Steps To Start An EV Charging Station Franchise Successfully

The first step to opening an EV charging station franchise is finding the right company to partner with.

An EV charging franchise could be an excellent opportunity for you if you run a successful business outlet in an urban location.

A franchisee can generate steady revenue streams for the future by investing in electric vehicle charging station franchise costs. Additionally, the EV charging market is growing rapidly, and franchisors can take advantage of that as well. 

Here are the steps to get started if you want all the benefits of owning EV charging stations.

1. Choose a location

You should do this if you want to start an EV charging franchise from scratch, unless you already have an outlet or are already a business. 

The location of your charging station should be convenient transportation-wise and see a lot of traffic every day. Keep a simple thing in mind while picking a location. It is ideal for stations to be located near highways, shopping centers, housing complexes, communities, etc. Also, make sure the location is visible from the adjacent road and that cars can easily access and leave the charging station. 

2. Find a Trusted EV Charging Company 

It is important to join forces with a reputed and trusted company so that your EV charging station franchise will operate smoothly and effectively. You must look for a franchise opportunity that provides an affordable franchise opportunity as well as aligns with your business objectives.

Choosing the best company requires some research. Make sure the company has a good reputation in the electric vehicle charging industry and has experience. Shortlist the companies based on that and ask them questions.

Find out how much franchising support they provide and what franchise fees they charge, including royalty fees. After knowing the potential cost of each company’s EV charging station franchise, you can make a wise choice. 

3. Installation and Set-up of Charging Station

As soon as you pick the location for the charging station, you can get started. Fortunately, the charging company will handle the whole installation process on your behalf.

Upon assessing the space available, its construction engineers will design the station based on the electrical wiring and other infrastructure modifications. It will send electricians to complete the electrical wiring and other infrastructure modifications.

Additionally, the company will acquire the specific chargers and support equipment for the station through its own procurement solutions and supply network.

Additionally, it has dedicated members who are responsible for obtaining permits and handling the paperwork required to ensure that the station installation is legitimate.

4. Put efforts into marketing

If you have not marketed your EV charging station franchise well, it will not be profitable. Therefore, once the installation is complete, you need to start marketing. 

It is important to spread the word about your charging station at your business place so that you can attract more customers.

Getting customers for your electric vehicle charging station is as simple as following these tips.

1. Your website can be used to advertise the news.
2. To announce the launch of your EV charging station, post in sequence on your social media page.
3. Make flyers that catch people’s attention and distribute them among local residents and businesses.
4. If you already have a business at the station, offer lucrative promotions and discounts on your products/services to lure customers.
5. In the initial days after installation, keep charge fees to a minimum or waive them for the first few customers.

5. Decide pricing model for revenue

As a last step, you need to determine the pricing model that you will use to generate revenue from your EV charging station. For example, you can charge drivers based on their charging duration, their power consumption, or a combination of both. 

A successful EV charging station franchise requires you to recover the franchise cost as quickly as possible to obtain sufficient profit. To do that, you must analyze and wisely predict the flow of cars and their likelihood of using your charging station. 

You should also consider the following factors when setting the pricing structure for your EV charging station:

• Operational and installation costs.
• Infrastructure costs associated with power and electricity supply.
• The franchisor receives royalties (EV charging service company).
• Your EV charging business may be able to expand in the future.

Major Factors Influencing The EV Charging Station Cost 

There is an incessant increase in the demand for electric car charging stations in the USA as more and more people use them. A zero-emission economy is also being envisioned by 2025 by the federal government, which is requiring private and public entities to build charging stations to power electric vehicles.

Private business entities can now own EV charging franchises and participate in the growing EV infrastructure, regardless of the type of business they own. It is still common for business owners to be hesitant to invest in franchises because of the cost.

Franchise ownership isn’t necessarily more expensive. If you understand the factors that affect the cost, you can invest wisely.

