For vehicle refueling needs, there are roughly 1.8 million gas pumps nationwide. There are also often multiple gas stations within the same block.
By comparison, there are only a handful of public charging stations. According to a recent White House report, there are just 130,000 public chargers nationwide, and most are for charging Teslas. However, the U.S. has set a goal of increasing public charging stations in communities to 500,000 by 2030.
That’s a lofty goal, and it will take a concerted effort and faster deployment to meet it. While the Infrastructure Law includes $7.5 billion to help pay for charging infrastructure, significant challenges remain.
High cost of installation and operation
Building and operating charging infrastructure for EVs is a costly undertaking.
Level 1 chargers can take up to fifty hours for a full charge. Level 2 chargers can take between four and ten hours. Both are likely to be used in homes or for private fleets. Public charging stations will need Level 3 chargers—direct current fast charging (DCFC) equipment—to reduce charging time to twenty minutes to an hour. But DCFC stations can cost up to $175,000 per unit, and that doesn’t include the cost of upgrading power grids. Most current grids can’t accommodate the additional energy draw without modification. Even with grants through states, businesses and government agencies will still have to provide 20% of the funding.
The most logical place for EV charger installation is at current fuel stations. However, stations generally don’t make much money off of gas sales. The average margin for gas is just 1%; profit comes from convenience stores, where gross margins can be 50% on items.
With longer times for EV charging vs. pumping fuel, it could be an opportunity for stations to add features to accommodate waiting drivers, but that also requires building modifications.
Besides the cost of the stations, there are ongoing operating costs, with the biggest being the electricity for charging. Charging four vehicles simultaneously can cost operators $250,000 in demand charges annually.
To avoid hefty supplemental fees from concurrent power draws during high-demand times, electricity storage units can draw power at low-demand times to reduce costs. However, such battery storage devices significantly increase the cost of installation.
Competition with utility companies
Many station owners and government entities also worry about costs when having to compete directly with the power companies that provide electricity.
Even some utilities are leery of investing. Xcel Energy in Minnesota had planned to install and operate 730 EV fast chargers but then sidelined those plans after proposed rate increases to fund the project were rejected. So, who pays for the build-out?
Need for public charging stations in metro areas, rural, and underserved areas
Most suburban EV owners are expected to install home charging units, but other locations have inherent problems. For example, in most metro areas, people don’t have garages or even drivers. In underserved communities, EV infrastructure is unavailable and nearly non-existent. In rural areas, drivers tend to log more miles, but charging is even less available.
Businesses may also not have the resources to pay for installation despite the grants available. Without investment in charging infrastructure, EV sales may stall.
Solutions to EV charging infrastructure challenges
Overcoming these challenges requires public-private partnerships to reduce upfront costs and ensure that charging stations are built equitably in the areas needed most.
Focus on high-traffic areas
Installing charging stations in shopping centers, retail locations, and other high-traffic areas can help offset costs through additional business for merchants during charging wait times. Tax incentives could encourage business participation, and businesses may be willing to subsidize customers to boost retail sales.
Encourage workplace charging
Employers can install EV charging as an employee benefit, and there are tax credits available to offset installation costs. Workplace charging eliminates range anxiety for commuters and avoids straining public chargers. This reduces the use of public charging stations, freeing up capacity while enabling employees to charge closer to their employers.
Promote tax incentives
Along with credits for workplace charging, federal, state, and local tax incentives can help provide funding for businesses and government entities. There are already significant incentive and loan programs through the federal government, and many states are also investing in sustainability programs. Promoting these tax incentives can help spur development.
Deploy creative charging alternatives
Battery swapping stations have been successfully installed in certain areas in China and Norway. Automated stations can swap batteries in minutes, saving time and avoiding large power draws at peak times. Although not yet widespread, it offers a creative alternative to traditional charging.
Procuring EV charging infrastructure
When you are ready to start building out your public EV charging infrastructure, Sourcewell can help. It has competitively sourced, ready-to-use cooperative purchase agreements for the procurement of EVs, charging infrastructure, and accessories.
By leveraging the collective buying power of 50,000 government agencies and educational institutions, Sourcewell can connect entities with vendors for lower rates.
Sourcewell awards contracts in electric vehicle supply equipment. These contracts assure that government entities can take the first step in creating the infrastructure to support green initiatives. See how Sourcewell can save you time and money while getting the fleet equipment that you need already on contract.