Start an electric vehicle conversion business by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your electric vehicle conversion business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening an electric vehicle conversion business?
As previously mentioned, your initial investment will focus on your education/certification. Once you pass the certification exam, you’ll need to develop a workstation. This should be a properly zoned, dedicated space equipped with all the necessary tools.
Because you’ll need to invest a significant amount of money in both yourself and your auto workshop, it’s important to budget for a specialized insurance policy. An experienced insurance professional can help determine the types of policies and level of coverage you need. If funding is a concern, consider looking into grants from the Environment Protection Agency (EPA), a local office of the U.S. Small Business Administration (SBA), or private investors.
What are the ongoing expenses for an electric vehicle conversion business?
When mapping out your business plan, work with a financial advisor to determine how much you should budget for ongoing expenses. Payroll will represent your largest expense because EV conversion is a labor-intensive process. Additional ongoing expenses include:
- Equipment maintenance, repair, and replacement
- EV conversion kits (prices start at $2,000)
- Business licensing
- Advertising and marketing
Who is the target market?
Initially, your target market should include local consumers concerned about the effects air pollution has on the environment. They’re committed to making positive changes and educating others along the way.
Most people who enter this industry have a passion for decreasing their carbon footprint. They enjoy learning and seek to educate others on the subject. Through your efforts, you’ll reach a secondary layer of potential customers — those who
How does an electric vehicle conversion business make money?
An electric vehicle conversion business generates revenue from each vehicle it services and/or converts.
How much can you charge customers?
While some EV conversion businesses charge as much as $25,000, the average price is $8,000 to $11,000 based on the specifics of the vehicle undergoing the conversion.
How much profit can an electric vehicle conversion business make?
A business owner who completes the work themself, charges an average $9,500 per conversion, and converts one vehicle a week can generate $38,000 per month. With an average of $11,000 in monthly expenses (including the cost of conversion kits), this entrepreneur can expect to make $27,000 a month in profit.
How can you make your business more profitable?
To maximize profits, electric vehicle conversion business owners should consider offering additional services. Two profitable services to consider include EV auto repair and car detailing. In areas where demand is high, opening a technical school also would prove profitable.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your electric vehicle conversion business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Read our Best Banks for Small Business guide to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Recommended: BlueVine is an online bank with free business checking and no hidden fees. Great for businesses who do not often deal with cash.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate an Electric Vehicle Conversion business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
In addition, certain local licensing or regulatory requirements may apply. For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
STEP 7: Get Business Insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market an electric vehicle conversion business
Because your auto workshop services are limited to your local region, you should focus your advertising efforts. Marketing materials should seek to educate consumers, anticipating and answering common questions. In addition to targeted online and social media advertising, business owners should consider paid ads in local publications. Clean energy organizations and other networking sites are excellent resources for spreading the word and ensuring you keep abreast of emerging trends.
How to keep customers coming back
Once you convert a customer’s vehicle, you have a unique opportunity to retain that customer. Those who have a positive first experience will look to you for advice and repairs in the future.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start An Electric Vehicle Conversion Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
Starting an electric vehicle conversion business is ideal for entrepreneurs seeking to get involved in a burgeoning industry. For people with a passion for doing their part to save Mother Earth while helping others, it’s an admirable and profitable business venture.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at an electric vehicle conversion business?
As an electric vehicle conversion technician, you’ll spend your days in your auto workshop. First, you’ll examine the vehicle you plan to convert and then develop a conversion strategy based on the specifics of that particular vehicle. After removing the combustion engine, you’ll install the EV kit.
Due to evolving technology and the specific skill set required to perform a conversion, it’s critical that you and your staff continue your education. You’ll need to maintain the necessary certifications, continually enhance your skills, and keep abreast of emerging trends. Additional activities will include managing the business’ financial and marketing strategies, answering current and prospective customer questions, and maintaining workshop equipment.
What are some skills and experiences that will help you build a successful electric vehicle conversion business?
First and foremost, EV conversion business owners and technicians should have experience working with and repairing motorized and electric vehicles. This will provide a solid foundation as you pursue your certification. While not all EV conversions require certification, pursuing this higher education — either online or at a local college — is strongly recommended. The IEEE and EAA-PHEV websites provide a wealth of information for new and existing conversion businesses.
While prospective clients understand the value of converting to an electric vehicle, they’ll require education and coaxing to commit to such an investment. Therefore, an ability to communicate with and sell to all personality types also would prove beneficial in this business.
What is the growth potential for an electric vehicle conversion business?
Consumer awareness of the toll air pollution from fuel-driven cars takes on the environment continues to grow. As a result, many want more fuel-efficient, low-emission alternatives. In 2019, the global electric vehicle market was valued at over $162 billion. By 2027, this number is expected to increase by 22.6 percent to almost $803 billion. That offers significant growth opportunities for entrepreneurs with the necessary knowledge and resources.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting an electric vehicle conversion business?
When shopping for a building to house your auto workshop, keep your short- and long-term goals in mind. How many vehicles do you plan to service each month? How many employees do you plan to hire? Will you offer additional services? If so, how much space and what tools will those services require? Most importantly, what’s the demand for those services in and around this area?
How and when to build a team
Whether you choose to complete the work yourself or hire a technician, everyone on your team must have the necessary experience and certification to get the job done. Take time to thoroughly research every potential employee. Keep your technicians engaged by investing in their continuing education and paying them a fair and honest salary.