But only if we adapt!
From the death of parking due to self-driving Ubers to concerns over chauffeured teens that will never get a license, the parking and mobility industry has seen a recent spate of dubious predictions that have turned out to be overblown and overhyped. The notion that parking can and should be the gas station of the future is not one of them.
The Battery Electric Vehicle (BEV) market is in transition and the time is right for the parking and mobility industry to take advantage of that shift. But to ensure that that future becomes a reality, we must start planning and implementing now.
Why now?
While BEVs represented only 1.5% of the U.S. market in 2020, the number of new BEV registrations more than doubled during the first half of 2021—an increase of almost 118% in six months. While BEVs still only represent a small percentage of the market for new cars now, a revolution in car-buying is underway.
BEV’s are currently clustered in states like California, Texas, and Florida, where average incomes tend to be high and solar electricity popular. But that is changing fast, as car buyers are increasingly open to the new technology.
First, the market is influenced by regulatory changes. California will ban the sale of Internal Combustion Engine [ICE] vehicles in new cars starting in 2035, so car producers have no choice but to adapt to stay relevant in that large market. They will need to do so well before 2035 if they want to keep up with Tesla, which sold one million BEV’s in 2021 and has a market capitalization more than $1 trillion, more than Ford and GM combined.
Beyond that, several trends, happening concurrently, will boost EV sales. The cost of purchasing a BEV is coming down, single-charge driving range is increasing, and relative costs of ownership appear to drop as the price of gas increases (as it did, by almost 60%, in 2021).
Even if gas prices come down, BEV’s sales are not likely to decrease. Why? Because we are rapidly approaching a tipping point in terms of preference. The best example of this is the introduction of one electric truck: the Ford Lightning F-150.
The Lightning, which goes on sale this spring, is one of about 100 pure electric car models that will be introduced by the end of 2024. But, as the electric version of the pickup that belongs to the best-selling vehicle line of any kind in the US, it stands out from the pack as the vehicle that could help Ford compete with Tesla in terms of EV sales and, in doing so, tip the U.S. into an electric destiny.
This is because the F-150 Lightning is, well, cool, with plenty of features designed to appeal to the traditional pickup crowd. The driver can now fit two full sets of golf clubs or secure valuable tools in that front area that used to hold the costly, smelly, dirty, oil dripping ICE. Or if they want, they can fill the space with ice and chill beer. Yes, there is a drain plug built in. In a blackout, the electric F-150 can reverse the flow of electrons and power a house for up to three days or serve as a generator on a job site. Plus, it can rocket from zero to 60 in 4.5 seconds. If Ford can bring the BEV to the masses, it can slay the reputation that electric vehicles are only for the rich. And like a massive bolt of Lightning, the market will be rapidly and permanently changed.
So far, signs point to that happening. In December 2021, Ford had to close pre-orders after 200,000 reservations flooded in, overrunning production projections. They have since doubled the initial production run for 2022-23 to 400,000. In short, there is a better vehicle class quickly gaining popularity, with features that take driving to the next level. And if BEVs help save the planet, that is a nice little value add.
Leveraging the Disruption in the Market Place
But why is this disruption in the market parking’s opportunity? Won’t gas stations simply convert to charging stations?
Not necessarily. And even if they do, consumers won’t necessarily continue to use them—if they have a better alternative. Already, EV users are establishing new habits. The California Air Resources Board estimated that “upward of 85 percent of EV charging occurs at home.”
Given this willingness to change behavior, there is an opportunity for parking facilities to establish themselves as the go-to spot for EV charging, instead of gas stations.
Traditional gas stations, with their mini-marts, are designed around the needs associated with a quick stop for a five-minute gas refill. The EV charging experience, which takes a minimum of 20 minutes at the fastest current rates, would be better suited to a different environment.
Charging speed is a key factor in decisions around away-from-home EV charging. Currently, there are two primary types of chargers, each of which delivers a specific product: Level Two 240-volt chargers, which can recharge a vehicle in about eight hours, and Level Three DC Fast chargers, which can charge an EV from empty to full in just 20 to 40 minutes.
The Level Two chargers hit the parking industry’s sweet spot. They are ideal for people parking their cars for long periods, either all day while they are at work or, for city dwellers without access to a private driveway, overnight. These needs can be easily met by garages and parking lots spread across densely packed urban areas where people work and live.
Level 3 DC Fast chargers function more like traditional gas stations—but not exactly like them. They are primarily needed along major interstates, strategically placed between population centers. But because the charging time can be up to 40 minutes, consumers will look for options beyond an old-fashioned mini-mart, such as coffee shops and nice restaurants that offer a place to relax for up to an hour.
The network of fast chargers is rapidly growing. With $2 billion in funding from Volkswagen’s 2016 diesel emissions settlement, Electrify America is building out a national network of Level Three fast chargers. Soon this network, open to any BEV, will rival Tesla’s extensive but closed network of fast charging locations. Several other companies are also competing for market share.
