Operators investing billions in new EV charging sites

Electric vehicles have become big business. At the end of 2016, just 0.4% of all new vehicles registered were electric, but latest figures show cars with a plug are now accounting for about 20% of all new car sales.

It is estimated there are about 850,000 fully electric cars currently on the road in total and an additional 530,000 plug-in hybrids. As the number of cars has increased, so has the number of chargers available just not by enough.

The Government’s target is for 300,000 public chargers to be available by 2030, but Zap- Map, a website which tracks the rollout of charging devices, estimates there were just 48,450 electric vehicle charging points across the UK at the end of August 2023. While this represents a 42% increase in the total number of charging devices since 2022, there is still clearly a long way to go.

This presents an opportunity for landowners, with charge point operators actively searching for sites for new rapid-charging stations on motorways and main A-roads throughout the country. The level of investment waiting to be deployed is certainly impressive. ChargeUK, an organisation which represents 18 of the biggest businesses operating in this space, says its members are committed to investing £6 billion by 2030 to ensure drivers have access to ‘a high-quality charging solution, when and where they need it, right across the UK’.

Operators are looking for land next to existing service stations, as well as completely new and separate sites, where there is high traffic flow, good access, a local population likely to use the facility, and grid capacity. They are typically offering long-term lease agreements, usually for 20-30 years, for land areas in the region of 0.8-3 acres.

The operator will pay all planning and construction costs and run the site when it is operational. In return, a base rent of £60,000/acre or more may be achievable and often a revenue share.

Landowners who are approached by an operator are advised to seek advice as early as possible in the process, as we have experience of the market and of the sort of terms a company should be offering.

Strutt & Parker negotiated the terms of the lease on behalf of the landowner for Gridserve’s Braintree Electric Forecourt, which was the first of its kind to open in the UK in December 2020. This electric-only facility enables 36 electric vehicles to be charged simultaneously, supplied by 100% renewable energy. There are also retail outlets, office pods and a car showroom on the site. Since then, we have been instructed to advise landowners in respect of approaches from developers for similar schemes, which are now being progressed.

There are, of course, also opportunities for smaller-scale installations. These may be of particular interest to landowners with commercial sites, such as business centres or retail outlets. The business model for these is much more varied. The landowner can choose to sign a standard commercial lease and take a rent.

Alternatively, they can enter into a hybrid agreement where the capital costs are shared along with the profits. Another option is to fund the installation and connection costs completely, then pay the operator a maintenance and administration fee and take all of the income generated.

Although the Government’s decision not to ban the sale of new petrol and diesel cars until 2035 has deeply disappointed the EV sector because it feels like a u-turn, the switch to electric cars will continue. The Department for Transport has published a mandate, which says that 80% of new cars and 70% of new vans sold in Great Britain must be zero emission by 2030.

Pressure to improve the EV charging infrastructure is not going away, opening up lucrative possibilities for landowners in the right locations. They just need to find the best way to plug into the opportunity.

This article was first published in our latest issue of Land Business. For more download the Autumn/Winter 23 edition of Land Business. If you have queries about the EV charging opportunities contact Jeremy Dawson or Oliver Lukies.