Plug-in electric vehicle (PEV) drivers are increasingly being asked to pay for the use of public charging stations. At the same time, charging network operators continue to explore ways to make public charging profitable – although this is not happening without some controversy. And a few network operators are using innovative schemes to try to maintain free access to public charging. Meanwhile, automakers are taking matters into their own hands and inserting themselves further into the charging market. It all makes for an unpredictable market, with no clear business model having yet emerged as the most viable. These trends are explored in Navigant Research’s upcoming report, Electric Vehicle Charging Services. This blog examines the issue of “charging for charging.”
Free No More
Many public charging stations began life as a free service – often after having been supported by government funding. This was the case with many of the chargers deployed on the Blink network through the U.S. Department of Energy’s EV Project, for example. This model would appear to be unsustainable given the cost of maintenance and upkeep, networking fees, and electricity. And certainly, as charging stations are deployed without government support, businesses need to recoup the cost of the equipment – probably between $3,000 and $6,000 per station – and the installation, which can easily double the upfront cost to the site host.
However, the switch to for-fee charging is coming as an unpleasant surprise to some PEV drivers. For example, in the United Kingdom, EV charger company Chargemaster sparked a backlash when it launched a new tariff scheme for its POLAR network of public stations in April 2014. Network subscribers have two options, each of which entails paying a set membership fee and additional fees based on usage. The usage fees are based on time, not kilowatt-hours (kWh) used, as is typical for markets where regulations prevent EV networks from charging for electricity. PEV drivers in the United Kingdom protested that the fees were too much, too soon for the nascent U.K. PEV market. They also complained that charging based on time spent charging, rather than electricity, was unfair given that different PEVs receive different levels of charge.
Fair’s Fair, Maybe
In the United States, moving to a per-kWh charge has also created controversy. U.S. EV charging company Car Charging Group has switched some stations on its Blink network to a per-kWh fee in states that have passed regulations permitting charging companies to bill for electricity consumed. Some PEV drivers have complained that these new fees represent a significant price increase. Car Charging Group has noted that the per-kWh scheme is fairer than charging on the basis of time spent charging.
These two examples show the challenges that public charging continues to face as it strives to become a revenue-generating business. Some of this is temporary; over time, the market will adjust to the norm of fee-based charging services. But PEV drivers continue to have a low threshold for what they’re willing to pay for Level 2 charging (fast charging is a different story). The outcome of this struggle could help determine the future of the electric vehicle market.
Tags: Clean Transportation, Electric Vehicles, EV Charging, Transportation Efficiencies
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