The initial fast charge build-out has focused on strategically placing Level Three chargers at critical points between dense population centers. But there is also a secondary need for fast chargers dispersed within major population centers—and this too is an area where the parking industry can thrive.
The charging networks are actively looking for locations that will provide fast charging opportunities when a driver is shopping at the grocery store, eating dinner, hitting the gym, or running quick errands. A 30-minute quick charge costs more than an eight-hour charge, but convenience can make it worth the premium.
Plus, Audi, BMW, Lucid, and others are partnering with Electrify America to provide up to three years of free charging with the purchase of a new vehicle, making the fast charge option even more attractive.
So, the race is on to install branded fast-charging stations in high traffic locations next to businesses, restaurants, and services that attract customers for 20-60 minutes already well served by the parking industry. As BEV’s replace ICE’s as the propulsion of choice, demand for charging will skyrocket.
A Coordinated Strategy
To help meet the rising demand for charging options, the 2021 Infrastructure Bill includes a $5 billion investment in state-administered grants for deploying electric vehicle (EV) charging stations nationwide.
As an industry, we need to formulate a coordinated and comprehensive strategy to pursue the government funds offered and use them to establish the parking lot as the natural location to “refuel” your car when away from home or unable to charge at home.
As an industry, we can make the argument that street parking, already losing ground in the fight for the curb, is not the ideal solution for our looming electrification needs. It is more expensive to wire, install, and maintain chargers on the sidewalk, which makes it harder to recoup the investment into charging stations. It is also harder to determine the balance between electrified and non-electrified spots needed in a rapidly evolving market that also has to consider city planning and use needs including traffic, delivery trucks, TNC passenger zones, restaurant carry out pick up, and valet. Charging stations are rarely the highest and best use for valuable curb space.
Instead, we should focus on charging in off-street parking lots and garages. Here, stations can be clustered close to the electricity source and the number of stations can be easily expanded via simple conduit runs to adjoining spaces. In off-street locations, drivers can charge their vehicles free of concerns about traffic and pedestrians can traverse sidewalks without concern of tripping over charging cables or having their view of street traffic blocked by charging equipment.
The $5 billion in EV charging infrastructure is currently being divvied out to state governments—so now is the time for national parking and mobility institutions to work together with regional trade groups to collectively lobby the 50 states. This is not about a money grab; it is about ensuring that the professionals and industry best suited to answer this rapidly growing demand have a strong voice in guiding the policies being written right now.
How to Monetize
Earlier this year, I was shocked to learn that some garage owners were removing charging stations from their facilities. Across the street, in my garage, I am providing free EV charging and turning a profit for my efforts. Why would they give that up?
The answer, it turns out, was simple. These facilities installed stand-alone chargers in inconvenient locations and neglected to provide consumers with relevant information. You can’t wait for BEV drivers to enter your facility to let them know via a 12”x12” sign that you have charging available. You need to market them.
Traditional gas stations install giant signs on the side of the highway to let drivers know, from miles away, that they can refuel at the next exit—and those signs work. While roadside signs are effective for gas, reaching the BEV consumer requires a slightly different approach.
BEVs are loaded with technology and their drivers use smartphones. Given this, installing chargers that are connected to a specific charging network is critical. Drivers use these apps, many of which are integrated into vehicle entertainment systems, not just to find nearby charging but to locate specific stations that are available, learn about charging rates, and even to make reservations for a specific charger. Failure to be tied into a network means that drivers will not find you.
So first, research the charging networks and choose one that has a high adoption rate in your community.
These networks also offer flexibility, with online tools that make it easy to set and adjust pricing and publicize those rates. In one facility, I provide free charging for up to four hours or when the battery is full, then the price jumps to $5 an hour, to motivate drivers to move their vehicle. The network I work with advertises my spaces and brings in drivers I would not have otherwise been able to target. And if I need to make an adjustment in pricing structure, I can do that with a few clicks of a mouse.
Additionally, I have worked with one of the Level Three network providers on a ten-year agreement to rent dedicated parking spaces in my facilities, so they can sell Level Three fast charging. The agreement, like a cell tower lease, gives fast charge drivers an hour of free parking, with the expectation that some will move their cars to a traditional spot (paying standard rates).
What’s Next?
Of course, not all spots need to be electrified. Traditional vehicles are not going away completely—and even if they did, a full transition to EV would take more than a decade. Plus, not all drivers will need to charge every day. While the exact number of charging stations vs. traditional spaces is not yet clear, it is likely between 15% and 30% – still a significant number. Now, before that need explodes, is the time to start preparing.
So how do we begin? First, place charging stations in prominent easy to find locations. Work with established networks and think creatively about pricing models that make sense for you and your customers, and most importantly—remain flexible. As an industry, we need to remain nimble, learning as we go.
What EV Approach Is Right for Your Location?
Not all parking facilities are the same, so to maximize the opportunity for EV charging, owners and operators must consider the specifics of the location and type of community the facility serves.
