As more electric vehicles (EV) make their way into the U.S. transportation fleet, building an expansive network of publicly accessible charging locations is necessary. The movement also begs an important question: How can retailers enter this emerging business sector?
A new report from the Fuels Institute Electric Vehicle Council, “Best Practice Guide for Installing and Operating Public Electric Vehicle Charging Infrastructure,” shares insights on how business owners can make strategic decisions about investing in charging infrastructure, from the initial conversations to ultimately serving customers.
Few EV infrastructure best practice guides address the questions and issues that site hosts like gas stations may encounter as they weigh adding EV charging. The comprehensive new report helps to bridge that gap by addressing a range of important considerations—from equipment costs to utility demand charges to common issues in the permitting and site planning processes. Plus, it shares case studies from retailers like Sheetz and Kum & Go that count among the early adopters in the EV charging game.
“The EV landscape continues to change at a rapid pace,” said John Eichberger, executive director of the Fuels Institute, adding that the Electric Vehicle Council recognized a significant need to grow and develop a public charging network. However, too many questions about what it takes to develop a successful project can lead to uncertainty and inaction. “This report takes a holistic approach to answering these questions to increase confidence and allow business owners to engage with utilities, equipment manufacturers and local permitting authorities more comfortably and effectively,” he said.
The report analyzes considerations in three key areas:
- Developing the business case—This section covers questions and issues related to assessing the public policy environment in various jurisdictions, the type of ownership model a site host may want to pursue, estimated costs (including planning for soft costs) and site selection, among other things.
- Utility engagement—This section covers issues and questions related to working with utilities to develop EV charging station projects, including assessing interconnection issues, understanding the utility’s interconnection requirements and fee structure and proactively engaging with utilities to successfully shepherd projects through the installation and commencement process.
- Working with local authorities that have jurisdiction over site locations—This section largely concerns the permitting process and working with the related governing bodies to successfully install and begin operating the charging station project.
“Understanding the various issues involved in evaluating the business decision to invest in public charging is important,” said Eichberger, adding that the report dives deep into the factors involved with installing a successful EV charging station and covers questions related to assessing the public policy environment.
There were an estimated 43,225 Level 2 EV charging stations and 6,049 direct current fast charging stations in the United States as of May 2021, according to the U.S. Department of Energy. While studies show most EV owners (80%) charge at home, this behavior is poised to change as the market grows. One 2019 analysis by the International Council on Clean Transportation found that at least 100,000 public and workplace chargers will be needed across the 100 most populous U.S. metro areas by 2025 to serve the more than 2.6 million new EVs expected in those areas. The mix will include both battery-electric and plug-in hybrid vehicles.
The Biden Administration aims to deploy 500,000 EV chargers by 2030, achieve a 50% market share for EVs by 2030 and increase fuel efficiency requirements for all light duty vehicles. At press time, the House had proposed a $12,500 tax credit toward the purchase of EVs made by U.S. unionized automakers. The bill also includes resources for EV charging infrastructure and hydrogen fueling.
There are generally two site host business models for EV charging: owner-operator and third-party owner-operators, and there are advantages and disadvantages to both.
In the owner-operator model, the site host purchases the needed equipment from a charging service provider and then works with a separate contractor to install the equipment. The owner-operator has the sole responsibility for the charging station’s operation, maintenance and utility interconnection.
In the third-party model, a vendor installs, operates and maintains the charging station and collects revenue directly from the use of the station and may charge membership fees for access to the network of charging stations. Third-party owner-operators generally lease space in a host’s parking lot and remit a fee or revenue share from the charging station to the site host. Under this scenario, the third-party operator will likely own any and all environmental attributes that are used to gain state or federal credits and/or incentives. Companies involved in third-party owner-operator charging include Tesla, EVgo, Electrify America, ChargePoint, EV Connect, Blink Charging and Greenlots.
Convenience Retailer Case Studies
Altoona, Pennsylvania-based Sheetz operates over 580 store locations throughout Pennsylvania, West Virginia, Virginia, Maryland, Ohio and North Carolina. Sheetz initially developed its first sites on its own in 2013 but in 2017 partnered with Tesla to install, operate and maintain supercharging stations as amenities for customers. Tesla’s proprietary global Supercharger network includes more than 24,000 DC fast chargers, and its partnerships include convenience stores and fuel retailers.
As of April 2021, Tesla and Sheetz have deployed Tesla Superchargers at 44 Sheetz locations. Mike Lorenz, former executive vice president of petroleum supply at Sheetz, noted the collaboration has worked well for both companies. Tesla can serve its driver population by locating Tesla Superchargers where drivers need them and in places with key amenities that Tesla drivers need, such as food, beverages, ATMs, restrooms and Wi-Fi. “Tesla is a first-class operation to deal with, very professional and thorough,” Lorenz told the Fuels Institute. Sheetz gains customers for its stores and has been able to build relationships with them. “Our top locations are doing over 60 charges per day with dwell times of around 20 minutes on average. Having Superchargers makes your facility a destination for Tesla drivers to seek out and plan a trip around,” Lorenz said.
Kum & Go, based in Des Moines, Iowa, operates 400 stores in 11 states and offers EV charging as an amenity at a number of its sites. The convenience retailer has experience with both the owner-operator model and the third-party model, partnering with Tesla and ChargePoint.
When determining whether to offer charging space, Kum & Go first outlined the company’s future and if EV charging fit into that vision. The retailer also looked at overall market trends. “We took a deep dive and learned all that we could about EVs and EV charging,” Brad Petersen, director of retail fuels at Kum & Go, told the Fuels Institute. “That’s when we decided as an organization that we would begin offering EV charging at our sites. We created a plan. That’s important—you have to have a plan.”
Kum & Go leaned on experts already in-house, such as its energy manager whose existing relationships with utilities resulted in a grant from a local provider to develop EV charging sites 100% funded by the utility. The company also has a sustainability manager and a dedicated point person who works on EV charging, and it meets regularly with its third-party charging partners. “We learn so much from them. Developing those relationships is critical,” Petersen said.
The Electric Vehicle Council is a nonadvocacy organization with the mission to coordinate the efforts of organizations actively engaged in supporting the deployment of EV charging infrastructure. The EV Council works to distribute existing research and education materials, as well as conducts original research to fill gaps in knowledge and further educate interested stakeholders about the opportunities, challenges and successful strategies associated with the installation and operation of EV charging stations. For more information on the Electric Vehicle Council, visit fuelsinstitute.org/ Councils/Electric-Vehicle-Council.
“Best Practice Guide for Installing and Operating Public Electric Vehicle Charging Infrastructure” can be downloaded for free at www.fuelsinstitute.org/Research.