A new MIT Sloan School of Management study demonstrates the business opportunity of being located near EV charge stations.
A recent study by the MIT Sloan School of Management determined that EV charging stations in California boosted annual spending at nearby businesses by an average of about $1,500 each in 2019 and about $400 between January 2021 and June 2023.
The research published in Nature Communications shows that EV charging has a very positive effect on co-located businesses, much as we see with rail and bus stations, and other transit infrastructure.
It makes sense. If you’re attracting travelers to stop to refuel, that’s an opportunity to capture their business. And it’s not just because they may extra time while charging, it’s because of convenience. How many times have you decided to stop at a store because it’s a convenient stop along your other errands, like refueling the car?
The spending bump translates to almost $23,000 in cumulative spending increases in 2019 and about $3,400 per year from 2021 through June 2023.
The research was conducted by Yunhan Zheng , Department of Civil and Environmental Engineering at MIT and member of the Singapore-MIT Alliance for Research and Technology (SMART). His collaborators included David Keith, a senior lecturer at the MIT Sloan School of Management; Jinhua Zhao, an MIT professor of cities and transportation; and alumni Shenhao Wang, Department of Urban and Regional Planning, University of Florida.
For their study, the researchers collected data from over 4,000 charging stations in California and 140,000 businesses, relying on anonymized credit and debit card transactions to measure changes in consumer spending at businesses within 500 meters of new charging stations. The researchers used data from 2019 through June of 2023, skipping the year 2020 to minimize the impact of the pandemic.
While California is way ahead of other U.S. states in terms of charging infrastructure, the rest of the country is far behind. “The U.S. is investing a lot in EV chargers and really encouraging EV adoption, but many EV charging providers can’t make enough money at this stage, and getting to profitability is a major challenge,” Zheng says. On the other hand, he adds, “The findings could also diversify the income stream for charger providers and site hosts, and lead to more informed business models for EV charging stations.”
This is an important point for charge point operators to consider the infrastructure scales up. This is an opportunity to be a convenience magnet for EV drivers before charging becomes more ubiquitous in decades ahead.
