(5 minute read)
Two funding models created by electric car charging station manufacturers
With EV markets booming, it has become evident, that there is growing demand for EV infrastructure expansion as well. That meaning electric vehicle chargers, because you know, the car batteries aren’t going to fill themselves… 😉.
To help EV charging entrepreneurs launch new businesses, and expand their existing charging networks, governments are giving out subsidies. That is so the charger installing will be cheaper for you. But they are not alone with this quest, as we, the electric car charging station manufacturers are making it easier for you to launch your charging service as well...
So, we have created two ways for you to fund and launch your EV charging business.
Then what are they? For now, let’s call them “Own your EV charger” and “Lease your EV charger” models.
1. Own your EV charger model – Invest, order, install...
Now, how does the name sound? Most likely this is the model that first popped to your mind, when you started to consider launching an EV charging business. Here, as the name states, you own your EV charger 100 %. So, things are simple: you buy your charger, you own your charger, you install your charger, you manage your charger, and you maintain your charger. Plain and simple.
So, selecting your charger is of the essence here.
If you would like to better understand how to select the best EV charger for your business, you can read our blog post on it here.
This can be very attractive way to launch and offer your EV charging service, as here you pay for the charger the moment you buy them and get them installed. After that, your only fees come from charger maintenance, management, and buying of energy.
What do you need to know when selecting this
Thus, the “own your charger” model requires some capital to kick-start it. It doesn’t mean the investment has to be a large one. You see, here you create the whole charging infrastructure and maintenance procedures to fit your goals, budget and business size. So, it’s a very customizable funding model.
For that reason, the “Own your EV charger” model, can suit well both businesses large and small. When going with it, you should put special emphasis on the EV charger you select, because that’s the charger you will have for years to come.
If you are looking for a charger, I can recommend the Ensto Wallbox. That is most likely going to suit your situation and goals, because the charger is compact, supports charging two EVs simultaneously, and is future proof with v2g capability. You can read more on it here.
This funding model was born rapidly when electric car charging station manufacturers, such as us Ensto, started getting orders in. But as mentioned, we have also created a model, that you can take as your own with less kick-start capital. And that's called "Lease your EV charger".
2. Lease your EV charger – Pay with profits
But you have another option as well! As you might imagine based on the name of this model, you don’t necessarily have to own 100 % of your EV charger to make profits with it. And that’s made possible with our “Lease your EV charger” model. In truth, you own your charger here as well, but it's still more like a leasing solution here.
By leasing, you don’t need to have piles of money the moment you want to start your charging business. Rather, you can pay for the charger, its installing and upkeep as you go and make profits. Then what is the secret sauce here?
You do this via a contract with the electric car charging station Manufacturer or Operator. Here you determine the charger you want, who takes care of the maintenance, how charger management is done, length of the chargers guarantees, and how to upgrade your chargers to the next generation when the time comes… etc.
Thus, there are some important things you need to know.
What do you need to know when selecting this
Of course, the contract covers tons more stuff as well, but the idea I am getting across to you is, that the contract outlines your upcoming business model. It makes it easy and effortless to start a new EV charging business. And actually, for that reason, this model has increased in popularity in the EV charging markets in recent years. It seems that business owner’s are finding the power of good contract, which enables them to easily outsource labour heavy management and maintenance to the electric car charging station manufacturers.
If this funding model is to your liking, you could read our blog post on 5 great EV charging business models. There you will find five smooth ways to organize your day to day business operations. You can read it here.
The “Lease your EV charger” funding, is a great way for small and medium sized businesses, to start EV charging. It solves many operational and maintenance related issues through the contract, puts you in direct relationship with the manufacturer, and lets you spread the costs into wider time span. For the same reasons it can be the go-to solution for larger businesses, who are looking to organize their EV charging more efficiently.
So, now you know how to fund your new business operations. But what's next?
Have you selected your funding model? - This is what’s next:
Even that both of these funding models are different in certain ways, they also have something in common. They both satisfy EV charging customers by filling the car batteries affordably when done right. Interestingly, in a study done by Aalto University of Finland, it was found that 80 % of EV charging costs come from running the charging station. Quite a lot, now don’t you think?
So you can increase your profit margins a lot, by creating efficient EV charging methods.
And luckily, we have them! We have put much effort into making EV charging profitable for you and affordable to the end-user. The method of cutting your EV charging costs is outlined in our free cut your operating expenses guide (works for both funding models), which you can download here.
