
When ChargeNet Stations approached Taco Bell to see if the company would be interested in having one of the chain’s restaurants become a testing ground for its electric vehicle chargers, the Mexican chain knew just the operator to suggest: Diversified Restaurant Group.
The 298-unit operator is one of Taco Bell’s most innovative franchisees. It invented the company’s hip “Cantina” concept, for instance, and is the owner of that notable Las Vegas location where customers can get married. It’s also a massive operator in California, home to many of the country’s electric vehicles, or EVs.
“We like to not only be the first, but to redefine the QSR segment,” Tom Douglas, Diversified’s chief operating officer, said in an interview. Specifically, he said, the operator wants to change the reputation of fast food.
The company jumped at the chance to operate the first ChargeNet station, at one of the chain’s locations in South San Francisco. The restaurant is equipped with solar panels and a half-dozen charging stations.
Customers plug their electric vehicle, or EV, into one of the chargers, pay $20 for 20 minutes and then, at least theoretically, go inside to enjoy themselves a Mexican Pizza or a Chalupa.
“We’re excited,” Douglas said. “For the current customer, it now offers something in addition to their visit to Taco Bell. And it can maybe attract someone who went to charge somewhere else before.”
It could become far more common if companies like ChargeNet have their way. As demand for EVs increases, the need for a national charging network grows with it. And restaurants, with their plentiful parking lots and presence along major thoroughfares, are a natural stopping point for those looking for something to do as they charge their Nissan Leaf.
The demand
EV demand is soaring faster than many people realize. Just under 5% of the vehicles sold in the U.S. last year was electric, according to the IEA, an agency that seeks to promote sustainable energy. But that was more than double the percentage of the year before.
And that is expected to continue increasing. Boston Consulting Group expects that 47% of the vehicles sold in the U.S. will be battery electric vehicles by 2030. But it’s also worth noting that BCG projections on EV sales have grown considerably in recent years as demand has outpaced expectations.
State and federal regulators have been pushing the auto industry in this direction for years, tightening rules on vehicle emissions. The infrastructure law passed last year included $7.5 billion for EV charging networks. In California, all vehicles will be required to produce zero emissions by 2035.
Auto manufacturers have gotten the hint. There are 94 different EV models, including battery powered and plug-in hybrid models, available in the U.S. right now, according to EV Adoption, a consulting firm on the transition to electric vehicles. That includes 35 models priced at under $50,000. It’s not just Teslas.
“We’re moving away from an internal combustion engine to electric,” said Tosh Dutt, founder and CEO of ChargeNet. “More EVs are going to hit the roads at more price points allowing more people to access them.
“But one of the biggest challenges is the charging part.”
There are 108,000 EV charging ports in the U.S., according to the consulting firm GetJerry. The number of charging ports is soon expected to outnumber the total number of gas stations in the U.S.
Yet that won’t ne nearly enough based on the growing demand for EVs. GetJerry estimates that the U.S. will need to build 478 charging ports per day for the next eight years to meet the demand from the number of electric vehicles expected to be on the road by 2030.
The biggest problem: Charging an EV battery takes at least 30 minutes and, though the range of electric vehicles is improving, it’s still not as strong as the range for gas cars.
Enter the restaurant
Dallas Henderson is not an EV owner. But he has rented them. And on one such trip, he had to charge the car in a parking garage. “And then we would walk and eat,” he said.
Henderson, who spent more than 25 years in restaurant operations and now works with the consulting firm RizePoint, believes the industry should get on board with adding charges to their parking lots.
“The projections they’re making, they’re putting EVs as 10% of traffic by 2030,” he said. “That’s literally the blink of an eye. It seems like a no-brainer to me.”
Some companies have been moving in this direction already. The parent company of Pilot and Flying J Travel Centers are working with General Motors to put charging stations in 500 of their travel plazas. Chargers can be found at some casual-dining restaurants, such as TGI Fridays, Cracker Barrel and Buffalo Wild Wings.
Starbucks this summer began putting EV charging stations at Starbucks locations along a 1,350-mile route between Seattle and Denver along Interstates 90, 84 and 70. The company worked with Volvo and a charging company called ChargePoint on the project.
The ChargeNet-Taco Bell plan may be the biggest yet, however. Diversified plans to put charging stations in 100 Taco Bell locations throughout California by next year.
Dutt started ChargeNet 2.5 years ago with the goal of putting charging stations at restaurants. The idea, he said, is simple: That’s where the people are. “Over one-third of the population eats at a quick-service restaurant on any given day,” Dutt said. “That’s 120 million people visiting QSR parking lots. It’s convenient.”
The ChargeNet system uses a combination of solar power and energy storage to offset demand on the energy grid. The company installs solar panels at the restaurant and uses them to offset the energy use coming from the charging stations.
The company has received funding from a variety of angel and social investors, including Aligned Climate Capital, the San Diego Angels, Tech Coast Angels and the LACI Impact Fund.
The chargers can provide drivers with 100 miles’ worth of charges in 20 minutes for $20, though ChargeNet is working on faster chargers. Dutt also noted that the operator gets a piece of the revenue.
Dutt said the strategy of putting the chargers in restaurants can get at a broader population. “The whole mission is to decarbonize the world as much as we can so we can conserve natural resources and make sure there is a planet for us going forward,” he said.
“We’re democratizing EV charging,” he added. “To do that, we have to put it in places where you’d otherwise have trouble putting this in, including a lot of low-income areas.”
Electric vehicle registration by state
Double revenue
Fast-food restaurants are frequently located along heavy commuting routes, which makes them natural locations for charging stations. It should be no surprise, therefore, that among the first concepts to try this a decade ago was Cracker Barrel, located primarily along U.S. interstates.
But there are practical business reasons for restaurant chains to at least consider this: They can generate revenue in their parking lots while they generate revenue inside their restaurants.
Given the time it takes for a car to charge, it makes sense that drivers might want to get a bite to eat while they do. “It’s perfect from the convenience standpoint,” Douglas said.
It also gives them a reason to maintain dining rooms. When the pandemic hit, much of the fast-food business shifted to the drive-thru. While dining rooms have long reopened and consumers are going back inside again, most fast-food restaurants have a lower percentage of dine-in customers than they did before the pandemic.
“Drive-thru is still a pretty big part of the business,” Douglas said. “But the mobile portion has been pretty big since 2020.”
Diversified has big plans for these chargers. The company expects six of its restaurants to be equipped with them by the end of this year and then 100 next year.
ChargeNet itself expects to install its chargers at other brands’ restaurants, too. And they won’t just be located in the Golden State. “It isn’t just a California thing,” Dutt said. “There are other states where the incentives and policies are really good.”
By adding chargers to their parking lots, restaurants could turn the tables on convenience stores that have been muscling in on their prepared food turf in recent years. After all, as Henderson said, “You don’t want to hang out in a gas station.”