Understanding the EV Market
As EV adoption accelerates all around the world, an increasing number of businesses are considering their first steps within the fast-developing electric mobility industry. While becoming an EV charging station company is definitely an attractive concept, the many diverse factors of charging infrastructure (from EV charging habits to government incentives, charger types, installation costs, and more) make entering this growing market a rewarding, but complex endeavour. Which means that choosing the perfect EV charging station business model is a crucial element of your company’s success.
This is why, in this blog post, we’ve put together a useful overview of the most popular EV charging station business models in the EV ecosystem today. From understanding the differences between Level 1, 2, and 3 charging speeds to exploring revenue strategies like pay-per-use, subscription services, or partnerships, we want to provide you with actionable insights to help your company achieve your unique goals.
So if you decide to focus on workplace charging, public charge points, or the latest innovations like vehicle-to-grid technology, the right EV business model will become a true foundation for your successful and sustainable future in electric mobility.
Key Considerations for EV Charging Station Business
For companies looking to ride the rising wave of electric vehicles, there’s never been a better time to invest. Not only are EV sales figures consistently going up (according to this report, one in five cars sold throughout 2023 was an electric model), but the funding of EV infrastructure is also getting more support from government incentives around the world. Because of this, several businesses are now actively exploring EV charging business models and trying to decide which would work the best specifically for them.
If your company is also looking to step into the fast-moving world of EV, you’ve probably realized that – from a business model perspective – this world is quite complex. Of course, this doesn’t mean that maintaining a healthy, sustainable ROI is unachievable. However, choosing the most fitting EV charging station business model for your company is definitely the most essential step towards getting there.
Since EV charging stations have many attributes, it follows that EV business models can also be grouped according to several factors (like charging speed, user types, upfront costs, or location). To simplify things, we’ve put together a short overview of the most often-used ways to classify EV charging business models.
This will, hopefully, help you select the one that aligns most with your current business strategies and future plans, all while making your debut in the charging infrastructure arena less cumbersome.
Need for Speed? How charging speed affects EV charging business models
For drivers, finding the correct time to charge their electric vehicles is critical to their experience. Naturally, a remote office worker will have very different EV utilisation rates (and therefore charging preferences) than a long-haul commercial driver – which is why, when selecting the perfect EV charging station business model, companies need to decide carefully if they want to provide Level 1, Level 2, or Level 3 charging speeds at their charging stations.
Level 1 charging speed: for EV drivers with time on their hands
As a business looking to enter the EV charging ecosystem, investing in Level 1 EV chargers might seem the safest bet at first. Since this charging speed doesn’t actually require any specific equipment – only a nozzle cord (which drivers get together with their EV) plugged into a standard 120V outlet – the required investment is affordable, and in residential areas, recurring access to overnight charging usually leads to a stable revenue stream.
The downside of Level 1 charging is, of course, that it’s the slowest and most limited choice out there. For a full battery, overnight charging is a minimum for EVs (but it can also take up to 24 hours). And since charging speeds and pricing are directly related, even with high utilisation rates, your revenue, while stable, will also be lower than with other charging speeds. So while the costs and related risks of installing Level 1 chargers are definitely low, the rewards will also plateau after a while.
Level 2 charging speed: when EV charging is the perfect perk
Stepping outside the world of residential charging, the next charging speed that already halves the time drivers would need at a Level 1 charger is Level 2: where both hardware and software are more powerful and fine-tuned to a more rapid charging experience. While still not the quickest EV charger available, Level 2 chargers can power up an EV’s battery in 4-6 hours, making it a valuable perk for employers, campuses or even retail spaces to offer their employees and visitors.
The reason Level 2 EV chargers are so speedy is twofold: on the one hand, they work with a much higher energy output (a 240V outlet, to be specific), which obviously means that their hardware is more sophisticated than Level 1 charging hardware.
On the other hand, the software used in Level 2 chargers is also (typically) more intuitive and feature-heavy, which means a larger investment up-front – as well as higher revenue stream potential too, of course.
Level 3 charging speed: for supercharging EVs in record time
Powered by direct current DC fast chargers, instead of alternating current (AC) EV chargers like in Levels 1-2, Level 3 chargers are definitely the most impressive of them all, fully charging all kinds of EVs in less than an hour. Because of this, it makes most sense to install them by highways or urban centres, where commercial and/or heavy-duty EVs can take advantage of the short charging times – even together with Level 2 chargers, if you’re using compatible software for both.
