Electric vehicles: is workplace charging good for business?
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Director of Grid Edge Research
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The electrification of transport is gathering pace. There were nearly 5 million light-duty electric vehicles (EVs) on the road at the end of 2018 – 48% more than the year before. And we now expect the global EV stock to surpass 37 million by 2025.
In simple terms, that’s 37 million drivers looking for suitable places to charge their cars. And they won’t all have a convenient driveway. So, is there an opportunity for forward-thinking businesses to give their staff and customers a place to plug in?
Charging infrastructure is integral to the EV revolution
What is clear is that continued growth in EV sales depends on the deployment of sufficient charging infrastructure. And it is a growth industry. In our latest forecast we predict that the charging equipment market will reach US$8 billion globally by 2019 – and US$20 billion by 2025.
Getting the right mix of public, residential and workplace units is vital. As it stands, most EV early adopters in both the US and Europe have access to home charging. But as falling battery costs, public policy and consumer preference drive EVs into the mainstream, the demographics will become more diverse. Not everyone will have a handy driveway where their vehicle can charge overnight, particularly those living in apartments in urban centres. And residential charging alone may not be enough to overcome range anxiety for more rural drivers.
Workplace charging is on the rise
Our research on the North American and European workplace EV charging markets shows that these markets could surpass a combined 500,000 charger units in 2022, and reach over 1.25 million chargers by 2025. Europe has the potential to contribute 700,000 of those units, thanks to the higher proportion of people living in apartment blocks.
The cost to the driver will vary. Businesses have significant latitude to define if, and how, fees will be charged to customers and employees. Some businesses may choose to provide free charging while others set a paid tariff. Either way, the business case for developing the infrastructure depends on assessing both direct and indirect economic benefits to identify clear returns.
Engage the workforce with workplace charging
Corporate social responsibility (CSR) can have a real influence on talent acquisition. It can be hard to quantify, but perception matters. Today’s business must attract and retain a modern workforce, who may value perks like EV charging that not only make their lives easier but that also support aspirations to cut carbon footprints.
Many companies are making clear commitments to champion the cause, going beyond core business functions to monitor and lower both direct and indirect emissions. And those that cultivate a credible reputation for supporting the sustainability agenda may be considered more attractive places to work.
It’s also worth noting that while our current research defines ‘workplace charging’ as charging outlets provided for the personal use of staff and customers, the rise of EV fleets will also influence the development of on-site infrastructure. For example, in September 2019 Amazon announced it had ordered 100,000 electric delivery vehicles as part of its Climate Pledge – the single largest EV order to date. The vehicles are planned to enter service by 2024, with the initial units shipped in 2021.
EV charging points could attract customers
Convenient charging outlets could also attract customers. Providing EV charging is unlikely to generate significant direct revenue for a retail business in and of itself, but drivers may use the time to browse the store. And that is valuable.
For the time being, most EV owners are likely to be middle to upper-middle income, and there’s an obvious opportunity in encouraging them to spend time – and money – on the premises. And as the EV stock grows, notably in China, Europe and North America, businesses will look to tap into a growing ‘captive audience’ seeking spots to charge away from home.
And of course, customers – like employees – may well respond positively to businesses that take clear steps to help tackle climate change and facilitate the energy transition.
Workplace charging as a grid flexibility resource
Longer term, there is a grid component to the evolution of workplace charging. Daytime charging is coincident with solar power output. EVs could be used to absorb solar energy during peak generation periods, and even respond to renewable intermittency. It's an opportunity for businesses to take advantage of staff and customer-owned mobile storage as a flexibility resource to capture utility incentives, and potentially lower their own energy bills.
If widely implemented, vehicle to grid could be an industry game-changer. And while we estimate that significant penetration is still several years away, there is strong interest in California in particular, due to the volume of EVs in the market. For example, BMW started testing EV charging as a grid resource back in 2015, working with Pacific Gas & Electric.
Subsidy policies in areas like California also help make the business case for developing workplace charging much easier. In some cases, utilities are actually building some of the infrastructure themselves to address the need for this resource.
Part of the journey to greener commutes
Electric cars aren’t the only option for those seeking a greener commute. China is driving electric bus demand, and growth is also set to accelerate in the US and Europe. However, workplace charging is an opportunity for businesses and individuals, and an important enabler for the broader EV revolution.