Why Developers are Plugging Into Electric Vehicle Charging Stations Before the Year Ends

Developers looking to install electric vehicle (EV) charging stations are in luck, with generous state and local incentives available to help finance the change — if they act on it this year.

To some, electric-vehicle charging sounds like its decades away from becoming the norm. In reality, electric vehicles are rapidly growing in popularity. Between 2015 and 2019, sales of electric vehicles increased 400 percent across the U.S. While these purchases dipped in the days immediately following the pandemic, electric vehicles are forecast to continue growing in market share as they present a positive long-term value proposition for consumers. As a result, businesses and developers alike will have to adapt as more and more of these vehicles hit the road.

Fortunately for developers, assistance has been made available to help businesses investing in EV charging stations. The U.S. Code 30C Alternative Fuel Infrastructure Tax Credit allows qualifying businesses to recoup 30 percent of costs when installing alternative fuel infrastructure, up to a total of $30,000. These incentives were first put in place in 2018, but time to take advantage of them is quickly running out. Any EV charging stations in place after December 31st, 2021, will be out of luck.

Start Charging

Incentives like this regularly come and go in the development community, so what is the rush? While the incentives have a clear cutoff date, more and more cities and states are beginning to mandate the installation of EV charging stations as part of new building codes. These mandates already exist in Arizona, Washington, Georgia, Hawaii, Massachusetts, New York, Oregon, Florida and Utah.

As of August, Orlando became the latest city to pass such an ordinance, mandating 10 percent of parking spaces at all commercial and industrial developments be set aside to be EV capable. For hotels, multifamily housing, and select parking structures, 20 percent of spaces must be EV capable. Additionally, all these sectors must each set aside two percent of their parking spaces to be reserved exclusively for EV charging vehicles.

Similar to the solar energy industry, it’s possible that other incentives may appear making the development of EV charging stations more appealing or viable, but these tax breaks are unlikely to be as substantial in the future as they are today. Businesses with a large pool of parking spaces will be particularly vulnerable as more locations mandate the adoption of EV charging, and a $30,000 tax break could help developers take the steps they need to stay ahead of both the competition and state regulators.

Power Forward

A number of developers and business leaders have stood against the adoption of these requirements, citing prohibitive costs at a time of economic uncertainty, and in light of the ongoing pandemic they may have a point. While their efforts may be successful at stalling ordinances in some locations, the path necessitating this technology is clear. As more consumers buy into these vehicles and pressure mounts from neighboring states, it would be unwise for developers to think they can run out the clock on this issue.

For example, while Nevada does not yet require EV charging stations at its residential or commercial properties, its neighbor California, a frequent source of tourism dollars, does. Nevada, and particularly Las Vegas, has seen an increase in competition for casino and events attractions all across the U.S., and the destination must be prepared to do whatever possible to remain competitive at a time when consumers are more value conscious than ever before. It’s not difficult to imagine that a rise in electric vehicles from California, Arizona, and others will influence decisions made by the Nevada Tourism Board.

Even if these mandates take years to implement, EV charging is becoming so ubiquitous in the U.S. that it may be a differentiator when it comes to booking business. This pressure is being most acutely applied from international travelers. EV charging mandates are already essential in many countries across Asia and Europe, making them something international drivers are accustomed to. This, plus an increased commitment from auto manufacturers to produce and distribute more of these vehicles has raised their profile across the world, making them something almost aspirational to travelers booking rental cars.

Another aspect to consider in the rise of EV adoption is a growing focus from large corporations on their environmental impact. A growing share of Fortune 500 companies have greenhouse gas protocols (GHP) to follow, in addition to other ESG commitments they have made toward preserving the environment and fighting climate change. As a result, the adoption of electric vehicles is expected to grow precipitously over time.

Ahead of the Curve

Developers and business leaders must start thinking long term in order to avoid facing the penalties that come with failing to adapt to EV technology, particularly as the end of the year approaches. Construction across the U.S. has suffered debilitating delays for a multitude of reasons. The impact of the labor shortage remains far reaching in construction, with a lack of skilled tradesmen increasing development time across the board. This poses a challenge for developers looking to take advantage of EV tax credits whose expiration date is market Dec. 31, 2021.

Additionally, while the price of installation for EV charging stations have remained somewhat static over the past few years, the previously mentioned development crunch has caused the price of labor to increase. These estimates are also at the will of fluctuating materials costs, which remain volatile due to disruptions in global supply chains that are unlikely to be resolved by the end of the year.

The message, then, is clear: for developers who have the available capital and the will to remain ahead of the curve, there is no better time than now to invest in this technology. There are many reasons beyond tax incentives to provide a robust EV charging environment for your customers and employees.

Most importantly, this technology provides a clear competitive advantage that is only going to be more relevant over time. With just 10 and 20 percent of parking spaces currently mandated for EV charging and the adoption rate of these vehicles on the rise, these measures could even be interpreted as too forgiving. There may come a day very soon when your business’ parking lot is host to more electric vehicles than traditional transportation. Accommodating these consumers is key, and making them feel welcome today is a good place to start.

In order to act on this now, businesses should start by fully understanding the U.S. code pertaining to EV charging station tax credits, before then discussing timelines with developers. Business leaders should also work to understand how their local market is impacted by city and state ordinances, as well as the number of electric vehicles normally visiting your premises.

The future of transportation is green, and it’s up to U.S. businesses to help with the ongoing transition to electric vehicles.

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About the Author

Robb Monkman is a mission-driven entrepreneur who is passionate about making the world a better place. Robb is a founding member of Charge Up USA where he is making an impact by accelerating the transition to electric vehicles (EV) and other electric technologies. Robb is also the founder of a leading global employee safety platform where he is currently serving on the company’s Board of Directors. With over a decade of experience launching multiple hardware and software products at multiple early-stage companies, Robb is an active angel investor and advisor helping companies that are making a positive impact on the world.

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