Here comes the challenge: the initial expense for installing DC chargers is the largest by far (currently in the ballpark of 10,000 USD, although it’s expected to go down soon), meaning that creating such a superior, rapid charging experience does have a substantial price tag. (Like with Level 2 chargers, the higher costs are because of the more specialized software and hardware necessary for DC charging.) However, depending on the location you choose, you’re almost sure to win back your finances quickly.
EV charging business models according to charging locations
Driving gives us the freedom to go wherever we want. As electric vehicles gain popularity, it makes sense to think about the different types of locations our new EV charging points can serve potential charge customers from, since they’ll heavily impact expected utilization rates and additional revenue streams.
Home charging: part of our daily routine
As a business looking to move into this dynamic industry, we cannot disregard that 80% of all charging happens at home. This is why home charging has always been one of our priorities here at Monta: by now, we’ve seen countless examples of how a seamless home charging experience – without any complicated settings or hardware – is beneficial to both drivers and the companies behind the charging network.
As technology evolves, and new possibilities like smart home charging and energy management become available for domestic chargers, this also provides new options to monetize home charging habits – not to mention the increasing number of government-backed incentives for home charging installation, making it a truly attractive EV charging station business model for interested parties.
Public charging stations: open access for all
At first glance, public charging may not seem like a financially stable option for many businesses. However, even though utilization rates are less easy to predict in publicly accessible areas such as supermarkets or hotels, with the right pricing strategies and locations in place, public charging stations can become a rewarding business option for companies looking to monetize their charge points.
After all, drivers without home charging options will often become returning customers – and with the increasing number of government grants aiming to foster EV adoption, your business may find that the installation and/or operational costs (like maintenance) of running a public charging station is significantly reduced, too.
Workplace charging stations: a truly helpful benefit
Like home charging, workplace charging also has the advantage of fairly stable utilization: after all, EV drivers come to work each day just like their non-EV-driving coworkers. Offering a workplace charging program as an employee benefit capitalizes on this knowledge and reduces coworkers’ range anxiety – and as an added bonus, workplaces can also (usually) use a local grant to help with operational and installation costs, making it a win-win situation for both them and your own business. There are also multiple opportunities for future collaborations with your workplace partner: like corporate incentives to further promote coworkers’ workplace charging habits.
Destination charging stations: a match made in (retail) heaven
As EV driving evolves, it makes sense that new ways of approaching the charging experience also become more popular. Destination charging is the perfect example of this: similar to public charging stations, it gives more drivers a chance to charge their EVs away from home, while doing something fun like visiting shopping centers or sightseeing near the site of the charging station. (Destination charging typically takes longer than public charging, which offers drivers a reason to explore the surrounding establishments and also keeps prices low).
As an EV station business model, the budget-friendly prices drawing customers in and the multiple options for collaborations with nearby companies makes this an intriguing alternative for EV-minded businesses. 3
All about the money? The different revenue strategies of EV charging business models
We believe EV is the way towards real environmental sustainability. But for companies driving this revolution, creating a stable source of revenue is fundamental to our mission: the more successful our business is, the more resources we can allocate towards developing the technology of tomorrow.
Here at Monta, that technology includes a reliable, frictionless way to deal with the financial aspects of an EV charging business – which, paired with the right revenue streams' tactics, streamlines the road to profitability for most companies starting out in the EV industry. This is why revenue strategies are also important elements of our EV business model overview.
Pay-per-use: inspired by regular gas stations
The most straightforward of all other strategies, the pay-per-use (or pay-per-charge) model takes the well-known tradition of charging at gas stations and uses it with an EV twist – since we also get to decide what we use as a measurement unit, per-session fees or per-kWh rates.
For EV users, it’s the most flexible and accessible way to pay for charging their EVs, although expenses can add up fast; and for service providers, pay-per-use charging stations in high-traffic areas can quickly become a fruitful asset.
Subscriptions: more stability for all parties
In the golden age of memberships, offering EV charging subscriptions services to regular drivers feels like the natural next step. Again, we get to decide the exact format of the subscription – whether we want to offer lower rates or unlimited access to subscribed drivers – and because it’s a recurring revenue model, utilization rates and the general health of our business become much easier to predict.