1. Location

It is very important to consider the location of the charging station before installing it. The cost of a franchise will be higher in a city or near a highway entry/exit if you’re trying to establish a charging station. Land and parking space are both expensive in such an area, so your franchise fee will also be higher. 

This is why charging stations should be placed near high-traffic areas such as supermarkets, shopping malls, office buildings, or residential developments to keep your costs low while increasing foot traffic. 

2. Infrastructure and installation expenses

Charging station franchise costs are directly determined by the infrastructure and installation expenditure needed to install the station. A franchisor or electric vehicle charging company will establish the price after evaluating the expenses associated with the installation. 

This will include the cost of prewiring, adjusting existing electrical conduits, and leveling the land. The franchisor will request a cost that covers design planning, site preparation, construction, and prewiring.

3. Competition in the market

It is indirect that the cost of an EV charging station franchise is influenced by the current market situation, particularly the level of competition. The market is becoming increasingly competitive as more and more businesses install or supplement their existing business premises with charging stations. 

Researching the potential of traffic and demand at your station, as well as the likelihood of other stations opening nearby, is imperative before installing your station. There will be fewer charges for the franchise if the location is in a high-demand area but also has many charging stations nearby.

4. Pricing structure/revenue model

Your charging station’s revenue model or pricing structure is another factor that determines the cost. The franchisor will determine the cost based on the pricing model you choose. For instance, if you chose to charge EVs according to a profit-oriented pricing structure, the cost would be higher. Alternatively, a franchise can be comparatively cheaper if it relies on sales. 

How Much Does EV Charging Station Franchise Cost?

As you’ve read about the factors affecting the cost of starting an electric vehicle charging station franchise, you might be wondering how much it costs to open one in the United States. 

It is impossible for us to provide an exact cost estimate, but here is a rough estimate based on factors such as the type of chargers used, the number of chargers to install, and necessary electrical improvements.

It is a lower-power charger, suitable for residential use, and it is also the cheapest of the three types. Level 1 chargers are not suitable for commercial charging facilities because they consume less power. 

The average price of a Level 2 charger ranges between $100 and $5000, while the average price of a Level 3 charger is between $30k and $8k. As the most expensive ones, Level 3 chargers are ideal for providing premium charging services to customers. They are usually installed in luxury hotels, upscale shopping centers, multi-specialty service centers, etc. 

We recommend installing Level 2 chargers at commercial facilities, which are affordable and can charge a car quickly. They can charge a car fully in five to eight hours, but their range is 30 miles per hour. That is more than enough for vehicles traveling around the city, going to work, or running errands. 

Common Risks in EV Charging Station Franchise 

There are risks associated with any investment, so when investing in a franchise for an EV charging station, you would also be wise to be prepared for them. If not risks, challenges will come up during your journey, which you will need to deal with before they hamper your success. 

The following are some of the most common risks that come with starting an EV charging station business:

1. Higher upfront costs

The upfront costs of electric vehicle charging stations make many small business owners hesitant to invest, even though they are profitable over the long run. Initially, they are unsure of the profits they will earn in the future, and the costs seem excessive. Installing a station is more costly because of the cost of purchasing a Level 2 charger, renting/buying a space, electrical upgrades, and engineers’ labor. 

Make sure your commercial EV charging station earns profits by analyzing your upfront costs and deciding on the appropriate price or revenue model.

2. Fluctuating demand

Due to the uneven distribution of EV charging stations in the US, it is evident that EVs are not equally popular in all states. If you want to open an EV charging station franchise, you will need to carefully select a location. 

It should be located in a state where electric vehicles are common. If you are unable to choose your state, then do some research before investing to minimize your risk. If you need public transportation, shopping malls, hospitality centers, and other public amenities, choose a location that is close to them.

3. Higher competition 

  The competition intensified after the federal announced its goal to expand the electric vehicle charging network and encouraged the private sector to participate.

With competition growing fast, it’s becoming increasingly difficult for business owners to invest in franchises for electric vehicle charging stations. More and more businesses are getting involved to reap the benefits of electric vehicle charging stations. 

