How to Start an Electric Vehicle Conversion Business

Start an electric vehicle conversion business by following these 10 steps:

1. Plan your Electric Vehicle Conversion Business
2. Form your Electric Vehicle Conversion Business into a Legal Entity
3. Register your Electric Vehicle Conversion Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Electric Vehicle Conversion Business
6. Get the Necessary Permits & Licenses for your Electric Vehicle Conversion Business
7. Get Electric Vehicle Conversion Business Insurance
8. Define your Electric Vehicle Conversion Business Brand
9. Create your Electric Vehicle Conversion Business Website
10. Set up your Business Phone System

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.

Exploring your options? Check out other small business ideas.

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 will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Business Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability.

It's very important to secure your domain name before someone else does.

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:

• Mortgage/rent
• Utilities
• Equipment maintenance, repair, and replacement
• EV conversion kits (prices start at $2,000)
• Business licensing
• Advertising and marketing
• Insurance 

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.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your electric vehicle conversion business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

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!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

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.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money 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.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

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.

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.

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.

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.

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.