One crucial thing to consider with charging subscriptions is geography: will it contain our EV drivers to a single network, or is there a way to become more flexible (such as our own Monta Roaming charging network, which helps you tap into Europe’s fastest-growing EV community).
Free charging: utopia or reality?
Although it may seem strange at first, providing zero-cost charging is becoming a viable option for businesses around the world. In the US, for example, there are several free-charge points available for public use in California and along the West Coast.
With an increasing number of governments committed to promoting EV adoption through grants and funding support, companies can now actually consider installing EV chargers at municipalities or supermarkets with their costs being covered – an attractive option for both them and EV drivers in the area, as well as encouraging general use and increasing foot traffic around the charger sites.
Partnerships, bundles and other revenue strategies
For forward-thinking companies, adopting an up-and-coming revenue strategy for their EV charging station business model might be even more profitable. From partnerships with hotels, restaurants or retail chains (like with destination charging) to bundled EV charging packages that include access to parking lots or car maintenance, the number of options is growing each day. And once we connect these revenue-generating innovations to EV users’ needs and define the key trends that connect them, our road to profitability will become significantly shorter indeed.
How to choose an EV charging business model based on ownership
Choosing how much to invest in the infrastructure is directly related to our company’s long-term plans within the industry – and indirectly affects our choice of ownership models as well, which will in turn impact our EV charging station business model significantly.
Becoming a service provider: less risk, less responsibility
For businesses more interested in providing charging services than actually installing and developing an entire charging station themselves, becoming an EV charging provider will be a highly attractive way of entering the EV business. Service providers can choose not to own their own infrastructure, paying a fee for the operation of someone else’s charge points instead – much less administration, and more time to focus on ways to improve the charging experience.
Collaborative investments: strength in numbers
When companies want to invest in EV charging infrastructure but don’t have the buying power to do it alone, partnering with other like-minded companies might be the golden way forward. This way, not only do the investment costs split up between multiple stakeholders, but the responsibilities also become shared (as do the profits, of course). This collaboration often lays the groundwork for future synergy as well, so it’s definitely an option worth considering.
Full ownership: complete independence from others
If your primary business goal is to have total control over all finances and operations related to your EV charging station – and you’re in the position to cover costs through your existing company or public/private funding and incentives – then full ownership is the best way forward. Of course, this doesn’t mean you’ll have to do it all on your own: choosing the tools and services that best support your new goals will definitely smooth your way to success.
However, all responsibilities and risks will lie on your company; and although it may seem daunting at first, you’ll be uniquely placed to become a profitable, innovative player in the fast-developing EV industry through your own decisions.
What’s on the horizon? Up-and-coming EV charging business models
Just like a motor is more than the sum of its parts, these EV charging station business models can also be merged and adapted to fit our company’s needs even more closely. Combining the different elements of speed, location, revenue strategy, and ownership can lead to some truly remarkable blueprints for EV charging success, such as:
- Hybrid charging systems that switch between offering free charging and pay-per-use according to general usage or user loyalty
- Community-based or shared private chargers that promote electric vehicles' adoption among people without their own driveways (and increase utilization rates)
- Flexible price structures that automatically adjust charging costs based on energy demand or the popularity of a location
And as new features continuously enter the EV charging industry – thanks to the ultra-fast developments in charging technology – even more options are opening up for businesses looking to establish themselves in the electric mobility race. Advancements in vehicle-to-grid (V2G) technology and integration with renewable energy sources like solar electricity are just two examples of what the EV charging stations of today will have to adapt to in the near future.
In fact, a widespread shift towards more universal, cross-network subscription models (and the increasing role of government incentives in shaping charging infrastructure) will influence EV charging station business models as well.
The best EV charging business model is one that fits your unique needs.
This ever-growing number of potential paths towards your EV charging goals may seem daunting initially. But ultimately, the one thing that gives you the most power in choosing the right business model is knowledge; in other words, they’re only as powerful as they are personal to your own company, no one else’s.
This is why awareness of charging station types and the different ways you can build a thriving, financially stable business around them is essential – the right one won’t just become a blueprint for the near future, but prepare you for the many upcoming innovations in this fantastic world of EV charging.
Whether you choose to anchor your EV charging station business model based on its location, ownership model, revenue strategy, charging speed, or something else entirely: here at Monta, we’ll do everything we can to help you on your electric mobility journey.
Get in touch with us today to find out how our technology and experience can best help you onwards!
