A recently released study explores the economic impact of electric vehicle charging stations on nearby businesses, analyzing data from over 4,000 electric vehicle charging stations and 140,000 business establishments in California.
Results show that installing one EVCS boosts annual spending at a nearby establishment by 1.4% ($1,478) in 2019 and 0.8% ($404) from January 2021 to June 2023, the study, “Effects of electric vehicle charging stations on the economic vitality of local businesses,” said.
The effect is more pronounced when a point of interest is within 100 meters of an electric vehicle charging station, with spending increasing by 2.7% in 2019 and 3.2% from January 2021 to June 2023 for that POI.
Public electric vehicle charging stations “tend to attract higher-income, exploratory visitors, and local residents,” the study noted. Moreover, they notably enhance businesses in underprivileged areas, “indicating the importance of expanding [electric vehicle charging stations] in such communities.”
Public electric vehicle charging stations “have the potential to exert a broader influence on local communities, particularly on the economic vitality of surrounding businesses.”
As EV drivers park their vehicles to recharge, “they often find themselves with spare time, creating an opportunity in activities such as shopping or dining in nearby establishments,” the study said. “In addition, since people often have flexibility where they shop, having charging facilities available can make businesses more attractive to potential customers.” This increased foot traffic “can breathe new life into local businesses and may offer a substantial boost to their customer base and revenue.”
Consequently, providing electric vehicle charging stations “offers business owners the potential to diversify their income streams.” Understanding the extent of this phenomenon is crucial for policymakers, electric vehicle charging station providers, and business owners “to harness the full potential of EV charging infrastructure and create sustainable and vibrant communities.”
The report quantifies the impact of installing electric vehicle charging stations on customer counts and spending in nearby businesses in California, “a vanguard in both EV adoption and charging infrastructure deployment in the United States.”
The analysis spans two distinct periods: 2019 and January 2021 to June 2023, aiming to mitigate the influence of the COVID-19 pandemic and anomalous electric vehicle charging station counts during data integration in 2020.
To assess the impact of electric vehicle charging station installations on local businesses, the study’s authors implemented an identification strategy that leverages spatiotemporal variations in customer counts and spending at points of interest surrounding these stations, enabling the establishment of causal relationships.
The analysis incorporates three categories of POIs: (1) accommodation and food services; (2) retail trade; (3) arts, entertainment, and recreation.
The study’s findings “consistently reveal significantly positive effects” of newly installed electric vehicle charging station installations on customer count and spending at surrounding POIs across all scenarios.
Specifically, the introduction of an additional charging port resulted in a 0.21% increase in customer count and a 0.25% increase in spending in 2019.
In the subsequent period spanning 2021–2023, although the effects are somewhat diminished, they remain statistically significant, yielding a 0.14% increase in customer count and a 0.16% increase in spending.
“The moderation in magnitude during this period might be attributed to factors such as constraints on customer buying power influenced by the COVID-19 pandemic, as well as variations in the utilization rate of public EV chargers over time,” the study pointed out.
The study’s authors said that it is noteworthy that when considering the average number of ports in a single electric vehicle charging station installation, which was 5.4 in 2019 and 5.0 in 2021–2023, “our findings indicate a more substantial impact.
Specifically, the addition of a single EV charging station leads to a 1.4% increase in spending in 2019 and a 0.8% increase in spending in 2021–2023.
“While these effects may seem minor, they carry substantial importance given the context of low EV adoption rates (2.61% for Battery Electric Vehicles and 1.15% for Plug-in Hybrid Electric Vehicles in California by the end of 2022) and the typically low utilization of [electric vehicle charging station installation] (often averaging fewer than one session per port per day in the U.S.).”
Within underprivileged regions, the effects persist and maintain statistical significance, the study said.
In 2019, an additional charging port led to a 0.17% rise in customer count and a 0.29% increase in spending. Between 2021 and 2023, the effects, although relatively smaller, remain notable, resulting in a 0.08% increase in customer count and a 0.09% increase in spending.
The report’s authors are:
- Yunhan Zheng (Department of Civil and Environmental Engineering, Massachusetts Institute of Technology, Cambridge, MA, USA; Singapore-MIT Alliance for Research and Technology Centre (SMART), Singapore, Singapore);
- David R. Keith (Melbourne Business School, The University of Melbourne, Carlton, VIC, Australia)
- Shenhao Wang (Department of Urban and Regional Planning, University of Florida, Gainesville, FL)
- Mi Diao (College of Architecture and Urban Planning, Tongji University, Shanghai, China)
- Jinhua Zhao (Department of Urban Studies and Planning, Massachusetts Institute of Technology, Cambridge, MA)
