Investors for EV charging startups don’t just rely on innovative ideas alone; they necessitate strategic partnerships and financial backing from various entities, from venture capital firms keen on innovation to angel investors, corporate giants diversifying portfolios, and governmental bodies promoting clean transportation.
This guide sheds light on securing crucial investments and partnerships vital for the success of EV charging startups. It navigates the landscape of investment options, opening doors to opportunities that drive us toward a sustainable, electrified future.
- Why Should You Invest in the EV Charging Industry?
- How to Invest in EV Charging Stations
- List of Potential Investors for EV Charging Startups
- Final Thoughts
Why Should You Invest in the EV Charging Industry?
The past decade witnessed a remarkable surge in EV usage due to advancements in battery technology, government incentives, and heightened consumer environmental consciousness.
As per the International Energy Agency (IEA), the global count of electric vehicles exceeded 10 million in 2020, a figure projected to soar in the coming years. The EV revolution poses a specific challenge: the necessity for a robust and widespread charging infrastructure.
The demand for EV charging stations continues to rise. Many public charging stations are owned or managed by private charging network businesses. Entrepreneurs and companies invest in these stations, recognizing the potential for revenue generation.
Here are some solid reasons why you should invest in the EV charging industry:
Growing Demand for EV
The growing demand for EVs continues to surge as more consumers and governments embrace the shift toward electric mobility. This demand for EV charging infrastructure is escalating rapidly due to several compelling reasons, spurring investors to capitalize on the various opportunities presented by the EV charging industry.
Rebates and Incentives are Offered by Governments
Governments in the United States actively promote the adoption of electric vehicles by offering rebates and incentives. These initiatives, which range from tax credits to purchase subsidies, significantly slash the initial cost of EVs, making them more enticing for consumers.
Furthermore, the government extends its support to the EV charging industry by providing grants and subsidies for the installation of charging infrastructure.
Boost Your Existing Business with EV Charging Stations
A barrier preventing many people from switching to EVs is the lack of accessible charging stations. Entrepreneurs and business owners have the option to install chargers at their current locations, providing more choices for EV drivers.
This move is particularly beneficial for businesses where consumers spend at least half an hour, such as restaurants, bars, clubs, entertainment venues, shopping malls, retail centers, hair and nail salons, fitness gyms, and workspaces. Therefore, incorporating an electric vehicle charging station at a location can bolster business prospects and income.
EV Station Installation Requirements are Straightforward
Installing an EV charging station requires a few straightforward requirements. The primary need is a well-placed location with a reliable source of electrical power.
To start, check your state’s utility commission for any regulations concerning the EV charging business.
Additionally, there might be minor local legal obligations, such as obtaining permission from your town’s authorities. However, the overall process is well-documented and uncomplicated.
High Return on Investment
The EV charging station industry holds promise for profitability. While the earnings can vary based on factors like location and size, typically, an owner of an EV charging station can expect a profit margin ranging from 25% to 50%.
The ability to generate returns on your investment depends on factors such as the number of EVs in your area, the location’s quality, the presence and placement of competitors, and other relevant elements.
Opportunities to Own Your Charging Stations
Begin exploring investment opportunities in EV charging stations by considering companies already operating in this sector. Major organizations like ChargePoint are constantly seeking new locations to set up charging stations and may engage in partnerships to utilize your available land.
Next, target public places such as airports, hospitals, and shopping malls that presently lack EV charging stations. There’s an increasing demand for these stations in high-traffic public areas like these.
Lastly, inquire with business owners, local governments, and various groups to find out if they’re seeking investors or interested in public-private partnerships to incorporate EV charging stations into their facilities.
How to Invest in EV Charging Stations
Investors seeking financial gains and a positive impact on sustainable transportation find the rapidly growing electric vehicle (EV) charging industry alluring.
Here are three impactful avenues to consider when investing in EV charging stations:
Invest in Charging Infrastructure Providers
Direct your investment towards established firms specializing in constructing and operating EV charging stations. Leaders like Blink Charging, ChargePoint, and EVgo are leading the charge in revolutionizing charging networks.
Investing in these companies can generate consistent income through charging fees while tapping into the rising demand for accessible and convenient charging solutions.
Establish Your Own Charging Network
Take the initiative as an investor-operator by establishing your EV charging network. This approach requires capital for station setup but holds significant revenue potential through charging fees.
Providing reliable and strategically positioned charging stations caters to EV drivers’ needs and capitalizes on the expanding EV market. Government incentives might further enhance the financial feasibility of your venture.
Invest in EV Charging Industry Stocks
Engage in the stock market by investing in firms designing and manufacturing EV charging stations. As electric vehicles become more prevalent, the demand for charging infrastructure will skyrocket, potentially increasing the stock value of these companies.
By investing in their growth, you indirectly support the EV charging industry while potentially reaping benefits from stock price appreciation.
Some of the best EV charging stocks to buy are:
- Blink Charging Co. (NASDAQ:BLNK)
- ChargePoint Holdings Inc. (NYSE:CHPT)
- EVgo Inc. (NASDAQ:EVGO)
- Lucid Group Inc. (NASDAQ:LCID)
- ABB Ltd. (NYSE:ABB)
- Allego N.V. (NYSE:ALLG)
- XPeng Inc. (NYSE:XPEV)
- Tesla Inc. (NASDAQ:TSLA)
List of Potential Investors for EV Charging Startups
If you are on the lookout for potential investors, you should definitely check out this list of potential investors for EV charging startups:
Venture Capital Firms
Venture capital firms such as Kleiner Perkins, Plug and Play Tech Center, and Energy Impact Partners significantly influence the direction of EV charging startups. Their investments not only provide essential funding but also offer startups access to industry insights, networks, and strategic guidance.
