Retail players: Equip buildings with electric charging stations

These regulatory changes, combined with strong growth in the market for electric and hybrid vehicles, and an increase in users’ recharging needs, invite retail actors to consider the topic of installing recharging stations in their car parks. The concerned actors, including retailers, must reflect on their strategy in order to take advantage of the various commercial opportunities which may result from these regulatory changes.

After analyzing these new regulatory obligations which apply to tertiary and commercial buildings [i], this article offers retail players a reflection on the overall strategy that needs to be developed and implemented around the charging service, as well as the opportunities that present themselves.

Concerning the EVCI installation, the French Mobility Orientation law distinguishes between the concepts of pre-equipment (easing the provision of electricity for future charging points) and equipment (actual EVCI installations). This distinction allows graduating companies' obligations and to anticipate future needs while enabling companies to meet them progressively. Thus the pre-equipment concept enables the global charging offer to keep up with the pace in which the number of electric vehicles in France are increasing.

Since March 2021, the pre-equipment obligations for new and renovated buildings are more restrictive, and new obligations to equip charging stations have been added. From January 2025, existing buildings will, in turn, be subject to charging stations equipment obligations. The illustration below shows the various obligations gradually applying to new and existing buildings.

Charging station installation projects in existing car parks can take several months to be completed, especially in the case of large parking lots. All actors operating commercial buildings must therefore take action today to ensure their compliance with the French Mobility Orientation law.

Furthermore, many national and regional subsidy programs have been created to support and encourage actors who are now involved in such projects. The ADVENIR program [iv], for which the subsidy amounts are particularly attractive for the year 2021, allows owners of private non-residential car parks to benefit from financial aid of up to € 9,000 per charging point (for the installation of EVCI open to the public with a power of 50 kW DC).

In order to avoid penalizing small and medium-sized companies [v], these companies are exempt from the new obligations [vi]. For the other players, some situations may lead to exemptions so as to not impose projects that are too costly, for example car parks below a certain size, the number of EVCI works above a certain threshold, parking not included in the scope of renovations, etc. [vii]

A need for charging stations, meaning new business opportunities

Installing charging stations is a matter of regulatory obligation, but also responds to growing demand from the users of commercial buildings: mainly customers, and to a lesser extent employees. For shopping centers, cinemas, or mass retail, the installation of terminals offers a fully-fledged charging service, which can complement an existing range of services or create opportunities for additional services.  By integrating the installation of charging stations into a more global strategy, companies can seize new business opportunities according to their objectives:

To guarantee the optimization of investments, and maximize their profitability, companies must first determine the objectives they want to achieve with an electric vehicle recharging service, in order to build a recharging solution in line with their strategy.

The first step is to understand the regulatory obligations, but also to quantify and qualify the demand for recharging over time, for different users. Unlike filling a vehicle with petrol, recharging an electric vehicle does not require the presence of the user, and vehicle rotations are less frequent. Thus, fast 50 kW charging stations will allow the vehicle to cover nearly 150 km of range in 30 minutes. On a 7.4 kW terminal, the same charging time will allow the vehicle to cover a  25 km range. The choice of terminals, or the mix of terminals to be installed, will therefore depend on the objective: to provide a fast-charging service to users who will come specifically for that (“service station” model), or provide regular customers with an additional service that they can take advantage of while they are on the premises. In both cases, the recharging time can be used to provide the user with nearby services.

The initial investment and the economic benefits will vary in importance depending on:

• Chosen terminals: fast or average recharging speed, communicating about the charging point or not, coupling of charging points with solar parking canopies, etc;
• Infrastructure financing models: acquisition of terminals by the company, rental of terminals, or a third-party investor model;
• The desired level of steering/control of the charging points: limitation of the overall power drawn by all the terminals so as not to exceed a certain threshold, or finer steering according to the load levels of the connected vehicle, the price of electricity, etc.

The company will then have to define the terms of the new charging service it offers, according to its objectives:

• The terms of access to the terminals: freely accessible terminals for all users (payment-for-user via a subscription), or premium access for certain customers in order to offer a VIP experience and improve customer retention.
• The monetization of the service: a free top-up to attract new customers or special offers to retain customers and increase their average basket price. For example, free charging if consuming on-site.
• Charging pricing: at the price of electricity (for an attractive service) or at a higher price (with the aim of making a margin on the charging service).

In order to make the recharging service more qualitative, companies will be able to offer their customers affinity services: information on the availability of terminals, remote reservation, and monitoring of recharging, etc. To go further, the use of data provided by the terminals (customer arrival time, remaining charge time, vehicle model, etc.) could also create opportunities for personalized services and improving the customer relationship. These include activity suggestions based on anticipated recharge time, targeted promotions based on arrival time, tailor-made suggestions by analyzing the customer's profile, etc. There are many opportunities that can be explored depending on the data collected and the activities of the company.

The strengthening of regulatory obligations is an opportunity for retail companies to integrate charging stations into their overall long-term strategy. Granting resources to the pursuit of this project and its implementation is essential to make it profitable. Sia Partners supports companies in these transformations.

Sources and Notes:

[i] Residential and mixed-use buildings are also subject to other equipment obligations, which are not detailed here.

[ii] Article L111-3-4 of the Construction Code. More information on the characteristics of the pre-equipment: http://www.avere-france.org/Site/Article/7article id = 7945 & from espace adherent = 0

[iii] Article L111-3-5 of the Construction Code

[iv] ADVENIR program: financing of private or public charging points by the EWCs, Advenir, 2020

[v] Companies which employ less than 250 people and whose annual turnover does not exceed 50 million euros or whose annual balance sheet total does not exceed 43 million euros (definition of the European Commission)

[vi] Article L111-3-6 of the Construction Code

[vii] Articles L111-3-4 and L111-3-5 of the Construction Code