As Americans have increasingly become more concerned with climate change and looked to shift away from fossil fuels, stricter legislation around emissions is driving the transition from gas-powered vehicles to electric. Most major car manufacturers now offer hybrid or fully electric vehicles, and more EV manufacturers have entered the market over the last two decades. Sales of these vehicles are currently at an all-time high, with EVs accounting for nearly 8 percent of all auto sales in the U.S. in the third quarter of this year. As these vehicles become more common around the country for the millions of Americans who depend on them to get around, how they will be charged is something that property owners have to consider. For new and existing buildings alike, owners and developers are feeling the pressure to make decisions on EV charging accommodations as the transition starts to become a reality.
The revolution is coming
In the US, nearly 6 percent of all new cars sold last year were electric. It may not seem like a lot, but it’s a figure that grew by 65 percent from the previous year. It also occurred during a time when new vehicle sales overall fell by 8 percent. In California, in particular, 1 out of 4 new cars sold last year were EVs or zero-emission vehicles, a figure no doubt driven by the state’s recent legislation aiming to phase out gas-fueled cars in the coming decades. California lawmakers passed a bill in 2022 that will ban the sale of gasoline-powered cars starting in 2035. So far, California is the only state with legislation on the books banning gas-powered vehicles, but at least 8 other states have announced plans to eventually ban the sale of cars with internal combustion engines as well. “What we’ve seen in other countries, and our own region, is once you hit the 8 to 10 percent mark, the adoption rate really increases after that,” said Nicole Bartlett, Director of EV Charging at Partner Engineering and Science, Inc., a commercial real estate consulting firm. In California, the percentage of new car sales that were EVs grew from 2 percent to 22 percent over the last five years. “What we expect is a similar rate across the country. We’ll see higher rates in coastal cities like New York City and Seattle, Texas, places that are closer to the California curve,” Bartlett said.
The movement to transition to electric vehicles recently gained momentum on the federal level as well. In late 2021, President Biden set a goal to phase out gas-powered cars and require all new vehicle sales in the U.S. to be electric by 2030. The Biden administration has set aside $5 billion in order to reach the goal, money that will go toward building charging station infrastructure nationwide and to further boost tax credits that aim to increase the production of EVs in the U.S. Currently, tax credits can reduce an individual filer’s federal income tax bill by up to $7,500. Qualifying EVs include plug-in hybrids, hydrogen fuel-cell vehicles, and all other EVs, as long as they are built in North America.
By 2030, there are expected to be 33 million EVs on the road, and there will need to be 28 million charging ports to refuel them, according to the U.S. Department of Energy’s Renewable Energy Laboratory. What a property needs can differ widely depending on the building’s use, the geographic location, and the electrical capacity it already has. “Building new is best because you can put it in from the start and work with the utility company from the start,” Partner’s Bartlett said. Her firm works with clients looking to install charging infrastructure in their properties. Bartlett and her team first assess what the parking situation is at the property, whether it needs to be rezoned to take away parking for EV stations if there are any issues that limit accessibility, and the most important component of all: capacity for electrical. Whether a property has the capacity for electricity EV charging stations or a significant amount that needs to be added requires time and coordination. But once that is figured out, choosing the right EV charging station operator is the next step.
There are different levels of EV charging, ranging from Level 1, which is often used at home by individual owners, to Level 3, the fastest level of charging. Installation costs can vary greatly, depending on a few factors, especially any added electrical infrastructure of capacity needed. For the highest level of charging, Level 3, hardware can start at $25,000 and go up to $150,000. Despite the widespread push to support a transition to EVs, actual adoption rates of EVs are growing more divided, according to one recent study. Rates of adoption for all-electric cars are growing steadily in the top 10 states, while rates are declining in the bottom 10 states. But in places where adoption is the highest, like California, the development of charging infrastructure has not kept up the same pace, putting even more pressure on building owners and developers to install charging stations in their properties.
Navigating the new landscape
One of the most significant hurdles to getting more chargers up and running in commercial buildings is education. “There’s a lot of uncertainty, a lot of education needs to happen with owners,” Bartlett said. “It’s not like putting in a pool or plumbing, and things are changing all the time.” At a recent industry conference, Bartlett attended that featured, among other speakers, the head of the Joint Office of Energy and Transportation and the head of Ford Motor Company’s EV division, a fellow attendee remarked on the enormity of the transition from gas-powered to electric vehicles, comparing it to the advent of indoor plumbing. “I think there are a lot of people that are questioning whether this will really happen, but there are also a lot of smart people who believe this will happen,” Bartlett said.
The automotive industry is supporting this transition away from gas-powered cars. Aside from the largest EV manufacturer, Tesla, some American automakers are spending billions of dollars to bring new electric models to market. But, multiple surveys have shown that potential owners are worried about how they will charge their cars, and it’s holding them back from purchasing one. In a poll taken earlier this year, 47 percent of adults in the U.S. surveyed said it was unlikely they would buy an EV, with close to 80 percent saying a lack of charging stations was one of the reasons.
While owners and developers are becoming more aware of the need for EV infrastructure in their properties, there is still a lot of room for improvement. Bartlett described seeing a potential client with a huge multifamily property with around 1,000 units. The property had multiple parking decks that were recently built, but overall, there were just 4 chargers on the property. “That’s super poor planning,” Bartlett said. On the flip side, at the under-construction Ritz Carlton Residences in Palm Beach, Florida, developers are putting in the capacity for two chargers for every one of its 106 condos.
For those looking at adding charging stations to their property, a few things need to be factored in when deciding just how many chargers to include. Geographic location means a lot, and any data or info on adoption rates in the area will be crucial to help gauge the demand. In an existing property, owners can survey residents or building users on how many people already own an EV and how many people are thinking about owning one in the future. In a multifamily property, Level 1 chargers, which are the most cost-effective, make the most sense to install. Though they charge slower, they have more time to charge since residents will plug them in overnight. The same can be said for office properties, as owners can charge their vehicles during the work day. Shopping centers, on the other hand, will require faster charging, so Level 2 or Level 3 charging stations make the most sense. Guidance on how many chargers to install can vary, especially given the different property sizes and rate of adoption in the area. Still, some believe setting aside 10 percent of parking spaces for EV charging is a good start. Planning ahead will be key during the transition, and owners can put in the infrastructure to support chargers in the future while not actually installing them yet.
Since hitting a sales milestone last year, electric vehicle adoption is expected to accelerate rapidly in the coming years. Major American automakers are spending billions to ramp up EV production, and the federal government is investing billions to build a network of public EV charging stations across the country. But, concerns over charging are still holding many Americans back from purchasing EVs. There is still a big need for more charging accommodations to make it easier for EV owners to fuel up, and building owners are figuring out the best EV strategy for their property. As building owners become more educated about EV charging accommodations, adding this kind of infrastructure will become a typical part of the development process and just another box to check on a list.