Market Will Force Pricing Cuts At EV Charging Stations

5 years ago by Inside EVs Staff 12

Paying By The Hour Is Not A Good Proposition For Current LEAF Owners

Electric vehicle charging stations currently charge one of two ways, by the kWh, or by the amount of time spent plugged in.

As an owner of a charging station, charging by the time plugged in is what is desired because it nets more revenue.  “By the hour” charging is also more difficult for the consumer to realize the amount of premium they are paying for electricity over just plugging in at home. 

As a EV owner, most want third party charging stations to not only be convenient and available in their area, but to be charge at a flat, reasonable fee per kWh.  Exactly how many cents per kWh that might be however, is up for debate.

An additional  factor of  timed charging rates to consider is that different cars can charge at different rates, and therefore are different value propositions.  At an L2 station, the Nissan LEAF can only charge at a rate of 3.3 kW, while the Focus Electric or Tesla Model S, can allow for double that, at 6.6 kW.  Essentially, your choice of electric vehicle can net you a 50% discount at the charger, or a 100% increase over your peers; depending on your prospective.

Charging Stations Will High Costs Will Likely Find Themselves Abandoned

Regardless of which payment structure you prefer, the cost for service at the machine will ultimately, at some point, be determined by the price the market will bear.  While many stations have just been put into operation, and others have just begun charging for electricity, those market forces are already at work.

The Christian Science Monitor recently sat down with two executives from Coulomb Technologies (which is currently installing the ChargePoint network) to get their take on the industry, and how it is unfolding after two years of experience.

They suggest that consumers will quickly find the stations that charge a ‘fair price’ and use those almost exclusively, shunning others they feel are over charging, or gouging.

The Coulomb execs tell CSM that the most common practice for charging is an hourly rate, and is employed by 80% of those stations currently providing a payment for electricity service.  As for the consumer, the execs says that they unanimously want pay to per kWh.

One Of Many ChargePoint Stations In The US

The decision to not structure the payment process the way the customers wants is not entirely the charge station owner’s fault, as many states do not allow  private businesses to set electric rates, that is reserved only for utilities that are regulated by the government.

Addressing this problem, California recently passed a law (AB631) that allows charging station owners to decide how they want to set charging fees: per hour or per kilowatt-hour, and many states are expected to follow California’s lead in the near future.

Pat Romano, CEO of Coulomb Technologies, says that “$2 is expensive per hour,” but that prices will “settle in” as EV owners become more educated and more stations are available.  Romano says they are “advocates of per kilowatt pricing,” which makes sense because they are in the business of selling the chargers and have no control (or financial gain) over the revenues of the chargers directly.

Richard Lowenthal, founder and Chief Technology Officer of Coulomb, added that in some areas change is already occurring.  In Palo Alto, California, there was two ChargePoint stations both charging $5 an hour, and both found their business to be non-existent.  Today, one charging station is free and the other costs just 50 cents an hour, and are utilized frequently.

The sweet spot for charging per hour, or at least what customers are willing to pay on a regular basis, seems to be $1 per hour.  At this rate, most stations are well utilized, while anything priced above that, and the opposite is true.

Romano and Lowenthal both believe government and work place charging spots are likely to remain free for the longest period of time as they have an interest to promote the electric movement in the community and for their workers.  They also point out that free charge points can mean added incentive to high income buyers of electric vehicles to shop at malls and places of business that provide the service.

Christian Science Monitor

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12 responses to "Market Will Force Pricing Cuts At EV Charging Stations"

  1. Rick says:

    I know these guys have to make money after paying for the stations, but electricity is so cheap that anything they charge seems like a rip

  2. These units (For example Coulomb & Blink) cost between $4,000 and $5,000 each and depending on what is needed for installation can be many thousands more. I installed a Blink and a Coulomb EVSE in the parking lot of my restaurant in Montclair, NJ recently and the installation alone was about $4,000 for the underground conduit, concrete bases, all the digging and finally the electricians bill for pulling the wire and hooking everything up.

