. Indeed, tenants are already choosing greener rental spaces and condos. For example, 61% of residential renters say they will pay more to live in an environmentally friendly apartment, according to surveys by Apartmentdata.com.
What does this mean for residential landlords? First, it means getting a tenant that won’t choose a building with no charging capability. Second, these tenants have a level of income that makes them an excellent target market for higher end rental properties and single-family homes. All you have to do is make sure you provide a station that will accommodate their vehicle.
Industrial and Office Properties Can Attract New Tenants
As the EV fleet grows, so will the number of them being used in company fleets. Those vehicles will need charging and having those stations available may be the difference between signing or losing a commercial tenant.
Even without fleet vehicles, charging stations make your property more attractive. Business owners and C-suite personnel are in the current target market for electric vehicles, and these leaders are just as eager to go green as residential tenants are. With minimal expense (see below), you can set your property apart.
Now is the Time, and the Investment is Smaller Than You Think
In areas where EV’s are common, it’s recommended that developers equip 10% of parking spaces to charging stations, a relatively small commitment. Plus, A number of EV manufacturers will install stations for free in order to make life easier for their customers and sell more cars. That means you may be able to get all the benefits without any upfront cost.
If you do have upfront expenses, they can be offset by a federal tax rebate for up to 30% of the project cost. Unfortunately, these incentives will end on December 31st of this year, so the time to make a move is now.
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.