For decades, public charging stations were written off as “nice-to-haves” that spelled liability for the balance sheet. But as public charging stations become essential transportation infrastructure, they’re finally starting to turn a profit. A new study analyzing national EV charging trends found public charging has finally become profitable, particularly for Level 3 direct current fast charging (DCFC). For the first time, the utilization rate of fast chargers reached 15 percent, meaning each Level 3 charger across the country was in use for approximately five hours a day. EVgo, one of the nation’s largest charging networks, reports that in Q2 2024, 23% of its fast-charging stalls had a 30% or greater utilization rate. These statistics show the turning tide for EV charging stations towards profitability.
Increase in traffic and lagging infrastructure bring hurdles to profitability
As EV sales continue to increase, the road to maintain profitability as a charge point operator (CPO), or other business entity expanding into EV charging, is not linear. An increase in traffic can bring operational challenges that can weigh heavily on CPOs’ bottom line, especially for those who don’t have the proper technology in place to support the demand of incoming drivers. In conjunction, energy infrastructure has not kept pace with the emerging electrical transition overall, creating grid challenges that can further hinder progress towards profitability. For example, exceeding grid capacity at the charging station can bring higher rates or penalties from local utility companies. According to the Department of Energy (DOE), the strain to the grid may only increase. By 2030, domestic electricity demand is projected to increase by up to 18%, largely due to the rise in EV usage, and this increase in demand could continue to put a major strain on aging grid infrastructure.
Even with these challenges, CPOs can guard against rising CapEx and OpEx to reduce their total cost of ownership (TCO), and reach or maintain profitability. This can be achieved by focusing on two key areas:
- Prioritizing operational excellence to keep chargers online in an effective way
- Controlling the flow of on-site energy to overcome grid capacity and control energy costs
How does EV charging operations management play a role in keeping costs down?
Operational excellence is a leading tactic to enable profitably at EV charging networks. It starts with staying on top of network health, monitoring 24/7 to identify issues in order to keep more chargers available for incoming drivers. Advances in EV charging software have allowed for the emergence of self-healing algorithms to support CPOs in the mission to keep their operations running smoothly. Such software can automatically detect issues at individual charging ports before they become larger concerns for the network, and fix 80% of charger issues remotely and instantly, including the ability to activate or deactivate a charger, stop and resume charging session, update the firmware and more. Additional benefits to the CPO’s bottom line via optimizing daily operations include:
- Dramatically reduced on-site visits for technical issues
- Reduced charger downtime enabling more opportunities for customers to plug in
- Fewer calls to customer service regarding charger complications
- Customer use data and other behavioral KPIs and insights that can benefit business decisions
As the needs for additional EV charging infrastructure continue, CPOs will have the opportunity to expand their networks. Consider how the National Renewable Energy Laboratory (NREL) found that the United States will need approximately 28 million EV charging ports by 2030 to support an estimated 33 million EVs on the road. This market opportunity for CPOs will allow for extensive network growth, and operational excellence will need to be top of mind to reach profitability with news sites. Proper charging software can ensure error-free operations of large-scale networks with minimal downtime.
How can CPOs overcome local grid capacity obstacles and stay profitable?
In order to overcome local grid capacity issues, CPOs can plan to better harness existing energy sources and more efficiently distribute power between infrastructure and vehicles to balance load throughout the day. Gaining access to real-time insight into dynamic load balancing allows CPOs to distribute available energy accordingly for each customer. The ability to closely monitor that energy usage, at any site level from single chargers through sites and complete campuses, is critical to prevent blowing a fuse. This can be done most efficiently by utilizing smart energy management software to adjust the energy allocated for EV charging and accommodate unmanaged loads. In addition, the ability to reduce power to chargers on demand allows for further control over EV charging sessions during demand response events. With the addition of on-site renewable energy sources and battery storage, CPOs can further guard against aging infrastructure to maintain power to their stations and keep drivers satisfied with their experience. Additional benefits to optimizing on-site energy management include:
- Leverage automated cost optimization
- Dynamic load balancing and peak-shaving to prevent exceeding site capacity or incurring overage charges
- Cut CapEx by optimally distributing energy consumption to avoid costly infrastructure upgrades.
- Participate in energy flexibility markets
Looking ahead in EV charging profitability
Improvements in charging technology, including faster charging speeds and better interoperability, will continue to enhance the driver experience and support the growing EV market to bring profitable returns to CPOs. The challenges that lie ahead in maintaining daily business operations and working with local grid conditions must be top of mind, but solutions exist to support the hurdles that will arise.
Scalable end-to-end software solutions that provide detailed analytics for deeper insight on energy management, charger functionality and customer data is an investment that will deliver an ROI. Technology solutions that address these business challenges will also create an enticing experience to retain existing customers and win over new ones, by delivering a seamless and reliable charging experience.
Driivz, for example, provides a software solution that is granular enough to address site-specific challenges while ensuring flexibility to evolve with the changing EV landscape. The EV charging and energy management software evolves with the latest industry standards and protocols, providing seamless integration with legacy systems and the freedom to create custom operating systems ready for the road ahead.
