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Science & Technology

Vehicle charging stations search for a business model that will serve EV owners

Electric car chargers in the parking lot of Vons on Adams Avenue on Sept 13, 2024, in San Diego, Calif.
Electric car chargers in the parking lot of Vons on Adams Avenue on Sept 13, 2024, in San Diego, Calif.

Using an electric vehicle charger in public isn’t like going to the gas station. They’re harder to find and it takes longer to “fill the tank.”

But a study by the non-profit Next 10 is trying to map out a way for charging stations to turn a profit and make EV owners more likely to use them.

“We already know that the next generation of EV owners want more public chargers,” said Next 10 founder Noel Perry. “This report shows that building chargers where people are and where they want to be, especially for longer trips, is what’s best for both California drivers and charging station investors.”

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Gas stations tend to be stand-alone businesses, though they’re unlikely to sell only gas. Businesses like 7-Eleven sell gas, but they are also convenience stores that sell drinks and snacks to boost their profits.

Alan Jenn is a professor at UC Davis with the Institute for Transportation Studies, which authored the Next 10 report. Jenn said the stand-alone 7-Eleven model might be a good one for EV charging stations.

“With a gas station, most of the revenue and profit that they derive is not coming from the sale of gasoline. It is actually coming from selling soda and chips and that sort of thing. And I think that is the sort of model that needs to happen with charging stations.” Jenn said.

On the other hand, charging infrastructure is much more flexible as to where you can put it.

“Unlike a gas station that is its own stand-alone thing, we now have charging stations that might be next to a grocery store, or a shopping mall or a movie theater,” Jenn said. “And what we’re trying to understand is the value that people place on having stations in certain locations.”

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In San Diego an Adams Avenue Vons is one example.

EVgo has placed half a dozen fast charging devices in the parking lot. Jenn says the 350 kW chargers they have can charge a near empty battery up to the optimal level of 80% in about 15 minutes.

Charging a car battery to 100% is not advised as it can reduce the life of the battery.

Charger maintenance is clearly an issue. During a recent visit to Vons all of their car chargers were off-line. Store staff told me they contacted the company a week ago to fix them.

Graph showing the places where people want to be able to use an electric car charging station. Undated
Courtesy: Next 10
Graph showing the places where people want to be able to use an electric car charging station. Undated

The Next 10 report found that most EV owners charged their cars at home. But public chargers were more likely to be used if they were within 500 meters of a restaurant or grocery store. EV owners said they’ll pay more for speedier access to chargers and proximity to services they can use.

The study showed that freeway rest stops had the highest percentage of people saying they would use a charging station at a place like that.

Jenn said nearly all public chargers today benefit from some government subsidy, and they are a long way from being able to operate without one.

He added charging infrastructure needs to be available for people who live in apartment buildings who don’t have handy access to a garage.

What will ultimately be the best financial partnership to make a charging station work financially?

“It’s kind of the Wild West in terms of business models for charging stations, right now,” Jenn said. ”A lot of the larger box stores and grocery stores have partnered with charging providers … groups like EVgo and Electrify America.”

The Next 10 report says subsidies for public charging stations will continue to be needed for some time. Noel Perry said communities must be strategic and market-focused as they expand EV charging infrastructure.