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AR With the expansion of the electric vehicle (EV) market, the profitability of the EV charging business is gradually increasing. For companies that want to enter this promising market, it is essential to understand the EV charging business models in advance.
Common EV charging business models include free charging, partial cost recovery, and profit-earning models. This depends on what business objectives the charging point operator wants to achieve through EV charging—whether to increase traffic flow or to make money from EV charging. This guide offers a detailed analysis of these three EV charging business models and suggestions on how to choose among them.
How to Choose EV Charging Business Models?
When planning EV charging business models, some key points should be considered to earn benefits of EV charging stations for business:
1. What is the Purpose of EV Charging Services?
The business purpose directly affects your EV charging stations business models. It includes:
- · Directly obtaining charging revenue
- · Attracting drivers to increase sales
- · Providing benefits for employees or hotel guests
- · Reducing carbon emissions and fulfilling social responsibility
- · Shaping a green brand image
Different purposes determine the EV charging business models. If the goal is to directly earn charging revenue, then install commercial EV charging stations and set prices based on the local charging price range. For other purposes, it is recommended to install charging stations with a power range of 7kW-22kW, which can both attract customers and contribute to a sustainable future.
2. What’s the Dwell Time of Customers?
Dwell time is associated with charger types and the pricing of EV charging business models. If it is a brief stay of about 30 minutes in high-traffic areas, such as highways, then the profit-making model through fast EV chargers is optimal. If the customer reception time exceeds 1 hour, choosing the free charging mode and installing 7kW EV chargers will help you attract more customers.
3. Where is the Charging Station Installed?
Different locations, like public areas, offices, or highways, influence infrastructure needs. Aspects varying by location include space, electrical capacity, and smart grid connectivity. This determines the optimal products, such as AC or DC EV charging, to make money from EV charging stations.
3 Profitable EV Charging Business Models
From the perspective of cost and profit, when building profitable and sustainable electric car charging business models, you have three options: offering free charging to attract drivers, charging fees to offset costs and gain a pricing advantage, and the profit-making model that directly earns money from electric vehicle charging.
1. Free Charging
This EV charging stations business model offers free charging to attract new EV drivers, creating brand awareness over time. While electricity costs exist, more new users have driven an increase in the revenue from existing business activities to offset costs.
A. Pricing Model
No direct charges are passed on to users. Most companies install 7kW EV chargers in this model.
B. Advantages
- Free charging may be one of the decisive factors affecting drivers’ choice of consumption location. Compared with the payment model, this model attracts more drivers to try charging services with zero payment at your business location. It increases brand exposure, leading users to associate positively with companies providing this perk. Over time, it can offset marketing and client acquisition expenses.
C. Limitations
In this EV charging stations business model alone, operators must cover electricity costs from other revenue streams. Also, it is not practical for locations requiring fast charging, which consumes a lot of power.
D. Suitable Locations
E. Target Audiences
Budget-conscious customers and those staying for more than one hour to fully charge batteries before departing prefer this model. The longer dwell time helps offset the lack of direct revenue.
2. Partial Cost Recovery
This electric vehicle charging business model strikes a balance between generating income and attracting customers through partial charging fees.
A. Pricing Models
The price strategy is based on your operating expenses, including electricity, facility, maintenance, operating costs, etc. The charging fees may be based on charging time or power consumption.
Most companies install 22kW to 60kW EV chargers in this model.
B. Advantages
The EV charging stations business model earns modest profits to cover base costs. Compared with the free charging model, this model provides a stable income stream for enterprises, which helps to maintain long-term operation and development.
Moreover, this EV charging business model remains competitive against expensive options, attracting and retaining more EV charging customers.
C. Limitations
Firstly, the price needs to be carefully set to ensure that it can both attract customers and cover costs. High prices may reduce the attractiveness of the service.
Secondly, compared to free charging, pricing services may lower the willingness of some users to use them, especially those who are price-sensitive.
D. Suitable Locations
- It’s suitable for shopping centers, hotels, restaurants, countryside, and communities, where dwell time averages more than one hour. When adding partial cost recovery EV charging business models to these locations, drivers may charge while eating or must charge due to difficulty finding other charging stations.
E. Target Audiences
It’s preferred by people willing to pay certain fees for regular and dependable charging access close to locations like work or errands. Users who frequently require charging services are also suitable target audiences.
3. Earn Profits
The profit-earning model directly generates income by setting high EV charging fees. Multiple options can be adopted alone or together.
A. Pricing Models
Several EV business models exist in this category. Time-based fees are calculated by minute. This mode is simple and clear without considering the differences in charging power and battery capacity.
Electricity-based pricing charges for the power consumed. This method is fair and can reflect the actual electricity consumption of users.
Membership-based pricing also exists. It offers a certain price discount or service priority, which is suitable for users needing frequent EV charging. It establishes a loyal customer base. Most companies install fast DC Fast chargers in this model.
B. Advantages
This electric charging station business model can generate direct cash flow to sustain long-term operations. It can yield significant economic benefits over free and partial cost recovery options.
C. Limitations
Compared to free or partial cost recovery models, purely profit-oriented pricing may reduce its appeal to users. But the price won’t be too high to limit customers’ usage.
D. Suitable Locations
It’s suitable for remote highways, remote areas, high-demand commercial areas, and residential areas with high traffic. Users in these locations have an urgent demand for charging services and are willing to pay more for convenient and fast charging.
E. Target Audiences
It’s suitable for drivers requiring fast charging on the go, where each minute counts more than the price. Emergency top-ups are suitable due to urgent energy needs.
Tips: To avoid deterring drivers from visiting your charging points due to high charging prices, it is recommended that you first understand the prices at various local charging points and analyze their relationship with traffic flow. This will help you set prices within a range that drivers can accept, maintaining the long-term profits of your charging station.
EV Charger Solutions for Various Business Models
The requirements for EV charger types vary across different business models. It directly affects the attractiveness, cost-effectiveness, customer satisfaction, and long-term sustainability of the service. EVB Charger provides products suiting diverse car charging station business models:
22kW Type 2 AC EV Charger
It’s an AC EV charger ideal for residential and office settings with its efficiency, value, and universal compatibility. Its stable charging capability provides long-term battery health.
Floor-mounted AC EV Charger
Its sturdy housing makes it ideal for high-traffic public areas like hotels, restaurants, and shopping malls. Low maintenance costs and simple operational processes increase flexibility.
Floor-mounted 3 Guns DC EV Charger
It’s a high-speed option satisfying urgent energy needs on the go. It’s equipped with three charging guns supporting CCS1, CCS2, and Chademo, catering to a broad range of EV models.
2 Guns Advertising DC EV Charger
Its built-in 43-inch advertising screen allows you to make money not only from EV charging stations but also from the advertising screen to earn advertising revenue.
Conclusion
The electric car charging business models need to be selected based on the type of business and the intended purpose. Whether it is free charging, partial cost recovery, or the profit-making model, by planning the right location, pricing, and type of charging stations, you can make money from EV charging station businesses.
Moreover, choosing a reliable car charger supplier is crucial for seizing these EV business opportunities. At EVB Charger, we offer solutions adapted to different scenarios through products that support viable pricing approaches. Contact us now to choose EV charging for business!