A lot of small charging stations are competitive because big companies like Shell and BP are putting more pressure on them.

The question is whether charging stations are profitable despite competition.

If you provide additional services or benefits, you can make your charging station profitable despite numerous competitions. For example, you can offer snacks, free WiFi, or a gaming zone! Ultimately, it will increase the dwell time of your customers, boosting your business.

If you already have a business shop or outlet, then you may want to offer additional discounts on your products to customers who charge their electric vehicles. 

4. Complex regulations

To install an EV charging station, you must comply with the local electrical commission regulations as well as the regional electrical authority. You also need permits to install it due to the need for a continuous power supply. 

There is a difference between the regulation and permit process for different locations. Some municipalities require businesses to deal with a simple process, while others require a lot of paperwork.

 A good recommendation is to partner with an experienced electric vehicle charging company that can help you obtain permits and meet compliance requirements.

People Also Ask

What is the profit margin on EV charging?

The profit margin on EV charging can vary widely based on factors such as location, energy costs, pricing strategy, and utilization rates. On average, profit margins for EV charging stations can range from 10% to 30%. Key factors influencing the profit margin include:

• Electricity Costs: The cost of electricity, which can vary by region and time of day, is a significant factor.
• Initial Investment: Costs for equipment, installation, and maintenance can impact profitability.
• Usage Rates: Higher usage rates can lead to better returns on investment.
• Pricing Model: Whether the station charges per kWh, per minute, or a flat fee can affect margins.

How to setup an EV charging station?

Setting up an EV charging station involves several steps:

1. Research and Planning:

• Conduct market research to determine the demand and best locations.
• Choose the type of charging stations (Level 1, Level 2, or DC fast chargers).

1. Site Selection and Permitting:

• Identify and secure a suitable location with adequate power supply.
• Obtain necessary permits and approvals from local authorities.

1. Equipment and Installation:

• Purchase charging equipment from reputable manufacturers.
• Hire certified electricians and contractors to install the stations.

1. Integration and Testing:

• Ensure the charging stations are integrated with payment systems and management software.
• Test the stations to ensure they are operational and compliant with safety standards.

1. Marketing and Operation:

• Promote the charging station to attract EV owners.
• Implement a maintenance plan to ensure reliability.

How to start a mobile EV charging business in the USA?

Starting a mobile EV charging business in the USA involves these steps:

1. Business Planning:

• Develop a business plan outlining the services, target market, pricing, and operational strategy.
• Determine the initial investment required for vehicles, charging equipment, and technology.

1. Legal and Regulatory Requirements:

• Register the business and obtain necessary licenses and permits.
• Comply with local, state, and federal regulations regarding mobile services and electrical work.

1. Equipment and Technology:

• Purchase or lease vehicles equipped with mobile charging units.
• Choose reliable and efficient mobile charging equipment.

1. Operations and Logistics:

• Set up a dispatch and booking system for customers to request mobile charging.
• Develop a schedule and route plan to optimize service delivery.

1. Marketing and Launch:

• Promote the mobile charging service through various channels.
• Launch the service and continuously monitor and improve operations based on customer feedback.

How much does EV charging cost?

The cost of EV charging depends on several factors, including the type of charger, location, and the pricing model of the charging provider. Here’s a general overview:

1. Home Charging:

• Level 1 (120V) and Level 2 (240V) charging at home typically costs between $0.10 to $0.30 per kWh, depending on local electricity rates.

1. Public Charging:

• Level 2 charging stations often charge between $0.20 to $0.40 per kWh.
• DC fast charging stations can charge from $0.35 to $0.60 per kWh, or a per-minute rate ranging from $0.15 to $0.30 per minute.

1. Subscription Models:

• Some providers offer monthly subscription plans that can lower the per-charge cost for frequent users.

1. Additional Fees:

• Some charging stations may include additional fees, such as connection fees or idle fees for vehicles left plugged in after charging is complete.

These costs can vary significantly based on the provider, location, and the specific charging network.