A study from MIT researchers has revealed that electric vehicle (EV) charging stations provide significant economic benefits to nearby businesses, potentially offering a new model for funding charging infrastructure expansion.

The comprehensive California-based study analyzed data from over 4,000 charging stations and 140,000 businesses, using anonymized credit and debit card transactions to track spending patterns. Led by Dr. Yunhan Zheng of the Singapore-MIT Alliance for Research and Technology (SMART), the research demonstrated that installing an EV charging station increased annual spending at nearby businesses by 1.4% in 2019 and 0.8% from January 2021 to June 2023.

In concrete terms, businesses saw average revenue increases of $1,500 in 2019 and around $400 during the 2021 to 2023 period. The impact was even more pronounced for businesses within 100 meters (328 feet) of charging stations, where revenue jumped by around 3%.

“These increases are equal to a significant chunk of the cost of installing an EV charger,” notes Dr. Zheng, who believes the findings could lead to more diverse income streams for charging providers and site hosts.

Particularly noteworthy was the study’s finding that economic benefits were not limited to affluent areas. The installation of charging stations stimulated consumer spending in underprivileged communities as well, suggesting their potential as catalysts for economic development in disadvantaged neighborhoods.

The slight decline in revenue impact between 2019 and 2021-2023 may be attributed to several factors, including a saturation of EV chargers and general spending decreases following the COVID-19 pandemic. However, even with this decline, the annual impact of a charging station on surrounding businesses would cover around 11.2% of the average infrastructure and installation costs.

Moreover, the research team emphasizes that more studies are needed to understand how these findings might apply beyond California and in other countries. However, their work provides valuable insights for urban planners, businesses, and policymakers working to expand EV infrastructure while promoting economic development.

The research points to potential new business models for charging station development. Drawing parallels to traditional gas station convenience stores, Dr. Zheng suggested that multiple businesses could share installation costs to benefit from increased customer spending. This model is already being tested by some companies – in 2022, Starbucks and Volvo partnered with ChargePoint to install chargers at around 15 stores across the western United States (U.S.).

As EV adoption continues to grow – with global sales projected to reach 17 million units by the end of 2024 – these findings could help accelerate the development of charging infrastructure. While the U.S. government has committed $7.5 billion through the Infrastructure Investment and Jobs Act to build a national charging network, significant private investment will be needed to create a comprehensive charging infrastructure.

Read More: U.S. EV Charging Market Set To Nearly Double By 2029 Amid Rising EV Demand

As a result, these findings underscore the potential of EV charging stations to drive local economic growth, particularly for businesses close to chargers, while highlighting new opportunities for public-private partnerships in infrastructure development.

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