EV Charging for Businesses: Everything You Need to Know (2024)

Jane, the owner of a local shopping center boasting a prized downtown parking lot, recently made a strategic move by installing an electric vehicle (EV) charging station in the back section of her lot. This decision wasn't merely about supporting her Chamber of Commerce's sustainability objectives. Since the installation, Jane has witnessed a surge in revenue, heightened customer loyalty, and an unprecedented increase in foot traffic. 

While hypothetical, Jane’s story highlights the significant advantages businesses across all sectors can unlock by embracing EV technology. With EV and plug-in hybrid (PHEV) sales hitting a record high of 1.36 million in 2023, the demand for reliable charging infrastructure has never been greater. Let’s explore the benefits of installing a commercial EV charging station, what it might cost you, and the incentives your business can leverage.

EV charging stations are profitable for all types of businesses, from retail stores to office buildings to gas stations. Here’s why your business should consider installing an EV charging station:

Creates an additional revenue stream

EV charging stations generate passive income. While you go about your business as usual, your EV chargers can make you even more profitable by charging users per kilowatt-hour (kWh) or for time plugged in. 

Increases your foot traffic and customer loyalty

Providing convenient “plug and play” opportunities increases your business's value to customers regardless of your product or service. For example, if a customer is deciding between engaging with your business or a competitor’s, the bonus of EV charging can set you apart. Or, let’s say an EV driver came to your business solely to charge their car. There’s a good chance they’ll peruse your offerings while they wait. 

Corporate social responsibility

Installing an EV charging station at your business demonstrates a commitment to sustainability. EV chargers can reduce your business's environmental impact and contribute to company, local, and federal sustainability initiatives.

Installing an EV charging station at your business can cost anywhere from a few thousand dollars to over $100,000. Your total costs depend on the charging equipment, labor and materials for electrical and landscaping work, and where you intend to install the chargers. 

EV charger costs

EV chargers are classified as Level 1 (L1), Level 2 (L2), and Level 3 (L3). Albeit the cheapest option, Level 1 chargers are better suited for home charging as they only add a few miles of range per hour. 

Most commercial EV charging stations use L2 or L3 chargers. A Level 2 charger starts at around $400, whereas Level 3 charging equipment alone can cost tens of thousands of dollars. A single fully installed L3 charger costs around $50,00 to more than $100,000; the cost per charger typically declines as the overall capacity of your charging station increases.

Level 2 chargers are less expensive to install, generally better for EV battery health, and can fully charge most EVs in a few hours. Level 3 chargers are significantly more costly but provide value through time saved. Customers can usually get in and out in less than 30 minutes with a full charge, making them incredibly useful to those in a time crunch or who just don’t want to wait around.

Level 2 vs. Level 3 EV charging station

In addition to the type of EV charger you decide to install at your business, your total bill depends on the number of chargers you purchase and the manufacturer you buy from.

Infrastructure costs

Before installing EV chargers, you’ll need the proper infrastructure to deliver the correct voltage and power outputs, monitor and manage your systems, and meet local regulatory requirements. The bulk of your total bill will likely come from things like the following:

• Cost to deliver and meter power 

• Labor and material costs for electrical work (electrical conduit and wiring, electrical panels)

• Labor and material costs for construction and landscaping (pouring concrete, lighting, landscaping, etc.)

• Power management and monitoring systems (software for monitoring, data analysis, and protection, net metering)

• Permits and taxes

Location

Labor costs depend on where your business is located in the country and the work needed to prepare your site for installation. As mentioned, electrical, construction, and landscaping work will make up much of your total expenses. Construction costs in urban areas are generally higher than in rural or suburban areas.

EV charging stations installed between 2023 and 2032 might be eligible for the Alternative Fuel Infrastructure Tax Credit. Eligible businesses qualify for a tax credit equal to:

• 6% of the depreciable costs, up to $100,000 per item

• 30% of the depreciable costs, up to $100,000 per item. To qualify for this increased credit amount, you must pay your employees and contractors certain wages and ensure that qualified apprentices perform at least 15% of the labor required to construct your charging station. 

The Inflation Reduction Act (IRA) of 2022 modified the federal EV charger tax credit qualifications. Eligible businesses must now meet the following requirements:

• Equipment must be placed in service during the tax year

• Located within an eligible low-income or rural census tract. The Argonne National Laboratory’s 30C Tax Credit Eligibility Locator tool can help you understand if your business qualifies for the tax credit.

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