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The effect of the upcoming EV mandate on commercial real estate

On Behalf of | Jun 23, 2023 | Commercial Real Estate |

Across California, depending on what area you’re in, you may see multiple electric vehicle (EV) charging stations in parking lots of commercial structures where people grocery shop, go to the movies and bank. You’ll see them on the properties of commercial office buildings, universities, hotels, hospitals and more.

Over the next decade-plus, we’ll be seeing many more – and commercial real estate developers, owners and investors will need to give them a lot of thought. That’s because last year the California Air Resources Board approved regulations that put California on track to end the sale of gas and diesel-powered vehicles by 2035.

A million new charging stations

Approximately 1 million new charging stations will need to be installed to handle all of these new EVs. Some will go in gas stations and other businesses like convenience stores that currently sell gas. Further, all kinds of commercial real estate throughout the state will need to have these stations.

This will require determining how much space will need to be allocated both in new structures and existing ones and the best place to locate them. In addition to commercial retail and office properties, more will need to be installed for multi-family buildings.

All areas will need access to charging stations

While more EV stations are currently found in wealthy areas than low-income urban and rural communities, the people who live and work in those communities will need greater access to convenient charging stations as more people have EVs.

This won’t be inexpensive. Builders and owners will need to pass it along to their tenants. The California Energy Commission (CEC) is offering millions of dollars in incentives to help those who need help with the costs. The CEC commissioner says, “These funds will help fill the gap in areas where we know charging is needed the most to bring the benefits of clean transportation to all Californians.”

A lot of different parties (including state agencies) are still learning how to navigate the upcoming changes. Twelve years isn’t a particularly long time when it comes to commercial real estate development. By having experienced legal guidance, you can more successfully keep up with these and other changes in state regulations.