California's EV Push Means CRE Better Get Chummy with Chargers
The more electric vehicles on the road, the more space, and power, will be needed for them to plug in.
In general, to understand what will happen, stop listening to what people say and watch what they do. In the case of electric vehicles, that means recognize the future and, if you’re in CRE, recognize that it means charging stations. Especially, but not only, if you operate in California.
The Golden State has approved a rule that will require all new cars and light trucks sold there to be zero-emission by 2035. As Governor Gavin Newsom’s executive order states, “The transportation sector is responsible for more than half of all of California’s carbon pollution, 80 percent of smog-forming pollution and 95 percent of toxic diesel emissions – all while communities in the Los Angeles Basin and Central Valley see some of the dirtiest and most toxic air in the country.”
That’s fine, but the move assumes that everything around the cars, the infrastructure that allows them to run, will be compatible, and that’s going to take a lot of work. Not only likely massive changes in an electric grid that has had notorious failures for years, but in buildings—offices, apartments, medical facilities, warehouses, distribution centers, hotels, restaurants, and so on down the list of the CRE property types.
If cars or SUVs or pickup trucks parked at a facility, owners will need to ensure that there are charging stations, because many of the people that come to a place to work or live or travel will need to plug in to top off their vehicle. At least some of those charging stations will need technology that allows people to charge rapidly, because no one will be willing to say, “Oh, I forgot to charge up before I hit the road, guess I’ll have to sit it out here for a few hours.”
The charging stations will need enough power to charge vehicles in a reasonable fashion, which is going to mean checking if the local substation has the capacity to deliver, not just to your building, but virtually every other one in the vicinity.
Construction will take time and be disruptive, and there probably isn’t enough data on how people expect to charge up, or whether they remember to before going out, and what the necessary number of charging stations might be. (Hint, a token few likely won’t be enough.)
This is a particularly Californian CRE issue at the moment because of the new rule. But owners, operators, and investors throughout the country need to pay attention. California may be leading the way now, but your time will come as well.