Boost Rental Income with EV Charging Installations

June 6, 2023

SHURE Initiative

A new pattern has emerged post-COVID: Students, faculty and staff are driving to campus more frequently, while public transit ridership has struggled to recover to pre-pandemic levels. This trend, while problematic for municipality tax revenues, is good news for the already booming EV charging industry, whose sales have soared in tandem with global carbon reduction efforts.  Indeed, landlords are attracting higher income tenants and boosting revenues by making EV charging more readily available – and fun.

The SHURE Initiative spoke with David Rehimi, who is Canadian Country Manager for ChargePoint, of the largest global EV infrastructure installers. University footprints are a priority for ChargePoint, with their robust vehicle traffic. In many university settings, it is not uncommon to find five or more parking facilities.

David shared his excitement for the growth of the EV arena, and specifically the opportunities to invest in the underlying infrastructure in this SHURE Interview.

SHURE: Post-COVID, mass ridership on subways and other forms of public transit has declined, although ticking up, still is far short of 2019/early 2020 levels. In short, more people are driving. This seems to be a solidifying trend for the EV charging industry.  

DR: We've seen post-pandemic charging numbers increase, for sure. The percentage of sales of EVs increased during COVID. Coming out of COVID, we're starting to see that trajectory continue.  We are seeing something like 60% growth of electric vehicles year over year. That result for us now is the trajectory of electric vehicle penetration, such as in British Columbia, where one in five vehicles now sold is an EV. And now that's starting to translate into workplace charging as people return to work with their shiny new EVs. I will be as bold as to say Downtown Vancouver is one of the highest EV charging utilization areas in the world. To your point, it's taken on a new form post pandemic, and it has made quite an impact in our industry.

SHURE: What is the message that ChargePoint is trying to get to university planning executives about the EV and EV-infrastructure transition?

DR: The university EV charging strategy is critical for the adoption of electric vehicles in their campuses, in their communities, in their municipalities that they're located in. Just like a lot of the amenities they make available to the community, whether it's recreational facilities, restaurants or facilities related to community engagement, EV charging will be a great addition to that list and a sought-after amenity.  However, EV charging must be considered strategically. There must be a plan that is long-term and not shortsighted. Having a thoughtful, cost-efficient, and expandable strategy is critical. And it's not easy with universities because of the multi-modal transportation that takes place there and the various reasons people have to visit a campus. 

These multi-application parking scenarios are complex because you have short term, long term, super long term, community parking, faculty, student, and visitor parking. You have people who are coming to watch sports and theater events at the school, students, and faculty alike so that there's a huge variance in commuter length, dwell time and the types of drivers that universities will serve.

And that’s where you need to begin to think about more than just building codes, electrical capacity, and other siloed metrics to determine how much charging to deploy. Each university will be different, and each building ultimately will be different.

Therefore, a thoughtful approach that considers the drivers and their behaviors will be critical to unlocking a very sought- after amenity for university campuses.

SHURE: Are you seeing trends with popularity of certain EV vehicles? Is Tesla more important or more popular than Toyota or the other players?

DR: Honestly, it’s whatever people can get their hands on. We're still in a deficit in terms of vehicle allocation. 

SHURE: Describe the plan to phase out fossil fuel vehicles in the next 10 years?

DR: The government of Canada fleet must be all electric by 2030, and there are also what's called ZEV mandates for passenger vehicle sales, Zero Emission Vehicle mandates. They exist in California, British Columbia, Quebec, and then federally in Canada. The federal goal is the same as the provincial mandate here in British Columbia that by 2035, 100% of passenger vehicles sold must be electric. And in BC by 2030, 90% of passenger vehicles sold must be electric.

SHURE: Describe the nature of the project of EV infrastructure installation from the beginning step of RFP and time involved.

DR: This is the big question! The strategy will change based on each building type. And then the deployment will change based on the individual building. But it all starts with thoughtful strategy development, thoughtful and practical strategy development. You must know why you're installing EV infrastructure at your university or multi-family building: Is the installation to meet a building code? Is it because you have drivers asking for it? Is it because you want to increase the property value or dwell time? Whatever it is, you need to frame out exactly what you're trying to get out of your EV charging deployment.  There's so much more to EV charging than people understand!

