In an interview with Yahoo! News, a fuel station owner shared a reason his business wasn’t in a rush to install electric vehicle chargers. It should be noted that not every gas station you go to is owned by a corporation. Many are franchised, and for those who don’t know the specifics of a franchise, the owner usually pays a lot of upfront costs for the right to own and operate the specific site underneath a broad (often national or international) brand and following their specific model of success. This may include signage, the right to use the company’s logo, recipe, and other things. It just depends on the business, the company, and the franchisor’s corporate setup.
Keeping the above in mind, I honestly don’t blame small businesses that own gas stations for that move. If you own one or two gas stations, you may only make enough to keep that business afloat and take care of your family. If you’re smart, you’ll invest any extra into savings, investments, or other ways to grow that money. So, from that perspective, I understand the hesitation of a business owner who may not know much about EVs to front the cost of adding an EV charger to their business property — possibly not getting the investment back for several years. This is why research is critical, though.
In the article, the fuel station owner, Mehdi Mahmoodi, owns 12 stations across the Bay Area and he explained why he hasn’t made the investment of installing an EV charging station, and doesn’t plan on doing so. “We haven’t looked into it because there’s not really much profit,” he said. I want to analyze that statement for a moment to point out something.
He hasn’t looked into installing an EV charger because there’s not much profit. How would he know that there’s not much profit if he hasn’t looked into it? Perhaps “looking into it” meant just only seeing how much it costs to set it up but disregarding any other research. Or perhaps he didn’t look further than the cost because he assumed few people would come to a gas station with their EV. There are many ways to look at this statement, but the thing that stands out to me is that people are still not fully researching the benefits of EVs — at least beyond their initial value.
They look into the financial value or the environmental value, but they are not really paying attention to how EVs and EV charging is changing the way people shop. Many businesses have Tesla Supercharging stations either in their parking lot or nearby because they know that while EV owners are charging their cars, they are also shopping. Gas stations aren’t set up well for that at the moment. People getting gas are going in and out in five minutes or so. Gas stations make a lot of their profits on what people buy in the store, but this is from people quickly going through the store, buying a few things, and moving on — not from hanging out and shopping casually like at a mall. So, the typical gas station owner could assume that an EV owner would not spend any more than a gas car driver despite having more time at the station.
This is what I mean by researching the full value here. In Mahmoodi’s case, he doesn’t foresee any major changes to his business model for at least another 15 years — so why change? Why adapt? He’s content and isn’t thinking about the long term. No offense to him, but I think that not planning for the long term is a mistake. Perhaps installing an EV charging station now isn’t profitable, but by the time he eventually decides to have one charger, other gas stations might be on this bandwagon and he might be skipped or left behind. Perhaps his business will slowly dwindle for years before he realizes he should adapt, and then it may be too late.
Some Fear That Installing EV Charging Stations Is A Business Risk
The article noted that retailers who install charging stations are taking a risk, since EVs only make up about 2% market share of the overall US auto market. In most states, retailers have only one electric supply they can buy from, which are regional utility companies. Utilities also sell the energy directly to consumers. In the case of liquid fuels, retailers have plenty of options. The article also noted that retailers who are adopting EV charging early risk owning outdated technology in just a few years. I really think that fear of outdated property is mostly FUD, but that’s my opinion.
EV Charging Is Better Looked At As Advertising Than A Business
Although EV owners would have to pay to use a charging station, just as ICE vehicle owners have to pay for gas, I think that a business would actually be better off if it installed an EV charging station without the goal of that station being directly profitable. Yes, they will make money from EV owners using the station, but will it be enough to offset the cost of installation? Probably not, at least for a while.
However, if you look at installing an EV charging station as a form of advertising, things begin to change. Simply having one at your business ensures that you are seen as EV-friendly in a world that’s changing in favor of clean energy and EVs. This alone will help your business stand out.
Depending on the type of business you have, having a charging station will ensure that EV owners using it have a chance to walk into your business. Look at this as social media advertising impressions. If you were to buy Instagram or TikTok advertising, your money would ensure that your business has visibility among your target market. They may visit your website and and then may buy something, and also tell others about the location.
Example: Social Media Advertising Costs Vs. EV Charging Installation Cost
I want to compare the costs of online advertising with EV charging installation costs. According to WordStream, the average small business using Google advertising spends between $9,000 and $10,000 a month for their campaigns. That adds up to $100,000 to $120,000 per year.
Online advertising is something I’ve been researching for my own small business and since I’ve bought a couple of things off of TikTok ads, I will probably go with that network for my own business. Plus, it’s actually my favorite social network for entertainment.
TikTok ad pricing starts at $10 per 1,000 views, and the platform wants your campaign to start with $500. This adds up to around 50,000 impressions or views of your business, and, again, this is the minimum. You could go with other options but in my opinion, I think a business would do well using TikTok instead of Facebook or Instagram.
Cost Installing an EV Charger.
According to Fixr.com, the national average cost of installing an EV charger ranges between $1,000 and $2,500, with more people paying around $1,200 for a 240-volt outlet, charger, and wall-mounted system. The cost is $4,500 for a Level 3 charger designed for 2 cars with a 240-volt outlet, pedestal mount, and circuit panel upgrades.
Let’s say you own a fuel station that also has a mini restaurant or coffee shop, with maybe a gift shop thrown in. Your business is located off of an Interstate exit and you probably do pretty well. There’s no need for you to advertise on TikTok or other social media apps, but let’s say that you may want to do this for the sake of this article.
You could go the free route and create a TikTok account and just do videos from your business — random day-to-day stuff that engages people online. This is actually fun to do but if you’re doing it for marketing, you have to plan it. And unless your target market is the entire world, it won’t really bring in revenue unless you have an online store set up for your gift shop or are selling digital items, or just want to get TikTok famous.
Your main goal is to get people inside your business. Would you rather spend $4,500 on 450,000 ad impressions on TikTok? This would get you famous for a short period of time, but even if your target market saw your ad, they may not get a chance to stop by your store for one reason or another.
Or would you rather ensure that customers who are already inside your store stay there and spend more money? The longer people remain at a business, the higher the chance they will spend more. I’ve seen this in action many times.
Investing the $4,500 as an advertising cost rather than a business investment would help you not feel the pain of a huge investment into something that may or may not be profitable. Plus, the value of having an EV charging station at your business will grow long after those TikTok impressions fade away.
EVs are here to stay, and any business that has an EV charging station of some sort will entice EV owners. This is a no-brainer. However, your perception is what creates your reality. Changing your perception from I will lose money if I do this because only so many people will charge their cars here to that of I can install one of these instead of spending $5K on advertising for one month and it will pay off over time will determine just how your business could thrive in a new market that is rapidly growing.