Real estate sector to pave the way for e-mobility?

Complex decisions in the struggle against climate change

Climate change is presenting us with a highly complex challenge of global proportions. Take, for example, mobility. To reduce carbon dioxide emissions, policymakers and the automotive industry in Germany are counting on electric cars – and in doing so are creating what could become an extra line of business for the local real estate sector.

E-mobility needs electric cars – and charging points

For e-mobility to catch on, it will take more than just changing the way in which cars are powered. Without a comprehensive network of charging points, private individuals will not switch to electric cars. That’s where market players from other sectors, such as real estate, come in.

Back in 2018, a Deloitte study on “E-Mobility: Charging Infrastructure as a Business Segment” found that, for businesses whose core competency lies in consumers and buildings, expanding their business model to include the provision of charging infrastructure makes perfect sense. But why is that?

Mobility begins and ends where people live

Since car batteries currently take up to 14 hours to charge, charging points should preferably be located where the cars would be parked anyway. Instead of at petrol stations, electric cars are normally charged at the workplace, at the shopping centre or at home: mobility begins and ends where people live.

70,000 charging points by 2020

The majority of the roughly 10,000 charging stations that have so far been registered with the Federal Network Agency, the German national grid, are operated by power companies. However, the National Platform for Electromobility (NPE) has identified a need of around 70,000 public charging points plus 7,100 rapid charging points by 2020. But would the real estate sector be ready to step in as things stand?

What about the legal framework for the business with charging current?

The issue of installing a charging point in an existing underground carpark ended up in court back in 2017. A residents’ association had vetoed a request made by the owner of one of the flats, and the Munich Regional Court confirmed that residents’ associations were not obliged to comply with such requests. And that ruling stands to this day.

With new buildings, however, it’s different: in conjunction with generating electricity for the owners, charging points on residential property could create opportunities for the lucrative business model outlined by Deloitte – were it not for the German trade tax. The generation of power, as well as its sale as charging current, would lead to real estate companies losing their extended trade tax deduction. As a result, not only would the generation and supply of electricity be subject to trade tax, but so too would their rental income.

German tenancy and residential property law and the trade tax code still stand in the way of the real estate sector’s involvement in e-mobility. It’s now up to the legislature to create the required legal framework.

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