Electric Charging Stations Are Next Commercial Property Frontier

By John Kalb

Consumers are buying electric vehicles in greater numbers and beginning to create demand for charging stations in workplaces, public places, shopping centers and apartments. The famously progressive San Francisco Bay Area is leading the charge.

Nissan Motor Co. reported that first-quarter sales of its Nissan Leaf EV nearly quadrupled from the first quarter of 2011 to 1,733 units; Nissan’s best-selling American dealerships based on Leaf sales are in Petaluma and Burlingame. Campbell-based Coulomb Technologies Inc. operates the ChargePoint Network, which has approximately 6,500 installed, independently owned charging stations. San Francisco-based ECOtality Inc. operates the Blink Network of approximately 6,700 charging stations and is the project manager of the EV Project network, a $230 million experimental public-private venture to analyze how people use electric vehicles and charging stations.

The federal government is promoting adoption of electric and hybrid cars and is targeting a million electric vehicles on the road by 2015. According to Pike Research, which tracks the global clean-technology market, every major car manufacturer has an electric or hybrid car on the market now or is developing one or more models to be released to consumers in the next 24 months. Nearly 36 plug-in electric models are to be introduced this year. The current EV cars available for purchase are Chevrolet Volt, Fisker Karma, Ford Focus Electric, Ford Transit Connect EV van, Mitsubishi i MiEV, Nissan LEAF, Toyota Plug-in Prius and a limited supply from Palo Alto-based Tesla Motors Inc. Although 2011 electric vehicle shipments in North America were less than 20,000, Pike anticipates an increase of as much as 58 percent from 2011 to 2017.

All of this is great, except for a simple fact: All of these cars can only go so far on a full charge—and a charge that was presumably obtained in the car owner’s home garage. With the exception of the Tesla Roadster, which has an average battery range of 225 miles, the available EV models travel fewer than 120 miles on a single charge. The Leaf will travel 70 miles. The Chevy Volt is expected to reach about 40 miles per charge but can supplement that range up to 350 miles by using gasoline to drive the electric motor. The Mitsubishi i can cover 62 miles on a full charge, and even the BMW ActiveE only gets about 100 miles per charge. That means a driver can’t make it to Silicon Valley and back from Marin County without charging sometime during the day in a public or private parking lot.

Consequently, chargers are beginning to dot the landscape. In the world of commercial real estate, these developments signify an emerging market. If you are a workplace or retail space provider, you probably will have to decide whether to jump into the fray. If you do, you will have to determine whether to charge for the service and whether to make it available all of the time or part time. If you are a landlord—or employer—having charging stations represents a point of market differentiation today. If you are a movie theater owner and you install charging stations, people can charge while they watch, or shop, in the case of a retail center. A worker who drives an electric car might be swayed to select or stay with one company over another based on the availability of a charging station.

But, if a charger is owned by a commercial property owner—whether a corporate landlord or shopping center maven— that owner is going to have to figure out how to recoup the investment and ongoing expense, typically meaning a business relationship with the charger-equipment manufacturer. In a commercial setting, the cost to install a station can be as little as $2,500 or as much as $15,000 and involves a professional electrician.

That investors perceive market opportunity hardly seems in doubt. In a recent settlement with the California Public Utilities Commission for overcharging state ratepayers during the 2000-2001 energy crisis, New Jersey-based NRG Energy Inc. agreed to install 1,200 electric-vehicle charging stations in the Golden State. The value to California is an estimated $102.5 million. But San Francisco’s ECOtality has challenged the terms of the agreement in the state’s First District Court of Appeal, seeking to halt its implementation, claiming it confers a competitive advantage on NRG rather than punishes.

Pike Research projects that nearly 200,000 charging stations will be installed at commercial properties and in public spaces by 2015. Another market research and consulting company, U.K.-based IMS Research, thinks the market is growing much faster. A recent report from IMS Public anticipates that by 2013, shipments of public charging stations will reach nearly 500,000 units per year.

Commercial property owners and managers interested in adding charging stations to their properties have a myriad of decisions to make: Is it a business or a service? Is there sufficient power at the site to power the chargers? How much energy do they draw, and how much will they cost? Do you charge employees and tenants or provide car charging as an amenity? If you remove a valuable parking space (or two!), how do you know it will be used by an EV owner often enough to make the investment worthwhile? Is there software that monitors the time a car is parked at a charging station? Regarding the equipment, do you want to own it? Lease it? Participate in a network?

What does seem self evident is that before the EV industry can go from early adopter niches to being embraced by the mainstream auto buyer, the issues around deployment of chargers in multifamily complexes, workspaces and public environments will need to be addressed.

John Kalb is the founder of EV Charging Pros, a Novato-based business research and consulting company that advises corporations, commercial property owners and managers on the state of the electric-vehicle market and electric vehicle service equipment in commercial applications.

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