A Look at EV Charging Pricing Policy and Why It Matters
For many drivers there is a basic understanding of how traditional gasoline pricing functions: Oil prices based on availability and proximity in large part dictate how much a driver will pay at the pump. However, with the continued expansion of EV charging stations, there is still a lot to learn about the complex factors that contribute to pricing policy for EV charging. While some aspects of pricing policy remain similar to conventional gas pricing, let's learn about how pricing policy for EV charging is set and the future of electric-powered travel.
Pricing at a Glance
Charging up your electric car at home sets a pricing baseline. The cost of charging your EV at home essentially equates to the price of electricity used to charge your battery. Of course, if you have installed a level 2 charger that should be factored in, but at some point, that cost will be offset. Where you live and your utility provider will play the biggest roles in the price of charging at home.
Out in public is where pricing becomes slightly more complicated. Now factors like station demand, utilization and more contribute to pricing policy. Learning the localized baseline cost to charge at home can help both drivers and station owners understand fair and competitive pricing.
Pricing Options
For both private and public charging, there are a few methods by which station managers can charge customers for a charge. These include pricing based on kilowatt-hour (kWh), time or at a flat rate. By analyzing station metrics, managers can optimize their stations in order to offer the most value to customers and earnings for properties. Factored into this equation is the speed of charge; while fast charging is typically priced higher, it significantly reduces the time needed to be spent on a charger. EV Connect’s software is crucially helpful to conduct a cost-benefit analysis for how to set up your chargers.
Public vs. Private Pricing Policy
Pricing for private and public charging contains complexities that are important for the EV industry to consider. As the electricity grid continues to expand to meet the demands of electric travel, pricing becomes even more critical to understand. Let’s take a look at the specifics of private and public pricing policy.
Private Pricing Policy
At first glance private pricing appears perfectly straightforward: The cost to charge is the cost of electricity. However, private charging goes slightly beyond just one driver charging at their home. Private charging is any charging that limits who can access the station; that could mean stations in private homes, multi-family residences, workplaces and any other spaces with limited access.
Pricing for private charging then becomes more complicated. Some workplaces or apartment complexes may want to offer their stations as a perk, and as such, they may offer free or discounted charging. For example, tenants may pay a different price than the general public. Additionally, some EV manufacturers offer a private network for their vehicles and may offer free or reduced cost charging to incentivize their vehicles.
Private pricing has to be set with a specific set of users in mind. Drivers who have reliable private charging access spend less than drivers without. This reinforces that private charging is often priced lower as an incentive for other benefits, whether it’s living in a complex or working for a company. The good news for site hosts: EV Connect has the tools to reduce operational costs through pricing strategies.
Public Pricing Policy
All of the complexities found in private pricing for charging stations affect public pricing. While aspects like demand and availability remain similar to traditional gasoline pricing, public EV charging stations face a unique set of challenges when considering pricing.
As the power grid necessarily expands to meet the needs of the EV industry, the pricing model will adapt with it. The number of public charging stations grows constantly, but the grid needs to keep up or prices will have to be based on what power is available. Pricing for the public depends on power availability as well as demand. That means that at a time of day when there is a high power demand and a high charging station demand, prices will need to inflate to match the draw on resources.
Fortunately, the EV Connect Platform provides a helpful suite of metrics to help track station performance and set pricing based on performance. Understanding each station’s utilization, driver’s charging patterns and variable energy costs can help owners and managers optimize pricing strategy and maximize profits.
Smart Charging
A sustainable and valuable future for EV charging relies on smart charging. Smart charging has a tangible impact on pricing as well. Both vehicle manufacturers and charging station companies like EV Connect continue to enhance their ability to adapt and optimize energy usage. Through smart charging and the ability to intelligently alter energy draw based on cost and availability, EV charging pricing can remain stable instead of skyrocketing when there is high power demand.
The Future of EV Pricing Policy
One of the biggest challenges the EV charging industry is facing right now is the lack of consumer knowledge. Surveys show that many EV drivers do not understand the real savings associated with charging an electric car vs. gassing up a traditional gas-powered vehicle. More public knowledge paired with smart charging can ensure a sustainable future for the EV industry. And pricing will need to remain competitive yet sustainable as well. EV Connect provides tools to both drivers and station owners to remain informed and understand EV charging pricing.
Sources
IRIS Pricing Solutions - How Pricing for EV Charging Is Totally Different to Gas Pricing
ESource - EV Charging and Pricing: What Are Consumers Willing To Pay?
Tesla - Supercharger
Reuters - Factbox: Five facts on the state of the U.S. electric vehicle charging network