- Electric vehicle sales are increasing at a rapid pace.
- This presents a unique new challenge to multifamily community owners and developers to meet the needs of their tenants.
- There are potential tax credits that are available for installing electric vehicle charging stations.
I drive a Tesla. I’m not writing that to be cool (is it cool?) or out myself as an Elon Musk fanboy. Neither of those statements are accurate. I’m writing that up front because I want you to know that this week’s topic is near and dear to my heart. And I’m a little biased because I love my Tesla. It’s a great car.
Also I should admit up front that I am blatantly stealing the Austin Business Journal’s topic idea for this week. So you should definitely read this article. Because its really good and goes more in depth than I can in 700 (or so) words.
You likely do not need me to tell you this, but electric car sales are increasing. Significantly. And with that comes the need for charging stations. But what does that mean for multifamily owners, operators, and developers? Well that’s what we are going to talk about this week.
Electric Car Sales are Growing
All you have to do is drive around town and you can see that electric car sales are increasing significantly. For many reasons, they have become very popular. And surely their popularity will continue to grow.
In the third quarter of 2022, there were over 200,000 electric vehicles sold in the United States. For the year, they represent approximately a 6% market share of total cars sold in the US. Tesla still owns a large percentage of that market share. But almost all the auto companies – including BMW, GM, Ford, etc. – offer electric cars now and have plans to increase their sales.
Some estimates are that approximately 30% of all vehicles sold in 2030 will be electric. And it will continue to grow from there – up to potentially hitting the net zero gas emissions projections by 2050.
Electric Cars and Apartment Living
For us in the commercial real estate world, an obvious question presented by this growth is what to do with our multifamily projects. If residents are going to be driving electric cars, they are going to need some place to charge them. There is already a high demand for charging stations around the state. And its only going to increase as more electric cars are sold.
So what is an apartment community to do? There is little doubt that the owners, managers, and developers are going to have to install charging stations. As I was doing my research for this article, I found lots of websites that would tell a potential renter which apartment communities have charging stations. It is, therefore, already a marketing advantage for a community. And will obviously become moreso as sales increase.
What I cannot answer right now is how many charging stations does a community need? I guess that is mostly a business decision. But it makes a lot of sense to be planning for the future. While a community may only need one or two now, in the near future, it may need a lot more than that.
It also depends on what type of charging the community installs. I am not an expert in this area, but there are different types of charging stations:
- Level 1 charging stations are the least powerful and generally take up to 43 hours to get a 249 mile charge.
- Level 2 stations are more powerful and generally take up to 11 hours to get a full 249 mile charge.
- Level 3 stations are the most powerful and generally take up to 1 hour for that full charge.
These charging stations undoubtedly can be expensive. But the Inflation Reduction Act includes a federal tax credit of up to 30% of the cost of installing commercial EV equipment for up to $100,000 per project. That can help defray the cost. And help install charging stations that will likely become necessary components – and marketing hooks – of any new multifamily community.