The Evolving Landscape of EV Charging in Commercial Real Estate

The commercial real estate (CRE) industry has long viewed electric vehicle (EV) charging stations as a valuable amenity, providing convenience for tenants and visitors while aligning with sustainability initiatives. However, recent shifts in EV market trends suggest that CRE developers and investors should reevaluate their approach to installing charging infrastructure. While EV adoption continues to rise, the pace has slowed, prompting a reassessment of demand and infrastructure needs.

A Market at a Crossroads

EV adoption has been growing steadily, but market complexities have introduced new challenges. In 2023, GM reduced its EV production goals, citing slower-than-expected growth. Despite this, the company has continued to invest in EV development, expecting to produce and sell around 200,000 EVs in 2024. Similarly, other automakers like Ford and Tesla have experienced fluctuating market share, with Tesla’s U.S. dominance declining from 58% in Q4 2022 to 44% in Q4 2024.

Charging infrastructure is also expanding, with the U.S. Energy Information Administration reporting a 7.4% year-over-year increase in charging locations, reaching 70,841 nationwide in November 2024. However, determining the appropriate number and placement of chargers remains a key question for CRE stakeholders. Moreover, the rise of self-driving EV taxis could concentrate charging demand in certain areas, reducing the need for chargers at multifamily and office properties.

The Case for EV Charging in CRE

Despite market fluctuations, EV adoption continues to progress, making charging infrastructure a strategic investment for property owners. A NAIOP webinar highlighted the benefits of installing EV chargers, including tenant attraction and retention, improved environmental scores, and new revenue streams. Additionally, more affordable EV options are entering the market, with at least 10 models now available for under $40,000. This affordability, coupled with automakers’ long-term commitment to EVs, is expected to drive increased adoption.

Understanding Charging Needs

Successful EV charging implementation requires a tailored approach based on specific use cases. Key considerations include:

• Vehicle Types & Users: Identifying whether chargers will serve residents, employees, or the general public.
• Charging Speed: Level 1 chargers offer slow overnight charging, Level 2 chargers take 8-13 hours, and Level 3 DC fast chargers provide a full charge in about 20 minutes.
• Dwell Time: A hotel parking lot may only need Level 2 chargers, while retail centers might benefit from fast-charging options for shoppers with limited time.
• Smart Features: Payment capabilities, data collection for sustainability tracking, and network connectivity enhance functionality and revenue potential.

Site & Business Considerations

Beyond user needs, site logistics play a crucial role in EV charger placement. Property owners must assess electrical capacity, accessibility, flood risks, and visibility. In terms of business models, developers can either lease space to charging network operators—who handle installation and maintenance—or invest in their own infrastructure, allowing greater control over pricing and customer engagement.

Funding & Incentives

Federal and state programs provide significant financial support for EV infrastructure. The Infrastructure Investment and Jobs Act includes $5 billion for a national fast-charging network and $2.5 billion in grants for local infrastructure projects. Developers can leverage these funds to offset installation costs and enhance project viability.

The Road Ahead

While EV adoption trends have shifted, investing in charging infrastructure remains a smart long-term strategy for CRE stakeholders. As sustainability goals become increasingly important for tenants and investors, properties equipped with EV chargers stand out in a competitive market. By carefully assessing demand, selecting the right business model, and utilizing available incentives, property owners can position themselves for success in the evolving EV landscape.