# Pro Forma Financial Statement for EV Charging Station Investment This example provides a **step-by-step process** to create a simple Pro Forma (projected) Income Statement for an investment in Electric Vehicle (EV) charging stations. --- ## Step 1: Gather Assumptions Let’s define reasonable, simplified assumptions for a single year of operations: - **Number of charging stations:** 5 - **Cost per charging station (installation + equipment):** $40,000 - **Annual maintenance per station:** $2,000 - **Electricity cost per kWh:** $.15 - **Charging price per kWh:** $.30 - **Average kWh dispensed per station per day:** 100 - **Operating days per year:** 365 - **Other annual operating expenses:** $10,000 - **Depreciation period:** 10 years, straight line - **Tax rate:** 21% --- ## Step 2: Calculate Revenue **Annual kWh sold per station:** $100 \text{ kWh/day} \times 365 = 36,500 \text{ kWh}$ **Total annual kWh sold (all stations):** $36,500 \times 5 = 182,500 \text{ kWh}$ **Annual revenue:** $182,500 \text{ kWh} \times \$.30/\text{kWh} = \$54,750$ --- ## Step 3: Calculate Costs ### a. Cost of Electricity $182,500 \text{ kWh} \times \$.15/\text{kWh} = \$27,375$ ### b. Maintenance $2,000 \text{ per station} \times 5 = \$10,000$ ### c. Other Operating Expenses $10,000$ ### d. Depreciation Total investment: $40,000 \times 5 = \$200,000$ Depreciation (straight line, 10 years): $\$200,000 / 10 = \$20,000$ --- ## Step 4: Prepare Pro Forma Income Statement | **Item** | **Amount (USD)** | |-------------------------|------------------| | **Revenue** | $54,750 | | **COGS (Electricity)** | $(27,375)$ | | **Maintenance** | $(10,000)$ | | **Other Op. Expenses** | $(10,000)$ | | **Depreciation** | $(20,000)$ | | **EBIT (Operating Income)** | $(12,625)$ | | **Taxes (21%)** | $* | | **Net Income** | $(12,625)$ | *EBIT (Operating Income) is negative, so no taxes are owed; net loss for year 1.* --- ## Step 5: Explanation - **Revenue:** Based on total kWh sold and price per kWh. - **COGS:** Electricity purchased for resale. - **Maintenance/Other:** All other recurring expenses. - **Depreciation:** Non-cash expense, spreading initial installation cost across useful life. - **Net Income:** Negative in this scenario, often expected in early years for infrastructure investments. --- ## Step 6: Final Answer > **In Year 1, the projected (Pro Forma) Net Income for the 5-station EV charging investment is a loss of $12,625.** --- ## Sample Pro Forma Income Statement (Markdown Table) | **Pro Forma Income Statement** | **Year 1 (USD)** | |-------------------------------|------------------| | Revenue | $54,750 | | Cost of Goods Sold (Electricity) | $(27,375)$ | | Maintenance | $(10,000)$ | | Other Operating Expenses | $(10,000)$ | | Depreciation | $(20,000)$ | | **EBIT** | $(12,625)$ | | Taxes (21%) | $ | | **Net Income** | $(12,625)$ | --- ### Note - **This is a simplified model.** Real projections should include financing, utilization ramp-up, variable pricing, and more. - **Cash flows** (not shown) would add back depreciation, showing a less negative result. - **Sensitivity Analysis** is advised for key assumptions (utilization, price, costs). --- ## [Optional] Visual Representation  *Alt text: Illustration of EV charging station* --- ## References - Pro Forma Statements: [Investopedia](https://www.investopedia.com/terms/p/proforma.asp) - EV Station Economics: [U.S. Department of Energy](https://afdc.energy.gov/fuels/electricity_infrastructure.html)