Retailers Finally See a Payoff from EV Charging Investments

The increase in electric vehicle charging stations has boosted the retail sector, with studies showing a significant increase in consumer spending and visit frequency.

With the proliferation of electric vehicles (EVs), the commercial real estate (CRE) industry, particularly in retail and multifamily sectors, has been investing in electric vehicle charging facilities for years. Despite the high costs of installation and power supply, as well as increased insurance risks, retailers and multifamily operators have been seeking various methods to bear these costs, including public-private partnerships and sale-leaseback financing.

However, according to The New York Times citing the latest research, the retail sector seems to finally be reaping the rewards from these investments. Studies indicate that the installation of electric vehicle charging stations significantly increases the monthly visits and consumer spending of nearby retailers.

A revised study by Yash Babar from the University of Wisconsin Madison and Gordon Burtch from Boston University shows a 4% increase in monthly visits to retailers within 150 meters of a newly installed Tesla Supercharger, with consumer monthly spending increasing by about 5%. The effect is heightened when the charger is one of the first to appear in a county.

Another study published in Nature Communications examined the broader economic impact of 4,000 EV charging stations on 140,000 businesses in California. One charging station 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. 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 EV owners are likely wealthier than most drivers. However, this could be a secondary factor. There is also the income from charging. As The Times wrote, some retailers like Walmart are using private-branded chargers instead of third-party equipment and services. Some of the financing options available provide part of the charging revenue back to the owner of the parking space.

Graham Evans, a director at S&P Global Mobility, told The Times, "Companies are beginning to see charging as something that can potentially help the bottom line. It's going to become more ubiquitous rather than a token gesture."

Closing Remarks:

As electric vehicle charging stations become more common, retailers and multifamily operators can expect to gain more economic benefits from these investments, not only increasing their revenue but also contributing to the quality of life in communities.