MHN Interview: Pushing Electric Vehicles Forward through Multifamily Partnerships

While President Obama has called for 1 million electric vehicles (EVs) on the road by 2015, a study by Indiana University, “Plug-In Electric Vehicles: A Practical Plan for Progress,” indicates that this goal is unlikely to be met since consumer demand is not yet robust enough. This may be a case of which comes first, points out Car Charging Group CEO Michael Farkas, as people need to see the infrastructure (charging stations) in place before they purchase electric vehicles. Because the majority of electric vehicle charging will be done at home—and with so many Americans living in urban areas without access to private garages— some apartment developers are beginning to look into installing car charging stations in their communities.

Miami-based Car Charging Group installs electric car charging stations—including installation and servicing of the equipment—at no cost to the business/property owner, providing property owners with a share of the car charging revenues. The company has installed charging stations at several apartment communities throughout the nation.

Farkas talks to MHN Managing Editor Erika Schnitzer about the trend of electric vehicles, the difficulties in implementing charging stations, and how multifamily owners and operators can help move the trend forward.

MHN: What does your company do?

Farkas: We are one of the pioneers in this space in regards to being a pure play EV charging services company. We are technology-agnostic; we are not tied to any specific manufacturer. We are providing a service at the cheapest cost to the EV owner at the fastest charging time possible. Our model is very simple: we align ourselves with institutional property owners. … We own the equipment; we install it, maintain it, insure it, service it. When the technology shifts, as it did with faster charging times, we then upgrade those units as well. As [more] electric vehicles are sold, we add additional units to those locations as the need arises.

MHN: What is the main difficulty of developing a nationwide network of charging station? How quickly do you think it will take this trend to truly catch on?

Farkas: The biggest obstacle for the nationwide implementation of EVs is the lack of deregulation of the sale of electricity. … Most people say it’s the cost of the car. In very short order, the cost of the car will be on par with its internal combustion engine counterpart, and maybe even cheaper ultimately, so that issue that people come up with of it being the biggest obstacle, that’s not a realistic obstacle.

Range anxiety, which is people fearing that their car is going to run out of electricity and not be able to go further, I believe is also not valid anymore. You have a Tesla that’s coming out in less than a year that has the ability to go over 300 miles on a single charge—that’s more of a range than most cars get when they are filled up with gas. In addition to that, the Chevy Volt and some other cars have range extenders, which means there is a small engine that can power the battery packs and keep the cars charged as they’re driving.

The obstacle is when you don’t have the ability to fairly charge people for electricity across the nation. People not only across the nation, but people literally at the same location get charged different prices for their fueling. In most states today you cannot charge per kilowatt-hour for the filling up of an electric car.  … What that means is, if the car charges twice as fast as the next, if you’re charging per hour, the person charging twice as slow is paying twice as much for the fuel. … If we can’t charge for that kilowatt across the nation it’s not a fair charging system; it’s not a fair billing methodology and, in turn, if people feel they are getting the raw end they are going to stick with internal combustion parts.

What I believe we need to do across the nation is follow California and the state of Washington. California … decided they will not regulate the sale of electricity through an EV station so what that means is I can charge based upon a kilowatt-hour. Washington said they won’t regulate the sale of electricity through EV charging stations. That’s two [states]; we have a lot [further] to go. There are states that aren’t even deregulated in their energy. We need the federal government to push through some mechanism, maybe through their highway funding grants, to push states to [de]regulation on the sale of electricity through EV charging stations. If that takes place, [the trend] will take off nationwide.

MHN: What kind of interest are you seeing from multifamily owners and operators?

Farkas: The multifamily residential market is probably our largest market, and the reason why I say this is most charging will be done at home. Our business today is not really the single-family home market, but the multifamily home market is a massive market for us. We are looking to expand heavily into the market. It’s a necessity.

Ninety-four percent of the time, [the car is] lying dormant. That is the perfect time for these cars to charge. In major urban areas, most of the charging is going to be done in multifamily residential properties.

If every single multifamily residential property owner and management company said they would put [a charging station] in each location, it could be the biggest impact to this industry, more so than anything else—more so than the government providing grants. The charging is going to be done at home, and most people live in urban areas where these cars are going to be sold. They don’t have their own garages; they live in multifamily residential properties. They are all going to end up having to use multifamily residential properties for most of the charging in these urban areas. The guys in the industry are an instrumental piece to getting this industry to expand and get us off being dependent on fossil fuels.

It’s like the chicken and the egg. People are scared to buy electric cars if there is no infrastructure in place for them to charge their cars. When they see charging stations, they are more inclined to buy these cars. I believe that every single multifamily development should have at least one charging station in their location today.

MHN: How long does an installation take, and what is the ROI?

Farkas: It depends on location, because certain times there is no building permit history. It may take a week or two to get permitting but the installation itself, once the site survey is done and everything is finalized, takes a couple of days. Again, it depends on location and what needs to be done. It could take as short as a day or as long as a week for an install. It depends on the type of work that’s necessary. Also, installs could cost $500-$1,000 if it’s right near the electrical room and all you have to do is pop in an extra circuit breaker and run some wire … or you could have an installation that costs $15,000.

Right now the return on investment really depends on what the installation costs will be. Internally, we evaluate it based upon location, based upon the anticipated revenue model, and then we figure out our split because certain multifamily residential projects have a self-park component to them and some of them have a valet parking component; there’s a big difference as to the revenues that you can have in the two models. In a valet model, you could have someone moving the car 24 hours a day so those charging stations will constantly be moving. In a non-valet model there will be lag time in between charging. At a valet you might be able to get 24 hours; at a self-park you may only get 10 hours or 12 hours of charging when you figure out the downtime.

MHN: What kind of premiums are residents willing to pay for this convenience, and how does it impact owners’ bottom line?

Farkas: Not everyone owns an electric vehicle, but there are going to be tenants that do. The numbers range from 5 percent to 95 percent. I believe 10 percent of cars sold on an annualized basis are EVs, being conservative, especially on Obama’s numbers of wanting to sell 1 million a year by 2015. If 10 percent of the cars out there are EVs, they are going to need to charge, and you can’t have all the tenants subsidize 10 percent of people’s fuel bills. One of the main reasons why multifamily residential facilities and parking garages want these units is because it allows them to charge the people who are getting the services, and the landlords are able to generate money off that. We share the revenue stream that we receive off of those units with the landlord so they have an additional revenue stream for those units and it doesn’t cost them anything.

MHN: Is there anything else you’d like to add?

Farkas: All electricity is produced domestically. … We are not sending our futures and our fortunes outside our country [to get it]. [Electric vehicles] allow people to save a fortune because to operate an EV versus an internal combustion engine is roughly 20 cents on the dollar. You’re leaving money in peoples’ pockets, which is the local economy. … On a federal basis, you have no idea how we subsidize the oil industry. We spend $90 billon a year securing the water rights, making sure that the water routes that our boats take are secure. I’m not even talking about the transportation of the fuel; I’m talking about $90 billion a year just to secure that transportation that we spend for out of our tax dollars. If the U.S. government says we’ll take that $90 billion and buy everyone an EV in America, in two years everyone would have an EV.

There’s a national security component to having EVs and there’s a fiscal component where all the money is staying domestically [and we] can create jobs locally by producing the cars and battery technologies here. There are so many reasons why we should use electric cars.

It’s very important for us to deal with all the multifamily residential property owners, and it’s not only our obligation but it’s their obligation to assist in [EVs] being sold by having charging stations in their [communities]. It becomes a very fluid and convenient way of driving your car.