Corporate venture capital investments in clean energy technology reached $14 billion in 2020.
Kleiner Perkins, a well-known VC firm based in Silicon Valley, has a history of investing in groundbreaking technologies. Their successful backing of companies like Amazon, Google, and Twitter showcases their ability to spot innovative trends.
Regarding EV charging startups, Kleiner Perkins provides both financial resources and strategic advice. Their support aids startups in navigating challenges, expanding their operations, and establishing themselves as major players in the dynamic EV charging field.
Operating as an innovation platform, Plug and Play Tech Center connects startups with corporations and investors across various industries, including mobility and energy. Their programs and resources foster collaboration and drive growth.
In the domain of EV charging, Plug and Play Tech Center offers startups access to a network of industry leaders, potential partners, and mentorship. This environment accelerates the development of innovative solutions and boosts startups’ visibility in the market.
Energy Impact Partners (EIP) is a venture capital firm focused on investing in companies reshaping energy and sustainability landscapes. Their interest in EV charging startups stems from charging infrastructure’s crucial role in advancing electric vehicle adoption.
EIP’s expertise in the energy sector and dedication to sustainable solutions position them as potential catalysts for EV charging startups. Their investments can accelerate advanced charging technology development and promote cleaner transportation.
StartEngine is a leading equity crowdfunding platform in the United States. They collaborate closely with entrepreneurs to craft compelling ads that attract EV investors.
StartEngine provides a design team to assist EV charging businesses in securing investors, along with a manager account and drag-and-drop tools for entrepreneurs.
Since all businesses must be headquartered in the United States, this presents an excellent opportunity to identify an American firm for investment.
Moreover, there are no listing fees, making it a more appealing platform for entrepreneurs as they don’t have to incur significant costs.
Global crowdfunding transaction value is projected to reach approximately $24.33 billion by 2023.
OurCrowd, an equity-based platform, collaborates with global entrepreneurs to invest in EV charging companies. They present a straightforward five-step methodology for entrepreneurs to follow:
First, entrepreneurs must satisfy the urgent criteria to be vetted and accepted by the firm.
Next, companies meet with OurCrowd to further outline goals and strategies as part of the second phase.
Step three involves OurCrowd conducting due diligence and reviewing the EV organization to verify all claims.
In step four, EV startups are presented to the investment committee, which makes the ultimate choice. Step five allows investors to begin investing in businesses and forming partnerships.
Private equity firms raised over $347 billion in renewable energy-focused funds between 2010 and 2020.
FundersClub exclusively invests in accepted EV charging businesses, although only 2% are accepted each year.
They select firms with significant upside and growth potential. EV charging startups agree to share a portion of their income from any investment in exchange for using their platform.
Acceptance grants firms access to the founder community for engagement in online and in-person events.
FundersClub also offers private team startups that have previous experience in launching and selling a firm.
Indiegogo, established in 2007, initially served as a tool for gathering funds for charitable purposes but has evolved into a platform for funding various initiatives, including EV charging businesses.
Startups can establish campaigns on Indiegogo and receive cash from supporters in exchange for rewards. More contributions result in more resources provided by Indiegogo for campaign promotion.
EV charging startups can be creative with their rewards, offering early product access, discounts, or personalized experiences.
Investor Hunt focuses on connecting EV charging businesses with resources and offers a blog with startup materials and a forum for community support.
Before acceptance, EV charging startups can explore the extensive database to find suitable investors for their firm.
Republic, owned by AngelList, allows ordinary individuals to invest as little as $50 in an EV charging startup, reducing investment risk.
It’s open to the general public and not limited to angel investors or venture capitalists. When a startup raises $3,000, Republic receives a percentage of the funds raised.
Wefunder, a seasoned online investment platform, offers convertible notes, allowing deposited money to be converted into stock later on.
It’s a great choice for EV charging firms not ready to relinquish equity but in need of finance. While there are no upfront costs, Wefunder takes a 7.5% cut upon completing a contract with an investor.
AngelList, a prominent online investment platform with a global presence, allows investors to search for EV charging companies, sort them by geography or sector, and read reviews from other investors.
EV charging startups can create an AngelList profile and begin seeking funds upon authorization.
ChargePoint secured $2.5 million in angel funding during its early stages.
As we conclude this exploration of investment possibilities, keep in mind that the success of EV charging startups surpasses the mere existence of charging stations. It involves enabling mobility, improving access, and lessening our carbon footprint.
It’s about driving innovation that transforms not just transportation but our entire lifestyle. Embrace the possibilities, foster partnerships, and nurture investments that will energize our future.
Collectively, we have the authority to shape a world where sustainable transportation isn’t merely an aspiration but a tangible reality. This transformation is driven by the commitment of forward-thinking startups and the steadfast backing of their diverse group of investors.
Besides, if you need any help managing and monetizing your EV charging infrastructure, 6senseEV is here to help you. Contact us here to speak to an expert about your EV charging business.
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