'Demand Is Coming' For EV Charger Adoption. Multifamily, Office Properties Need To Get Ready
Lagging far behind places like Europe and China in electric vehicle adoption, owners of U.S. multifamily and office real estate need to make up for lost time as sales projections grow steadily.
“This is a huge need,” EnviroSpark Chief Strategy Officer Andrew Bailey said during a June 6 panel at the National Association of Real Estate Editors conference in Las Vegas. “The demand is coming.”
There are already more than 1 million EVs on the road, and another 17 million are expected to be added by 2030, according to the Edison Electric Institute. About 80% of charging is done at home, but the surge in ownership means more ports at more locations are quickly becoming necessary.
An extremely small percentage of office and multifamily properties offer EV chargers on-site, panelists said. Adoption is mostly stymied by cost, infrastructure challenges and fear of the unknown.
“We spend a lot of our time educating [property owners] on what they need,” said David Aaronson, CEO of Refuel Electric Vehicle Solutions. “You’re running a piece of equipment that is going to be at a property for a long time. They want to really understand the decisions they’re making.”
The biggest obstacle for owners is sufficient power, Aaronson said. Every multifamily property in the U.S. will one day need EV charging stations, he said, but the vast majority only have the power to support between two and four chargers.
“The apartments that exist today, none of them were planned with the assumption that you would need electricity to charge 200, 300, 400 automobiles,” he said. “We try to put in infrastructure for as many as we have the electrical capacity to do.”
Some well-heeled owners have the capital to buy chargers, which can run anywhere between $8K and $9K per port and can accommodate between seven and 10 drivers. But installation presents its own set of hurdles, said Jim Hurless, EV real estate leader for CBRE. A lack of skilled labor and a shortage of required hardware can delay the process by several months.
“The actual chargers themselves are the easy thing to get ahold of,” Hurless said. “Between the labor and the switch gears, those are some of the bigger obstacles right now for installation.”
Apartment owners that are able to adopt EV chargers have an opportunity to develop a new revenue stream for their properties — as long as the technology is deployed correctly. Some uneducated landlords are still offering chargers for free, which Aaronson said costs between $300 and $500 per driver per year in electricity.
“Nobody moves because of it,” Aaronson said about switching to a paid model. “They’ve never gotten free gasoline when they go to an apartment complex. … People expect to pay for fuel in their car.”
Companies like EnviroSpark — which has completed more than 5,000 EV charger installations for multifamily, office and government clients over the past decade — install, own and operate their stations. But in some cases, Hurless said, landlords can still collect a portion of the proceeds from port usage.
“In certain circumstances, the landlord or the investor can actually monetize those stalls and collect the rent, if you will, or participate in revenue — whatever is agreed between the operator and the owner of the property,” Hurless said. “It allows them to provide that amenity without any of the hassle of chargers being down.”
How pricing is handled at office properties is a source of much debate between lawyers, human resource professionals and government regulators, Hurless said. Questions around whether the amenity should be taxed prompts most owners to simply offer the service at cost, he said.
The Inflation Reduction Act, signed by President Joe Biden last summer, aims to ramp up EV production and sales by offering extensive tax credits. Businesses that install charging equipment will be eligible for credits too.
The act is expected to drastically alter the EV landscape in the U.S. and help catapult ownership. But the chances of drivers charging exclusively at home are slim, and commercial properties will have to pick up the slack so cars can charge on the go.
“I don’t think the answer is to provide charging at every individual home for every single car that’s at your home or in an apartment building, but to leverage the public network on top of what you have access to,” Hurless said.
Naysayers doubt energy grids will be able to support the massive influx of charging infrastructure expected to be added in the coming years, which is where alternate energy solutions like solar could come into play, Hurless said.
But full adoption is still likely 50 to 60 years out, Aaronson said, giving the U.S. plenty of time to figure out how to pivot from fossil fuel-dependent cars.
“We will get it solved,” he said. “We will have enough electricity when the time is needed.”