The gasoline-powered car has spawned a whole universe of businesses around it — especially the gas station, a place where drivers can fill up, pick up a coffee and buy a lottery ticket.
What happens to that ecosystem in a world of electric vehicles? A new study published in Nature Communications from researchers at the Massachusetts Institute of Technology suggests electric vehicle charging stations open up their own world of possibilities.
By combining EV charger locations in California with data from payment card transactions, the researchers found that businesses near an EV charger saw increased sales compared to similar businesses not near a charger.
“There are huge efforts both at the government level and also for many like EV providers, they want to invest in EV chargers. But the investment in EV chargers often faces profitability challenges because the utilization rate of these EV chargers is still very low,” said Yunhan Zheng, a postdoctoral associate at MIT and lead author of the study.
Her research suggests there’s an incentive for businesses and governments to install chargers, because the cost could be partially offset by increased sales at local businesses. A 50kW DC fast charger with five ports runs about $280,000 US.
The study found annual spending rose at businesses near the chargers by 1.4 per cent, or $1,478 US, in 2019 and 0.8 per cent, or $404 US, between January 2021 to June 2023 when compared to similar businesses that did not have a charger nearby. (The researchers avoided using 2020 data due to the impact of COVID, which may have also depressed spending in 2021-23.)
While it’s a small percentage, for 2019 that amounted to almost $23,000 US, on average, in spending increases across all businesses near a single EV charging station. And the study found an increase in sales in lower-income neighbourhoods too, suggesting potential opportunities for some communities to attract more visitors.
“We have been waiting for an article like this to come out for years. We have intuitively known it to be true that if you install an EV charger, you’re likely to see an uptick in your business as a retail owner,” said Chris Thorson, chief marketing officer at Flo, a major electric charger company that’s installing stations across Canada and the U.S.
“Why is it important? Because people are naturally skeptical. There’s a lot of money spent on deploying an EV charger.”
The study could back up Flo’s argument that chargers benefit businesses by attracting more customers — and giving them a better experience while they wait to “fuel” up their cars.
“A gas station is typically not a place that you’re going to take your date, right?” Thorson said, explaining that an EV charging station could complement a driver’s other plans, like finding a place to eat or doing groceries.
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