ExxonMobil CEO Darren Woods’ recent prediction that 100% of new vehicles sold in 2040 will be electric likely sent two important messages to the real estate world.
One is that when the head of a giant petroleum company says electric vehicles are the future, then it seems the age of EVs has finally arrived. Secondly, it is time to get buildings ready for an influx of residents and tenants demanding charging stations.
Chris Vargas, senior vice president of business development for Chargie, a California-based installer of EV charging stations in multifamily and commercial buildings, said those takeaways are spot-on.
“About 70% of people right now see themselves buying an electric vehicle in the next two to three years, so property owners really need to think about how they’re going to meet the demand,” he said.
Vargas added that building owners should not take Woods’ 18-year timeline to mean they have close to two decades to prepare. In fact, it might actually be closer to a mere 18 months — that is, if they want to take advantage of generous incentives now available to support the cost of installing EV infrastructure.
The Biden administration designated nearly $5B to help develop the nation’s EV charging capabilities along important transportation corridors. This will enable EV drivers to make much longer trips without needing to worry about being stranded in areas that lack charging infrastructure.
However, most EV charging takes place where a driver lives, which suggests that charging stations will soon be a must-have amenity at multifamily properties. Fortunately for building owners, millions of dollars in incentives are available through power utilities to offset the expense.
With multifamily buildings expected to spend $2.5B to add charging capabilities, that is no small thing.
“Of the 17,000 chargers Chargie has installed on more than 1,000 properties, 90% have been completely paid for by rebates and incentives,” Vargas said. “Large properties can receive more than $200K worth of infrastructure without an investment. There definitely is an opportunity here for building owners.”
The catch? Vargas said the process of applying for and actually obtaining a rebate typically takes about 18 months. That means that the time to act is now.
“Thousands of applications have already been filed for these incentives,” he said. “You need to get in the queue now before demand really starts to take off in the next few years if you want to take advantage of these programs.”
Also, Vargas said, the current incentives won’t be around forever.
“I compare it to the Americans with Disabilities Act of 1990, when all those incentives were available to pay for ramps and railings,” he said. “Most of those incentives have since gone away.”
Vargas recommended that building owners check with their local utility to obtain a list of approved EV system vendors that have technical know-how but also understand how the incentive application process works. While property owners and managers might be tempted to tackle this on their own, they may not have the resources to navigate the process.
“There are a lot of requirements that go along with the rebate application process and it can be very daunting for somebody trying to do this for the first time,” Vargas said. “We’ve run into several multifamily owners who lost out on money because they just don’t have the experienced, full-time people to dedicate to the task.”
At the moment, incentive programs are most common in West Coast states. That is likely to change, he said, as EV infrastructure continues its explosive growth and more states try to encourage its adoption by building owners.
But Vargas emphasized that no matter how generous the incentives, consumer demand is likely to be the main driver behind multifamily buildings installing EV infrastructure. In recent years, the availability of EV chargers has become one of the top search criteria for apartment hunters, ahead even of price, he said.
Vargas said building owners across the country need to be thinking now about how they will meet their tenants’ expectations. If ExxonMobil’s forecast is correct, they won’t have a choice in the matter if they want to attract tenants in the future, particularly younger renters.
Already, Vargas said, some California tenants have moved out of apartment buildings that lacked EV charging, and it may not be long before residents in the Midwest or on the East Coast start to behave similarly.
“We recommend that at least 25% of the parking spaces for a multifamily building have EV charging stations,” he said. “That’s what we believe will be needed to meet the demand over the next few years, and of course, it doesn’t mean you’re not going to need more. We’ve even worked with 300-unit buildings that wanted to install 300 EV chargers for 100% coverage of residents.”
This article originally appeared on Bisnow.
