For years, the CRE industry, especially retail and multifamily, has invested in electric vehicle chargers. Many in CRE have tried to anticipate increased use of the vehicles and understand how much charging they had to make necessary.
For a long time, this wasn’t an easy or cheap task. There are costs of installation and power supplies. These get multiplied by the number of parking spaces to be converted. EV charger installation and use bring increased insurance risks.
Trying to pay for the conversions has brought up different approaches so retail and multifamily owners and operators can afford to add charging, whether public-private partnerships or sale-leaseback financing. Still, it’s been money in and a question of whether there would be enough cash back to pay for everything.
However, in the world of retail, it looks like charging may finally be paying off, according to the New York Times, which referred to a number of studies on the topic.
One study, revised in September 2023, from Yash Babar of the University of Wisconsin Madison and Gordon Burtch from Boston University estimated a 4% increase in monthly visits to retailers within 150 meters of a newly installed Tesla Supercharger. Monthly consumer spending increased by about 5%. The effect is heightened when the charger is one of the first to appear in a county.
A study in Nature Communications looked at the broader economic impact of 4000 EV charging stations on 140,000 businesses in California. One charger increases annual spending at a nearby establishment by 1.4%, or $1,478 in 2019 and 0.8%, or $404, from January 21 to June 2023. When the establishment is within 100 meters of a charger, the increases were 2.7% in 2019 and 3.2% in the second period. The public charging stations “tend to attract higher-income, exploratory visitors, and local residents.” The stations also “notably enhance businesses in underprivileged areas.”
These improvements in business make sense, as owners of EVs are likely wealthier than most people driving. But that could be a secondary factor. There is the income from the charging. As the Times wrote, some retailers like Walmart are private-branding chargers rather than using third-party equipment and services. Some of the financing options available provide part of the charging revenue back to the owner of the parking.
“Companies are beginning to see charging as something that can potentially help the bottom line,” Graham Evans, a director at S&P Global Mobility, told the Times. “It’s going to become more ubiquitous rather than a token gesture.”