There are also multiple options in terms of your business and financial strategy around EV that are emerging. For example, if you want to have a lease option that goes on your operating expenditure versus a capital cost that you purchase upfront utilizing rebates and subsidies. There are tax benefits in Canada where you can accelerate the depreciation of an asset if it's related to EV.  You can't start thinking about putting out chargers before you know why you are doing this. As a landlord, what's in it for you? What are your goals? How does this fit into your business? What type of business strategy do you want around it?  What type of financial strategy do you want around it? And, then once all that is clarified, then we can start thinking about deployment, understanding the building types, and most importantly, how people are using those spaces.

It's all about the drivers and the batteries. What state of charge is the battery in when it arrives? How long is that driver staying? Can we motivate that driver to stay longer with promotions or retail integrations or cost incentives? Do we even want that? Is it a retail application you are trying to increase dwell time to increase basket size so that you make more revenue?  There's just so much to consider.

Unfortunately, there are a lot of new entrants in this space. It's kind of the Wild West in the EV space right now where many will tell you whatever you want to hear, they'll sell you whatever you want to buy, and they're here today, gone tomorrow, so a tempered, well researched approach is critical.

A thoughtful and strategic approach is the most important part of making sure that the EV strategy is working for you.

In addition, there is a lot more to post-installation than people understand, and that's going to be a huge shift in perspective around EV charging once we start to see penetration rates higher than the low single digits.

20% of new vehicle sales are electric, but that's still only one or two percent of the overall population of vehicles, right? You may increase that by a couple points when considering vehicles you serve today, assuming that people with EVs are driving more kms due to the gas saving implications, but it's still not huge yet.

With things like advertising, cross-promotion, data mining, this is a space that hasn't even been tapped yet - the immense amounts of new physical data that's going to be so relevant to so many spaces in terms of how vehicles behave, how drivers behave. 

SHURE: In terms of real estate, owners and operators look at both the impact on appraised value and in tandem, the increase in rental rates. What have you been able to correlate in terms of a connection between increase in rental rates and then appraised value after an EV installation?

DR: If I knew precisely, I'd be telling every single real estate person in the world about it, because that's a big question - asset value. That's the biggest motivator and biggest goal for any of these REITs or holding companies who have a portfolio, and that's what they always ask me the same question: What will this do to my property value?

The real impact is still yet to be clearly quantified given that we're so early in this space. However, what I can say is that in places like British Columbia, there are more and more aggressive building codes that are being passed.

If you are selling a unit, or if you are looking to fill a rental spot and you don't provide electric vehicle infrastructure, as a landlord, you will pale in comparison to new construction because the new buildings in most BC municipalities require that 100% of the stalls have the infrastructure for EV charging.

SHURE: Let’s talk about incentives in a nutshell.  What types of incentives are available in Canada, in terms of city, state, federal, and then around the world?

DR: It sounds silly to say but they are mostly the same but different. It’s usually a rebate on the capital cost of the entire project. So that means installation, professional services, the equipment itself, the warranties associated with the equipment and the engineering/consulting that needs to happen - all those project costs become eligible. For these incentives, in Canada, they're usually about 50%. There's a great federal program called the Zero Emission Vehicle Infrastructure Program put out by National Resources Canada and that's generally a 50% rebate. In British Columbia specifically, we have some clean BC rebates at around that same ratio.

However, in the US, the big game changer that Biden has passed called the NEVI program. It's a huge fund and will be a great economic stimulus in the US and for the proliferation of electric vehicles. There will be a high incentive somewhere to the tune of up to 70% - 80% depending on your project costs for specific applications. Those are the purchase incentives. There are unique incentives, like in British Columbia, where we provide a 90% incentive to indigenous communities who are applying and installing chargers in their tribal grounds because they have so many gaps in infrastructure and resources there, ZEVIP has a similar stream of funding as well.

Aside from rebates, the big topic which you heard about is carbon credits, and not every state or province has a carbon market or participates in the carbon market.

Currently we support the low-carbon fuel standard programs in Oregon, California, and here in British Columbia, and federally across Canada as well, it's a huge cost/strategy implication. And this is again, where I'll take it back to strategic and thoughtful planning around what this EV deployment looks like for you.

SHURE: You mentioned there's a strong connection between income of tenants, the types of vehicles they drive, and amenities they seek out in renting apartments, right?

DR: Yes – 100%.  EV drivers are a very desirable demographic for many applications. You’ll get a solid renter with a good income who can afford an EV or someone that's thoughtful enough to drive a vehicle that's better for the environment.

In fact, when I started at ChargePoint, the statistics were that the average EV owner's household had an income of over $150,000 (USD) with two college educated adults. I am sure this has evolved since, but there's still a lot to be said around the desirability of that EV demographic.

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