Airports:
Airports are tricky, since most customers park for days, not hours. Level Two will charge the typical BEV in hours and once charged, the vehicle needs to be moved unless an oversupply of Level Two chargers are installed. In this scenario, Level One super slow charging may be a good option: significantly cheaper to install throughout the facility and more than adequate to meet demand. At the same time, airport valet services will do well to return BEV’s fully charged as this is the kind of perk that elicits repeat business and positive reviews.
Commercial Off-Street Operators:
Commercial parking facility operators must be prepared for a significant shift in approach; their job has gotten much more complex since the advent of PARC’s computer systems and incorporating EV charging, while beneficial, will add another layer of complexity.
- Monthly chargers: Level Two charging is appropriate for monthly chargers. This cost can be built into pricing models or kept separate, with a per kWh fee.
- Entertainment, sport and restaurant patrons: These parkers will be easily sated with Level Two charging. Fees can be wrapped into discount deals offered with the venues in exchange for marketing, offer free charging as a competitive advantage, or simply charge by the kWh.
- Fast casual restaurants, coffee shops and quick stop services: Parking facilities with enough of this sort of business should explore long-term deals with the networks that provide Level Three charging.
Hospitals:
Because few people make it in and out of a hospital in less than two hours, Level Two charging should suffice both for staff and visitors. But policies must consider that patients and doctors may not be able to stop what they are doing to move their vehicles when charging is complete. This calls for a higher number of chargers and lenient policies that allow workers to occupy charging spots for their entire shift.
For hospitals with spare capacity, an exploration of Level Three network providers could be worthwhile.
Universities:
- University Faculty and Staff: University professionals will need Level Two charging – and this population will not want to move their vehicles after charging is complete. Given this, a workable approach could involve extra Level Two chargers and the option of “extended stay” as a perk for more established professors (or those who are willing to pay for it).
- Students: Students fall into two categories. On-campus residents will need Level Two charging. Commuters will primarily be well-served by Level Two as well, but for students who drive long distances for a short stay, Level Three could be a valuable service (though forcing students to move 30 minutes into a 60-minute class is unlikely to work).
- Campus visitors: For most visitors, Level Two chargers will be appropriate, though the addition of Level Three chargers may prove to be an interesting way to attract non-university traffic to the campus (if this is desired).
Apartment Buildings:
Level Two charging is perfectly suited for housing and having the option will quickly become a determining factor for tenants who have BEVs. Free charging is a great inducement that can justify higher rents or be given as a sign-up perk.
Office Parks:
Level Two is sufficient for office parks and presents a competitive advantage. At one office I frequent, the CEO had to run an extension cord to his parking spot from inside the building. This was one of the contributing factors to her decision to move the office to a new location.
Shopping Centers & Strip Malls:
Retail charging needs vary depending on the type of retailer:
- Fast-casual restaurants: These establishments will see increased traffic with Level Three chargers and partnerships with popular EV networks are key. Drivers are more likely to choose the barista or burrito shop that allows them to take advantage of the free “fill-up” offered by their car manufacturer. Level 3 Chargers should also be in prime locations close to the front doors to make it easy for customers to move their vehicles when the time is up.
- Quick-stop shops: Grocery stores, garden centers, lumber yards, and other establishments that typically take 30 minutes or less will also benefit from having Level Three chargers. My local grocery chain has a few free Level Two charging stations, and while free is free, I only get a few miles of charge while I am inside, making it hardly worth the effort to plugin. But customers who can fill up while they shop will gladly pay for the convenience. As BEV adoption expands, more drivers who do not have home chargers will likely become regular customers of shopping centers that allow them to fill up while they run their errands.
- Longer-stay establishments: Movie theaters, sit-down restaurants, bars, and other venues that attract customers for longer stays will benefit from Level Two chargers. These do not need to be in prime locations but should not be hidden.
Hotels:
Hotel operators need to step up their game fast. Level Two charging is all that is required, but BEV drivers are already making choices based on the ability to plug in and charge overnight. If a hotel does not offer charging, the result is that the BEV driver must find a fast-charging station nearby and cool their heels while they refuel. Not having enough chargers causes the same problem.
Municipalities:
Cities and towns have the difficult job of figuring out how to ensure that BEV drivers have adequate charging opportunities. The issues are compounded by the fact that as BEV adoption expands, more residents who don’t have access to private driveways will need convenient options to recharge.
Low-income residents will also need subsidies to encourage both BEV adoption and recharging. While that subject is worthy of an article all its own, it is worth repeating that on-street charging is costly and rarely the ideal solution. Instead, municipalities should focus their efforts on creating policies to encourage the smart implementation of chargers in places where residents regularly visit, such as grocery stores.
At first glance, this approach appears to run counter to the trend of reducing or eliminating parking minimums for builders, but tax incentives for builders that provide off-street charging and subsidies to help cover the cost of the charging infrastructure will provide motivation. The long-term result will be healthy cities with the local markets determining the demand for BEV vehicle charging while creating more opportunities to better utilize the curb.
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