EV Charging Station ROI Calculator: Tools and Formulas for Financial Analysis

EV Charging Station ROI Calculator: Tools and Formulas for Financial Analysis

30 8 月, 2023

With the transformation of the world to sustainable energy, electric vehicles are also getting popular. This increasing trend of having electric vehicles has also led to growth in the need for charging infrastructure.

EV Charging Station

EV charging solution providers have launched the idea for EV charging station ROI calculator. This calculator helps businesses in estimating the financial advantages of installing charging stations. This blog post is all about the EV charging station ROI calculation to analyze the financial benefit in business outcomes.

Related reading: Cost of EV Charging Stations

EV Charging Station ROI Calculator Formula

If you plan to install an EV charging station, you must calculate the ROI for this investment. By comparing the installation and operational cost of charging stations with your business’s total revenue, you can evaluate whether you should invest in it.

No worries at all if you don’t know how to calculate ROI. All you need is to use the electric vehicle charging ROI formula for this calculation as follows:

ROI = (Total Revenue – Total Cost) / Total Cost X 100

Remember that the revenue generated by a charging station includes advertisement charges, charging fees, and additional revenue streams. However, the total cost involves the overall cost of the charging station, including operational, installation, and maintenance charges.

How Does the ROI Calculator for Charging Station Work?

piwin home charging

ROI Calculator for Charging Station is a simple tool for evaluating business success probability. It’s easy to use and calculate returns on investment (ROI) on EV charging station installation.

This calculator takes accountability into the total number of charging sessions EVs need per day, the electricity cost of charging per kilowatt hour (KWh), and maintenance cost. By this calculation, businesses can evaluate how much time is required to get payback for their investment in charging stations.

Key Elements to Consider While Calculating EV Charging ROI

Here are some of the key factors you need to consider while calculating EV charging ROI:

  • Capacity of Charging Station: The capacity of the charging station depends upon the total number of charges installed on the charging station. The more charges you install, the higher the capacity of the charging station. No doubt, the investment in high-capacity charging stations will also be high. But its ROI will also be high.
  • Charging Time: The time your charging station should operate varies depending upon location and peak hours. To gain maximum ROI, one must evaluate the busiest hours of the day. A charging station will get more profit by providing charging services to vehicles during busy hours.
  • Energy Expenses: The energy cost also impacts the operational cost of EV charging stations. The hike in rates of energy and electricity means high operational costs. Estimate how much energy a charger will consume. It will help you observe how much it will cost you for the EV charging station cost analysis.
  • Charging Fee: Another important factor you need to consider is charging a fee per vehicle. The best way to grab more customers is to keep charging a fee slightly less than competitors initially. Moreover, you should offer incentives and discounts to drivers for EV charging in low-peak hours.
  • Advertising Revenue: Advertisement can often be beneficial when it generates revenue. Get this additional income stream for high ROI. You only need to advertise local businesses (by doing partnership) on your charging station for more payback.
  • Maintenance Cost: Maintenance cost is important to consider while checking the EV charger’s financial feasibility. It includes the expenses of cleaning, repairing, and running the charging station.
  • Expected Utilization Rate: Knowing the expected utilization rate is very important. You must know how many cars your charging station can charge in peak-charging hours. Furthermore, estimate the utilization of EVs in low-peak hours as well.

Benefits of Using EV Charging Financial Analysis Tools

EV charging financial analysis tools like ROI calculator benefit businesses in knowing the financial feasibility of charging stations. Through this, businesses can determine how much time they can get payback on investment. Such information helps one make critical decisions on investment and installation in charging stations.

Why is there a need for EV Charging Stations for Better Environment Sustainability?

First, let’s dig deeper into why sustainable energy is important for us and this planet. You will be aware of the alarming situation of the climate crisis. The ozone depletion, global warming, greenhouse gas emissions, and destruction of natural ecosystems have touched a disturbing limit.

All fuel-based machinery, whether vehicles or industries run on fossil fuels. These are non-renewable energy sources, and their use provides toxic gases that are released and prove to be poisonous not only for the environment but also for humans and other organisms.

Price hike is another major problem associated with the use of fossil fuels. The cost of retrieval of fuel, its processing, transport, and import together charge a huge sum to the consumers annually.

Sustainable energy is the ultimate solution to all these problems. The sustainable sources of energy are efficient and eco-friendly. However, due to their recently emerging trend, they do not have well-established infrastructure. This is the point where we talk about charging stations.

Growing Demand for Charging Stations

Assessing you here means that you are also a technology person. You own modern technology devices that need to be charged regularly. You may own an electric vehicle or are planning to buy one. And you will probably be worried about the charging stations. We have good news for you: With the increased popularity of EVs, their properly established infrastructure (just like the fossil fuels-based ones) is now under consideration.

