Let’s set the scene: You have decided to enter the electric vehicle (EV) charging business. You have the space for EV chargers and eager customers who want to charge their EVs. All you need is the charging infrastructure.
There are three common funding models you can choose from:
- Fully funded model
- Co-funded model
- Self-funded model
Each of these three models is best suited for different businesses. In this blog post, we’ll look at each in more detail.
But to understand the whole big picture, let’s first have a quick look at the transportation sector's electrification rate.
The timing is just right
We are already well on our way to road transport electrification as the EV market is constantly growing. Based on predictions, by 2030, there should be up to 40 million EVs on European roads.
Naturally, the EV charging market must follow suit, as all those electric cars need a place to charge. The groundwork has been laid out, and one is now able to cross the whole of Europe with an EV.
But to handle the size of the EV market by 2030 and beyond, we need our EV charging infrastructure to grow. That’s why it’s time for businesses everywhere to take advantage of this emerging sector and jump on the opportunity.
With the Virta ROI calculator, you can now find out in a few minutes how long it takes for your EV charging stations to become profitable:
What does ‘fully funded’ mean?
To get started with EV charging, you can turn to a charging service provider who not only offers the service to EV drivers but can also purchase and install the charging equipment and carry out maintenance at their own expense.
Depending on the agreement you make with the charging service provider, you can either get a certain percentage from the charging sessions carried out on the installed chargers, a flat fee for renting out your site for charger use, or a combination of both.
Naturally, this model offers you peace of mind as no upfront investment is necessary, and you bear no responsibility for the charging stations. The charging service provider carries out all the maintenance tasks.
At the same time, the availability of EV charging at your site attracts new customers and builds up your sustainability efforts.
What does ‘co-funded’ mean?
According to your agreement, this model splits the upfront investment and ongoing revenue generated from the charger use between you and the charging service provider.
The agreement depends on the feasibility of successfully operating an EV charging business on your site. Factors like your site’s location will determine the agreement's angle.
The charging service provider usually handles the charger operation and maintenance.
What does ‘self-funded’ mean?
A self-funded model means that you, the one with an established business, clientele and a suitable site, finance the hardware, installation and electrical connection work. That doesn’t necessarily mean you must purchase and install the hardware yourself.
Suppose you don’t feel up for installing and operating your chargers, managing energy consumption and EV drivers by yourself. In that case, you can always partner up with an EV charging service provider who can take that responsibility off your back.
Virta can provide a helping hand here. Our Charging Business as a Service is an end-to-end solution that takes care of everything you need to run a successful EV charging business – from charger installations to EV driver support.
Your investment with this model will grant you ownership of the charging points, and that’s when you call the shots. You can set your own prices for charging events, and the revenue goes directly to you.
As the owner of the charging infrastructure, you will directly profit from the increased number of charging sessions. The number of charging sessions on the Virta platform increased 70% in the past year. And this number will only go up as the e-mobility boom continues.
Enter the EV charging market now
When choosing the best funding model for your EV charging business, there are many things to consider. But one thing is clear: entering the EV charging world will benefit you. The EV charging market will keep growing, and those who enter the market now will capitalise on the growth.
To make things easier, many countries offer various commercial charging incentives aimed at companies who wish to venture into EV charging and provide the service for their customers, employees or residents. It’s always good to do your research and take advantage of such funding.
At Virta, we know the world of EV charging can seem overwhelming. That is why we aim to make life as easy as possible for those who decide to invest in their future and start an EV charging business.
If you need help determining what funding model suits your needs the best, get in touch with us!