If you want to learn, how to cut your EV charging expenses, download your free guide here.
And of course, if you found this blog post helpful or interesting, make sure to subscribe to our blog notifications with the form below.
Why legislatives like smart EV charging solutions
Us EV pioneers, we live in the world which has two parts. First is the one most visible to us. The charging network that loads our cars. But the second allows the first and our modern society to exist in the first place. And that is our energy grid, which has to be healthy, so EV revolution may progress and greenhouse gas emissions can be cut. That is why our legislatives give it special attention and want to nurture it with SMART EV charging solutions.
The energy grid is vital part of modern society and that is why governments aim to protect it.
So: “in Grid we trust”.
The SMART grid protection squad: legislatives, you and us
Even so, that grid enables the whole EV revolution to evolve, we have our limitations with it. Yes, it is not omnipotent, but rather humanlike. Our grid has the potential to be damaged when too much (electricity) is demanded from it at once. I guess you understand what I mean, people too can get overloaded… and situations like this could possibly lead to blackouts. And it’s the same with our grid too.
That is what SMART EV charging solutions aims to end by creating a communication line between the grid and charger. It enables them to talk with each other, so the thousands of grid-connected EV chargers won’t suck it empty leaving the lifeline of society and EVs damaged.
That is something the legislatives too understand, which is why they are working on a tariff: an incentive – penalty system to keep us on the right track to head for extensive EV adoption safely.
Carrot and stick approach: the incentive - penalty system
Then what is this system about? Let’s see.
The incentive: The carrot here, is actually created by markets. You see, the mentioned risk of grid blackouts can be greatly reduced by connecting EVs to grid (V2G) and make them operate as battery packs. This way, they can supplying electricity back to the grid on peak demand times. Now, we have the option to sell the low-cost energy we earlier charged from the grid, with more than we paid for, and charge our car when the energy fees are low again.
In short: we earn by owning an EV and SMART charger.
The incentive - penalty system for SMART EV charging solutions illustrated.
However, we aren’t there just yet, but the charging equipment and EVs are evolving every day to get ready for their responsibility.
The penalty: The stick in protecting our grid is the fining system created by multiple governments around the globe. As we discussed, the grid doesn’t enjoy blacking out any more than us humans do, as this can permanently damage it. That’s why legislatives are setting up systems where they cover the cost of grid damage by charging it from the actor responsible for the overload.
The SMART EV charging solution: get your carrot and dodge the stick
Here is the good news for you! The afore mentioned incentive – penalty structure leads to one conclusion: that a SMART EV charging solution is superior when compared to the dumb alternatives. It helps you get the carrot and dodge the stick, when you become a part of the grid protection shield that solves our common problem of blackouts.
And being part of the solution sets your table with the following rewards:
- Earn with V2G connection supporting our grid (in the future)
- Reduced charging costs = Charge EVs when electricity is cheap
- SMART charger owner has full 100 % control over its operations
- Remote management that reduces the need for employees
- No overload fines
Then, how you can move forward and get on board with us? I suggest, you see, what is your need for EV charging and tap into it. In workplace and at home, adopting EV charging is quite straightforward, as having an EV or employee owning one makes this attractive in of itself.
In the case you are running a fleet, a CPO or would like to attract new EV driving customers to your brick and mortar business, then you can start with this guide that gives you 3 easy to adopt EV charging business models.
Want to learn what are the three typical strategies for ev charging for retail? Get your free guide:
And if you need any help or wish to get clarity to an un-answered question, we are happy to help. So, hit us with a message or ask your question by submitting it to our “ask me anything EV webinar” and get your answer live 25th of September 2018, 3pm (EET). We are here to make EV charging work for you.
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We both know that green values go hand in hand with electric vehicles and EV charging. Then, how can you as a retailer express your green values and benefit from the more direct commercial opportunities of EV charging? In short, the answer is by selecting the best EV charger to support your business model and by providing value with EV charging.
In year 2017 we witnessed a huge leap towards sustainable and healthier transportation. Plug-in volumes have more than tripled since 2013 and continuing on last year's growth rate of 42 %, it would mean 8 out of 10 cars sold in 2030 would be plug-ins. All major car makers such as Volkswagen, Toyota, GM and Ford, to name a few, announced plans to go electric during 2017.