Electronics and Semiconductors

Will Costco, Ikea, Target and Walmart bump up EV charging?

10 April 2024
Source: Consumer Reports

Big box stores with large swaying parking lots seem to be excellent candidates to build electric vehicle (EV) charging stations. However, these chains have not fully adopted adding the infrastructure in the U.S.

This may all be changing, according to data from Consumer Reports, as big retail stores including Costco, Ikea, Target and many more are looking to up their installations of these EV charging stations soon.

Why big box?

Omnipresent big box stores in the U.S. are often located centrally to highways with hundreds of Americans arriving via car to shop or dine near them. Currently, some of these offer fast charging capabilities but not in the numbers that the Biden Administration is looking to hit if its 50% of all new car sales by 2030 will be electric.

In fact, the American government said 1.25 million public EV chargers are needed to meet this projected demand but currently less than a tenth of these chargers have been installed in the country.

Consumer Reports found that only one out of 14 big box store locations; one out of every 15 grocery stores; and one out of every 40 department stores on average had only two to five chargers per location.

This data backs up consumer complaints regarding the severe lack of EV public charging stations in the U.S. and was a reason why it was the most common worry they have before purchasing a new EV.

Consumer Reports said that given the enormous need for public charger infrastructure build out and to help reduce consumer range anxiety, these retail stores could be a key player.

Big box leading or lagging?

Ikea leads the way in EV charging stations with the retail furniture chain having them at nearly 100% of its U.S. locations.

Costco, Target and Walmart/Sam’s Club all have EV chargers between just 1% and 10% of their stores. Of the 8,000 big box stores in the U.S., Consumer Reports found only 600, or 7.3% had EV chargers.

Ikea may have nearly 100% but it only has 54 stores in the U.S. while Costco has 600 U.S. locations, Target has 1,960 stores and Walmart has more than 5,200 stores.

Consumer Reports found that adding EV charging is good for business at these big box locations. ChargePoint, an American charging network, found that the amount of time a consumer spent at a store while charging their EV increased by 50 minutes. Blink, another charging company in the U.S., found that 89% of EV drivers make a retail purchase while charging.

This lure of longer shopping outings and having consumers buy goods convinced Publix and Stop & Shop supermarkets to offer free charging at a few of its locations.

“Early on retailers were happy to install EV chargers because they tended to be for wealthier consumers,” said Scot Case, VP of corporate social responsibility and sustainability at the National Retail Federation, when interviewed by Consumer Reports. “Now our members absolutely want to do anything to appeal to all consumers, as EVs become more widely available and more affordable for everyone.”

Some problems

Prices by electric companies are an issue as these energy vendors may dramatically spike the price of electricity supplied to EV charging sites at retail locations when demand rises. This charge would either be absorbed by a retail location or passed onto the consumer.

Nonprofit advocacy group Rocky Mountain Institute recommended that state intervention is needed to limit or eliminate spiking energy costs at public EV charging stations. If the Biden Administration’s 2030 goal is to be achieved, this may have to become a reality. Although another potential solution is installing solar technology or on-site battery backup to avoid such charges, Consumer Reports said.

How to motivate installations

Other methods are being used to reduce the costs of installing EV chargers and to encourage adoption. This includes the Inflation Reduction Act, which would provide tax credits up to 30% of the cost of installing EV chargers at retail store locations.

Many of these incentives are earmarked for low-income and nonurban areas, where about two-thirds of Americans live.

Another program, called the Charging and Fueling Infrastructure Grant Program, which falls under the Bipartisan Infrastructure Law, has about $2.5 billion to award funding to states and local municipalities to develop chargers along travel corridors and in local communities.

While these federal funds could provide businesses with more incentives, Consumer Reports said that only 13 companies out of the 75 reviewed had public commitments regarding installation of EV chargers. Specifically, Circle K, H-E-B, Kohl’s and Northeast Grocery were the only retailers with specific timelines for action including the exact number of charging locations and the installation date.

So, while there is cause for optimism, there are still many hurdles to go through before meaningful installations at big box stores are achieved.

To contact the author of this article, email PBrown@globalspec.com

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