EV charging starts at the dealership: How auto dealers can implement EV charging
From Ford’s plans to invest $50 billion in electric vehicles (EVs) through 2026 to GM’s aspirations to sell one million EVs by 2025, manufacturers are making it clear that they’re going all in on an electric future. However, for these EV goals to become a reality, EV charging infrastructure must expand rapidly. Auto industry leaders are calling on dealerships to play their part in building out EV charging infrastructure.
Several major manufacturers, such as Ford and Stellantis, have already released regulations that require dealers to install a specific number and type of EV chargers on-premises. If they don’t, they will be unable to sell EVs, which will increasingly make up a larger percentage of vehicles offered. Other manufacturers will likely follow suit with similar requirements.
Dealers face several challenges when installing EV chargers
From skyrocketing inflation to supply chain bottlenecks, car dealers had numerous obstacles to overcome in the past few years. As they face their newest challenge, installing EV charging, they have several hurdles to get past.
- Multiple brands, multiple regulations
It’s common for dealers to own multiple dealerships with different brands. Because each of these brands has or will have its own regulations, navigating the requirements becomes complicated. Dealers cannot replicate one project across all their locations. In some cases, they might need to install chargers from different companies depending on the dealership, as brands like Mitsubishi have signed exclusive agreements with EV charger manufacturers. Therefore, dealers must pay close attention to the differing regulations as their ability to sell EVs is on the line.
- Chargers aren’t cheap
Ford and Stellantis require dealers to install Level 3 DC Fast chargers, which cost around $150,000. And that doesn’t factor in electrical grid upgrades or labor. Ford estimates that its lower-tier certification, Model E, which includes one Level 3 charger, will cost dealers approximately $500,000. And Model E-certified dealerships can only sell 25 EVs annually. For its upper-tier certification, Model E Elite, dealers must install and maintain two public Level 3 chargers. Ford estimates complying with this certification will cost dealers between $1 million and $1.2 million.
- Demand outpaces supply for chargers, causing long lead times
As EVs continue to skyrocket in popularity, EV charger manufacturers are struggling to keep up. As a result, the gap between supply and demand for EV chargers is significant, leading to long lead times on chargers for customers. With manufacturers setting deadlines for compliance with charging regulations, the clock is ticking, and dealers cannot afford to wait.
- New chargers? New electrical grids
When dealerships were built, their electrical grids weren’t designed to power EV chargers, especially not DC Fast chargers, which require 480-volt, direct current. Therefore, dealerships implementing EV charging will most likely need to either bring in new power transformers or run a new 480-volt line. Both of these options require expertise, time, and money.
Best practices for auto dealers installing EV chargers
- Don’t take a one size fits all approach
If you own multiple dealerships, it’s tempting to create a template for an EV charging project and apply it across each location. However, this would be a mistake. Not only do different brands have different regulations for the number, type, and brand of chargers, but each state, and even each county, might offer different incentives for installing EV chargers. Regulations and rebates have the power to make or break an EV charging project, so dealers need to create a custom plan for each location that takes into consideration the unique opportunities and challenges of a given dealership.
- When it comes to subcontractors, bundle and save
EV charging projects require diverse skill sets that dealers won’t have in-house. But the breadth of the challenges can lead to dealers paying several subcontractors and costs escalating quickly. When outsourcing, it’s best to look for a partner that can take on the full scope of the project, from selecting and buying chargers to navigating regulations and rebates to installing and maintaining chargers. This will help keep costs in check, and your accountants will thank you.
- The best time to start was yesterday; the second-best time is today
From long lead times on chargers to bureaucratic permitting processes, adopting EV charging is not an overnight process. Furthermore, many rebates have a finite budget and operate on a first-come, first-served basis. Therefore, it’s critical to start quickly to meet deadlines from brands and take advantage of funding before it runs out.
Plugging into the EV future
While the challenges of implementing EV charging are significant, the opportunity of plugging into the EV future is far greater. According to one recent study, by 2027, the EV market will reach $139.10 billion. Dealers cannot afford to cut themselves off from the industry’s future because of the short-term challenges of installing EV chargers. By following a proven strategy and seeking outside experts when needed, dealers can adopt EV charging, future-proof their business, and ride the EV wave sweeping across the world.