.png)
See the math behind EV fast charging profitability
An EV charging station is profitable when revenue from charging (and in-store sales) is greater than the cost to build and run it. There are three key components: reliability and utilization, energy management and O&M, and the brand experience. Our formula below shows how each lever adds up.
Reliability and discoverability are what create a good driver experience, and a good experience is what brings drivers back. Deployment speed is what determines time to power: every month saved is a month of growing utilization and revenue collected sooner.
"Electric Era was able to beat utility upgrade timelines and activate ahead of schedule to collect revenue early and deliver significant demand charge reduction."
"They made this project really easy... We needed someone who could walk us through the installation and know that when they gave us recommendations, they had our best interest in mind."
"Electric Era made it easy to get our charging station up and running fast. Their technology and support have kept our uptime at 99% and session success at 92%, which means drivers trust our site and keep coming back."
"The hardware solution is very good, but what convinced us to move forward was the Electric Era team. They are highly competent, motivated and all about getting things done correctly."
Revenue has to outpace operating costs, and the entire ecosystem matters. Reliable hardware, strong utilization, smart energy management, and a cohesive brand experience that brings drivers back all push a station toward profit.
Utilization is one of the top drivers of profitability. Discoverability on maps and apps, and retail location and adjacent amenities drive utilization. But even if those are present, an unreliable station will offset all of it. Reliability doesn’t necessarily drive usage, but it can preclude it.
Utilization is the volume throughput driver: if your per kWh charging margins are strong (charging price - electricity price), more utilization results in more profitability. But keep in mind that there are some operating costs that scale with utilization and other operating costs that can become punitive without cost control measures.
Demand charges can be one of a station's largest operating costs. They're calculated on the highest moment(s) of power draw in a billing period, so a few simultaneous fast-charging sessions can set a high fee for the whole month. Coincident Peak schemes can even set a high fee for a whole year.
There are a few ways to mitigate demand charges with on-site battery energy storage systems (BESS) paired with energy management systems (EMS). With advanced tariff optimization mechanisms, an EMS can dynamically reduce grid limits and leverage the BESS to provide required power during those periods to effectively balance the tradeoff between power costs and charging performance.
It typically takes 2 to 6 years for EV charging stations to pay back. This is the time it takes for the net operating profits to offset the initial capital cost. All of the components of the Profitability Formula impact the payback period. Note that faster deployment also shortens it: every month a station is live sooner is a month of revenue collected earlier.
Every EV charging provider offers a unique O&M package in pricing model, coverage, and overall reliability. Financial guarantees on per-port uptime and first plug-in success reliability are strong indicators of a high quality solution and high quality O&M.
The most common pricing model is a flat, annual per port or per station O&M fee. Others will charge a $ per kWh of energy delivered. The flat O&M fee gets diluted as usage increases, while the variable O&M charge continues to increase as usage increases.
Yes, EV charging increases in-store sales, particularly when the charging experience is integrated with core retail programs. Drivers stay on site for 20-40 minutes while they charge, and a branded charging experience, loyalty program integration, and in-store promotions at the screen convert that time into purchases.
Whether you want to include in-store sales in the profitability equation is a personal decision, but EV charging unquestionably does have a positive impact. For site host business models, it can be hard to prove the impact on in-store sales because the data is owned by different companies. When retailers own the EV charging station and are able to connect their programs, like loyalty member ID, it is easier to connect the data and prove the impact.
