Researchers from the Mens, Manus, and Machina (M3S) Interdisciplinary Research Group (IRG) at the Singapore-MIT Alliance for Research and Technology (SMART), in collaboration with the University of Florida, Melbourne Business School, Tongji University, and the Massachusetts Institute of Technology (MIT), have published a groundbreaking study. This study, one of the first of its kind globally, underscores the economic advantages of Electric Vehicle Charging Stations (EVCS) and their potential to influence urban planning and economic development on a global scale.
Amidst a global shift towards cleaner energy, nations are increasing their efforts to adopt electric vehicles, setting ambitious goals to eliminate petrol and diesel in transportation sectors. The sales of electric cars have risen by approximately 25% in the initial quarter of 2024 compared to the same period in 2023, with projections indicating that these sales might hit 17 million units by year-end, making up over 20% of global car sales. Specifically, in Singapore, the Singapore Green Plan mandates that by 2030, all new cars must be of cleaner-energy models, supporting the plan to install 60,000 EVCS by the same year. The deployment of these stations is seen as critical infrastructure in the broader initiative to promote electric vehicles, providing essential data for policymakers, industry stakeholders, and consumers.
The paper, published in Nature Communications and titled “Effects of Electric Vehicle Charging Stations on Economic Vitality of Local Businesses,” analyzed data from more than 4,000 EVCS and 140,000 business establishments in California, USA. The study found that the introduction of a single EVCS could enhance local business revenues by 1.4% in 2019 and by 0.8% between January 2021 and June 2023, translating to an overall revenue boost of USD 6.7 million in 2019 and USD 19.5 million from January 2021 to June 2023. The presence of EVCS tends to attract higher-income, exploratory visitors and residents.
Drawing parallels with the business model of convenience stores at petrol stations, the research suggests that integrating EVCS with services such as accommodation, food, arts, entertainment, recreation, and retail can significantly amplify revenues by drawing more customers, thereby enhancing the economic vibrancy of local areas. Employing a ‘difference-in-differences’ methodology—used to assess the impact of new policies by comparing changes over time between a group affected by the policy and a control group—the study established a definitive causal relationship between EVCS and favourable economic outcomes.
Interestingly, while EV owners generally hail from higher-income brackets, the benefits of EVCS are not limited to affluent neighbourhoods. The installation of these charging stations also boosts spending in economically disadvantaged areas, suggesting that EVCS could be pivotal in stimulating economic vitality in these communities.
The study also highlights the potential for EVCS to influence urban planning and economic development significantly. For EVCS operators, there lies an opportunity to devise business models that foster partnerships with local enterprises to stimulate regional economic growth. Additionally, policymakers, particularly in regions with burgeoning EV markets like Singapore, can leverage these insights to integrate the financial advantages of EV infrastructure into broader planning and investment frameworks.
The research team utilized a comprehensive analytical approach, analyzing real-world data from diverse Californian locales through advanced statistical techniques, machine learning, and economic forecasting to bolster the reliability of their findings. This rigorous methodology not only sets a new standard in research on EV infrastructure but also lays a strong foundation for future explorations into the broader impacts of EV adoption.
“Understanding the synergistic relationship between EVCS and urban planning is crucial for creating sustainable cities,” explained Dr Yunhan Zheng, a Postdoctoral Associate at SMART M3S and the study’s primary author. “By optimizing the placement of EVCS and considering elements such as public transport access and green spaces, we can develop more livable, climate-resilient urban environments.”
Professor Jinhua Zhao, Lead Principal Investigator at SMART M3S and MIT professor, emphasized, “Electric Vehicle Charging Stations can be powerful catalysts for economic growth, especially in underprivileged areas. Our findings offer valuable insights for those committed to advancing clean energy goals while fostering economic development. Through strategic deployment of EVCS, we can stimulate job creation, attract new businesses, and enhance property values, thereby reaping the economic and social benefits of clean energy infrastructure.”
Looking ahead, the SMART M3S team plans to conduct further studies to refine the placement of future EVCS in Singapore. Building on current insights, they aim to maximize the positive impacts of EVCS on local economies by strategically positioning these stations to foster economic growth and development both within Singapore and globally.
More information: Yunhan Zheng et al, Effects of electric vehicle charging stations on the economic vitality of local businesses, Nature Communications. DOI: 10.1038/s41467-024-51554-9
Journal information: Nature Communications Provided by Singapore-MIT Alliance for Research and Technology (SMART)