The Benefits of a Finance or Lease Model Over EV Charging-as-a Service (CaaS)

As electric vehicle (EV) adoption accelerates, businesses, municipalities, and property owners are increasingly focused on installing EV charging infrastructure. With the rise in demand, decision-makers face a critical question: what’s the best way to finance and manage EV charging stations? Two popular choices are the Finance or Lease and Charging-as-a-Service (CaaS) models. While CaaS offers convenience, the Finance or Lease model provides long-term advantages that often make it a better choice.

A financed or leased option offers several benefits over CaaS:

Fixed Payments: Lease or finance payments are often fixed, allowing for better financial planning and budgeting.

No Long-Term Contracts: After the financed or lease term is complete, you own the equipment and no longer have to pay ongoing fees, resulting in savings over time.

Tax Benefits: Leasing or financing EV charging stations may also offer tax deductions or credits, further reducing costs.

This predictability offers a financial advantage over the CaaS model.

Ownership and Control

One of the most significant benefits of financing or leasing EV charging stations is ownership. With the Finance or Lease model, the business or property owner can retain control over the charging infrastructure once the financing or lease term is complete.

Pricing, Brand, Locations, and Customize the User Experience

With ownership, owners have a say in the brand of EV chargers, where they get installed, how many units to add, and set their rates for EV charging, creating potential revenue streams.

Using the ownership model, owners may implement software solutions and user management tools that align with their goals. After the repayment or lease term, the infrastructure becomes a long-term asset with minimal ongoing costs.

In contrast, with the Charging-as-a-Service model, the service provider owns the equipment and controls how it’s used. While this can reduce upfront costs, it limits your ability to make decisions that best suit your long-term strategy.

Lower Long-Term Costs

Though Charging-as-a-Service might have lower upfront costs, the Finance or Lease model often proves to be more cost-effective over the long term. In the CaaS model, businesses typically pay a recurring subscription or usage fee, which can accumulate over time.

Revenue lost to CaaS potentially outweighs the upfront cost of ownership. In the ownership model, once the initial investment is covered, only maintenance, electricity, and software are ongoing costs, instead of recurring service fees and the lower revenue percentage by choosing CaaS. Unexpected fee increases may occur with CaaS.

Customizable and Scalable Infrastructure

Another key advantage of financing or leasing is the flexibility to customize and scale your EV charging infrastructure. Since you maintain control over the equipment, you can upgrade, expand, or modify the system to meet your evolving needs. You’re not locked into predetermined service levels, and you can adapt as your business or property grows.

In the CaaS model, service providers often offer limited customization options, and scaling your infrastructure may require renegotiating contracts or even switching providers, which could be costly or disruptive.

Maximizing Revenue Generation

For businesses looking to turn EV charging into a revenue-generating asset, owning the infrastructure through a Finance or Lease model offers more opportunities.

Owners can set competitive rates for charging and offer premium services such as fast charging for a higher fee. Integrating with local utilities for demand response programs or selling surplus electricity back to the grid are other options.

These revenue streams can make EV charging not only self-sustaining but profitable over time, a benefit that’s harder to achieve in the CaaS model where owners share profits with the service provider.

Greater Reliability and Service Control

With the Finance or Lease model, owners are free to choose their own maintenance and service providers, ensuring that their charging stations remain operational and reliable. Owners can negotiate their own service contracts, choose a provider that meets their standards, and respond quickly to issues. This model allows the owner to adapt quickly to new technologies or business needs without waiting for third-party approval.

In contrast, the Charging-as-a-Service model ties owners to the service provider’s maintenance schedule, which might not always align with a business’s operational needs. This could lead to longer downtimes or less flexibility in addressing problems. Enel X Way’s recent announcement has left their customers scrambling to address the loss of hardware and software support.

Potential for Government Incentives and Grants

Many government incentives, grants, and rebates for EV charging infrastructure are contingent on ownership. Financing or leasing EV chargers can make owners eligible for these financial incentives, which may not be available under a CaaS arrangement where the service provider owns the equipment.

Independence From Third-Party Providers

One of the most compelling advantages of the Finance or Lease model is the independence it offers from third-party providers. By owning and operating EV charging infrastructure, owners eliminate reliance on external service providers for critical decisions such as service availability, pricing, and equipment upgrades.

Long-Term Value Over Short-Term Convenience

While the Charging-as-a-Service model offers convenience and a lower barrier to entry, the Finance or Lease model provides significant long-term value. It allows businesses to own their EV charging infrastructure, control their pricing, customize their service, and generate long-term revenue.

For organizations looking to not just adopt EV infrastructure but to integrate it into their long-term business strategy, financing or leasing offers the financial flexibility, control, and scalability necessary for long-term success.