    People just won’t install them if we expect free or extremely cheap pricing. Lets say a car like my ActiveE or a Focus EV pulls in to charge and can at the stations limit of 6.6kW. I pay .19 per kWh so they can draw $1.25 of electricity per hour. How much should someone pay for that? Even if the station manager was to charge a very high price of $3.00 per hour, they would never make their investment back if they paid $10,000+ dollars to install two level 2 EVSE’s.

    I’m going to be offering free charging for patrons that plug in and them come and eat in my restaurant, but $2.00 per hour if you plug in and just walk away. Even then it’s barely break even for the electricity cost, insurance and long term maintenance cost. I really installed them because I am such an EV advocate but as a pure business decision, it’s really difficult to justify it unless you can charge $2.50 or $3.00 per hour and have the stations utilized a LOT every day.

    1. Open-Mind says:

      Interesting info, thanks. Some people will complain about any profit I suppose. However…

      … for a typical Volt owner, $1 of electricity might eliminate the need to buy $5 of gas instead.

      … for atypical Leaf owner, $1 of electricity might eliminate the fear of being stranded.

      Compared to those alternatives, your prices seem very very reasonable to me. Likewise, I would also expect to pay more for the convenience of faster charging.

  3. That all being said – yes, I would support the ability to charge by the kWh instead of by the hour so the charging fee is assessed fairly

  4. indyflick says:

    I think the business model is totally broken. The costs to install EVSEs are high and the EV owners don’t want to pay much to charge. Also, what are costs just to bill me a $1 on my credit card? So it could be “free” to the public, when business owners like Tom see the value. Or it could be coin operated I suppose to at least reduce the transaction costs.

    A membership plan is a non-starter for my wife and I. The reasons are two-fold. First, the charging spots I’ve seen around town are often ICE’ed. If it’s “free” to charge and I’m blocked, oh well… such is life. But, if I’m paying a membership fee and I can’t use the service, then that’s an issue. Second, I’m reading that it’s probably not a good idea (for the longest battery life) to charge an EV (at least not a LEAF) until it’s cooled down after a drive. With public charging there would be no cool down period because you typically start charging immediately after you pull in. So we’ve decided to continue to charge at home in the cool wee hours of the night and be done with it.

  5. Nelson says:

    Tom,
    Are you saying NJ will not allow you to charge per kwh on your charging station?

    1. Tom Moloughney says:

      Yes, that’s correct. It’s illegal to charge by the kWh. I actually think that’s the way it is everywhere in the US.

      1. Nelson says:

        Tom,
        Are you paying ChargePoint a yearly fee for account services like billing and online reports? If so, did you compare that price with GE’s price for the same service using their WattStation? I was told by a ChargePoint representative the price for service would be $230 per level 2 port, per year. Is that what you pay?

        1. Hi Nelson,

          Yes I am and I believe that is the correct price. I had been waiting for GE to release the Wattstation – for over a year and I finally gave up. I talked with them last Spring(2011) and was told they would have the commercial Wattstation available in a couple months and I told them I would even volunteer to be a Beta site if they wanted. I kept waiting and waiting, and then the person I was dealing with was suddenly no longer with them and I just gave up. ChargePoint is basically the only network here in NJ that has any presence so any EV driver here would have a ChargePoint RFID card. I also installed a Blink unit and currently have the only public Blink charger in the state.

  6. Da55id says:

    One business model (if a bit draconian) would be to hire a towing company to drag ICE’ers out of the charging spots 😉

    1. Open-Mind says:

      Then you better also drag any EVs that are fully charged or not plugged in. Can’t discriminate, because you know those ICE owners … always ready to play the “fuel card”. 😉

  7. KeiJidosha says:

    I’m for the by-the-hour plan. Will push manufacturers toward 6.6kW on-board chargers thru consumer demand, improves availability for those that need to charge, and incentive for charged EVs to vacate when charging is complete.