Regarding the increased popularity, the report by Research and Markets claims that the global EV charging station equipment market was USD 140.71 billion. And it will be increased to USD 194.87 billion by the end of 2023, which is no wonder. The hiking demand for EVs, electric bikes, and other rechargeable devices is rapidly growing in this market. And it will keep growing in the future while leaving the fuel market behind.

Secret to Long-term Profitability in EV Charging Stations

If you are looking for a business opportunity, then one of the businesses that will give you the profit in the long run is EV charging stations. We will tell you everything you need to know about the investment and factors related to EV charging stations.

EV Charging Stations Market

With their increased acceptance and adoption, EVs have embarked on a whole market in the world. This market has been shown to flourish at an exponential rate in recent years. According to Bloomberg NEF, the EV fleet at the beginning of 2023 was 27 million. This is anticipated to increase to 100 million in 2026 and about 700 million by 2040.

In the past, when EV technology was novel and not everyone had EVs, there were no charging stations. People mostly charge their EVs at home. The expanding trend of EVs has now opened the opportunities for EV charging stations at public places and highways where people can conveniently charge their EVs and do not have to go home every time their EV battery runs out.

Types of EV Charging Stations

EV charging stations are classified into three types based on the charging time. The charging time depends on the type of vehicle, battery, and charging station output.

  • Level 1 charging: It is the slowest form of EV charging. It has a 110-volt output and takes 8-20 hours to charge the EV.
  • Level 2 charging: These are faster than level 1 charging stations. They have a 240-volt output with 3-8 hours of charging time.
  • Level 3 charging: These include fast and ultra-fast chargers. They are the fastest form of charging and with 15-350 kWh output. The client can charge their vehicle in 15 minutes to 1 hour.
piwin public charging

Factors Affecting the Investment Cost in EV Charging Stations

Before investing in an EV charging station, consider these factors to maximize the electric car charging station’s profitability:

  • Location: Choose a location where there is less chance of a parking lot. Moreover, the areas with high traffic and commercial areas are best for installing an EV charging station.
  • Government Incentives: Establishing an EV charging station at a direct place can win you government incentives, which will save your investment in installation costs.
  • Installation Cost: Installation cost depends on the type of charging station. Furthermore, it can sometimes be higher than the equipment itself. So, research the innovations you can adopt to reduce the installation cost.
  • Type of Charging Station: Once you have decided on the location, you will decide the type of charging station based on the type and preference of the EV owner. The cost will vary whether level 1,2 or 3 charging stations.

Potential Benefits of Investing in EV Charging Stations

Before investing in an EV business, calculate how much revenue you can generate by investing in infrastructure. It can be done by using a reliable EV infrastructure investment calculator. If your revenue seems profitable, then consider these additional benefits that you can get by investing in EV charging stations:

  • High Profit: With the increasing trend of EVs, their charging stations are also in high demand, especially in urban areas where people frequently travel back and forth in the city. It can prove helpful to increase your sales and hence profit.
  • Quick Permits: Due to the high demand for EV charging stations, obtaining licenses and permits for installation is now very quick and easy.
  • Minimized operational costs: The staff requirement at an EV charging station is less. There are also no major upgrades required. So it will minimize operational costs.
  • Incentives: Nowadays, businesses promoting green energy usage enjoy many incentives, such as tax breaks and other financial rewards. The Government awards these to encourage the people to move towards sustainable and green energy sources.
  • Green Reputation: Nowadays, scads of people are aware of the harms of fossil fuels and the need for green energy. Your business can help to encourage them to move toward EVs. It will also attract contemplative customers who care about the planet’s health.

Do EV Charging Stations Have a Profit Margin?

Considering the growth of the EV industry, the interest of people, and the huge market associated with this industry, the EV charging stations business is a profitable choice. However, to maximize your profit, you must first look at ways to make your business profitable.

For example, the hardware and installation incentives, the tax incentives, and a lot of debate favoring EVs as sustainable and green energy sources will help you reduce costs, increase revenue, and attract customers.

Generate Consistent Revenue from EV Charging Stations

You may have noticed a convenience store, coffee shop, cafe, or small restaurant whenever you visit a gas station. These are the ways that station owners use to increase their revenue. You can infer from it that revenue can not only be generated by selling only gas, and in the case of EV charging stations, only charging the EVs. For consistent revenue, you must install customer attraction on your charging station.

Concluding Remarks!

Making investments in EV charging stations is a great step due to the increase in Electric vehicles. Even if you have a business already, installing a charging station can increase your business reach and growth. Engage more customers by offering special charging offers for EVs on your charging station.

If you are here to find the most reliable charging station, Piwinev Charging stands out in the market. We offer affordable and customer-friendly services. Our charging services are available 24/7 throughout the year. Contact us for the best residential and commercial EV charging services, regardless of time and location.