Electric-Car Charging Stations: Will Market Forces Cut Prices?

2012 Toyota Prius Plug-In Hybrid - production model

2012 Toyota Prius Plug-In Hybrid - production model

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As some public charging stations have started charging fees for charging sessions, many electric-car drivers are debating what a fair price would be. 

Virtually all drivers accept that it's reasonable to pay something to charge at a private business.

Two executives from Coulomb Technologies, which is installing the ChargePoint network of charging stations, weighed in with their experiences after two years in the trenches.

They suggest that electric-car drivers will choose only those stations that charge what's viewed as a fair price, meaning market forces will adjust prices to acceptable levels.

Today, the most common model now being introduced is to set costs for charging sessions by time, e.g. $2 per hour.

This is largely viewed as unfair. The majority of mass-market plug-in vehicles for 2011 and 2012 draw only 3.3 kw per hour, or about 50 cents of electricity per hour at average U.S. electricity costs.

Some newer electric vehicles (the 2012 Ford Focus Electric, 2012 Coda Sedan, and the 2012 Tesla Model S) can charge that twice that rate on public Level 2 charging stations.

It would appear that electric-car owners unanimously want to be charged for the actual electricity they use, measured in kilowatt-hours.

Unfortunately, many states do not allow a private vendor to “set electric rates,” a privilege reserved to utilities that are regulated by various state and local public commissions. 

Leading the way to address this problem, California has passed a law (AB631) that allows charging station owners to decide exactly how they want to set charging fees: per hour or per kilowatt-hour.

And, said Pat Romano, CEO of Coulomb Technologies in an interview, other states are planning to follow suit.

“We don’t set pricing for charging from our units," added Richard Lowenthal, founder and Chief Technology Officer of Coulomb.

He asserted that the pricing is “free to be set” by property owners where the charging stations are located. 

Coulomb Technologies ChargePoint

Coulomb Technologies ChargePoint

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Romano acknowledged that “$2 is expensive per hour,” and said he believes that pricing formats will “settle in” as electric-car owners and charging-station providers become more educated. 

Romano said Coulomb executives are "advocates of per kilowatt pricing,” and that only about 20 percent of the stations they have installed so far are charging today.

Electric-car drivers "are a good demographic to encourage to shop at your business," he pointed out, "so free charging--or at most a dollar an hour for charging by time--would be fine.” 

Lowenthal added that a market adjustment has already taken place for two of its ChargePoint stations in Palo Alto, California.

Both started out costing $5 an hour for charging, but no one used them at those rates. Now, one charging station is free and the other is costs just 50 cents an hour. 

The message seems to be clear for electric-car drivers: Unless you are desperate, avoid using any charging station that costs more than $1 an hour. Use your “market force” to demand pricing based on actual use, or at least less than the $2-per-hour rates seen at initial “experiment” sites. 

Romano and Lowenthal noted that most charging stations--especially in government or workplace locations--are likely to remain free for some time to provide an incentive for adoption of electric vehicles.

And they suggested that free charging can act as a powerful inducement for higher-income shoppers, the ones buying plug-in vehicles, to visit a local shopping area or business.


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Comments (16)
  1. Seems to me some sort of time related pricing is needed or people will hog the charging places longer than they need to blocking them for other users.

  2. I agree, they need both. You don't want people with cars already fully charged holding up spaces. KWh for the first 2 hours, then charge by time after that.

  3. many places have that where they charge for parking and charging. there should be a baseline set that takes into account both time parked and charge taken. this addresses people who top off for an hour but dont move their car right after the charge is done. give them 15 minutes, then start piling time penalties on them

  4. LEAF, Volt, Plug-in Prius, and iMiEV owners are upset because their too slow 3.3kW chargers make public opportunity charging expensive, unlike ActiveE, Coda, Tesla, and Focus drivers who’s cars conform to the US 6.6kW EVSE norm. They should be upset with Nissan, GM, Toyota, and Mitsubishi because they shunned faster charging, not the site owners who’s charge site they must tie up for twice as long.

  5. Even at 6.6 KW, a $2/hr charge is expensive. Assuming 4 miles per KW, that is 26.5 miles for $2. About the same as Prius getting 52mpg.

    Volt don't need to charge at all. The 6.6KW charger Cars are all more expensive as well...

  6. what is your point? what should they charge? what is the convenience worth to you? how much you pay to park near an event? how much you pay to park in your garage? its all relative. personally i think the convenience of going 150 miles instead of 100 or whatever without having to go home to plug in is worth something.

  7. They should charge per kWh as the site suggests, if laws can catch up to the times. Or, charge a rate based on your Vehicle make/model, and then limit the charger output to that Vehicle's rate.

    The current way the rate structure is setup is analagous to charging you $100 to fill your gas tank, regardless of the size of your gas tank.

  8. as i have stated from the get-go, the idea is useless and will never make it long-term.

    and this is just a very good example of what i have been talking about.

    it costs too dang much. people are gonna charge at home.

    and every year down the road as batteries get better, self charging stations will become less valuable.

    i dont see how anyone with half a brain cant see that.

    the cost for the business is surely a heckuva lot more than just the cost of electricity. probably at least double. for a business to make some profit, they are gonna need to set prices much higher than what average joe can do at home.

    we will need a charging network for trucks. and cars on vacation or going long distances could use it. all that is necessary.

  9. So, your last sentence is contradicting to your 4th sentence...

    If I have a 300 miles range EV, but I am visiting SF on vacation, I would still need self charging public stations in that city so I can "fill up" while I am away from home...

  10. not worth a reply

  11. market forces will work here. as far as "personal" needs. Grandiosity of the comments here will insure that we will have an endless argument over what is "right" but the one thing i found is that of the thousands of EV owners out there, we have about...say a thousand different sets of needs. have your say, you have the right but respect other people's rights

  12. While this does not surprise me, who do the electric car owners think pay for the space where the electric car charging station is located? The equipment? The people to man it? The overhead and accounting as well as the financing costs? The per kw is a tiny fraction of these costs.

  13. It can not cost more per mile to drive an electric car than it would to drive lets say a Prius on gas. Otherwise, what's the point? So if a Volt will go 40 miles on a charge, and a Prius will go 40-50 MPG, than it should not cost more than approx. 1 gal worth of gas to charge it for 4 hrs. So, roughly $1 an hr.

  14. Coulomb Techologies not only has a fatally flawed model ... it's management has little respect for employees.
    2012 Series D round of funding washed out all previous grant value. Per implementation of 2012 500/1 reverse split on all previous series stock grants, company erased grant value for over half of its employees.
    Company has reached only 30% of revenue needed to break even (b/e projected 2015), yet current 2012 CEO and CFO earn avg $350,000 annual salary. CTO (Primary founder) equally culpable as he supports this structure.

  15. CFO Tony Canova—had told the FBI that they were aware of the practice. And get this: soon after Reyes was convicted, Brocade brought civil suit against Reyes and others including Canova and his predecessor as CFO, Michael Byrd, with having colluded in the scheme.

  16. Public Level 2 charging is tough to make business out of. Drivers are unwilling to pay much for the service, and the equipment costs to buy, install, maintain. Level 3 charging by contrast can attract a higher fee thanks to convenience of quick charging.

    I like the Level 2 model they are implementing in Australia. 240v switched electrical outlets. Simple and cheap to install with minimal maintenance. The business attracts additional business in exchange for free electric. What isn't there to like about that? The charging network middleman can't make money on level 2 units. I believe the experiment will fail.

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