The Netherlands is one of the first countries to experience significant commercial adoption of electric vehicles and as a result of that charging infrastructure is popping up all over the place. It's important to carefully think about the pricing policies one develops for using charging infrastructure as the initial pricing models will partially determine the future of electric cars.We thoroughly believe pricing structures related to electric car charging should not be done solely based on the price for the quantity of energy flowing into the car (kWh). Several other factors are involved in determining the pricing structure of which I'll use the speed of the charging process to support that claim.
In Amsterdam currently there are several providers offering charging facilities throughout town. Let's distinguish between two providers. One that charges at 240V/16A (offered by let's say Provider A) and another type offering 240V/32A (let's call the provider of these stations Provider B)With my car (a Tesla Roadster) this results in the following charge times (empty to completely full meaning approximately 54 kWh or 300km of range):
- Provider A (240V/16A): 14 hours or 21 kilometers per hour
- Provider B (240V/32A): 7 hours or 42 kilometers per hour
Scenario 1: pricing solely based on kilowatt-hoursSuppose both Provider A and Provider B base their pricing solely on the price per kWh going into the car and they set their price at 25 cent per kWh. This means as a user of the charging station it doesn't make a difference where I charge. I always pay €13,50 (54 * 0,25). Assuming I'd like to have my car charged up as quickly as possible, I'm always going to charge at a charge station offered by Provider B, it's quicker and the price is the same. Which is nice for me as a user... in the short term.
The long term effect though will be the exact opposite. Assuming a 32A charging station is more expensive to buy, install and operate, Provider B's margins will be lower than the margins Provider A is making on charging. Provider B might consider to fit new charging locations it's realizing with a 16A connection, as its cheaper hence increasing their margins.In other words: although in the short term it's more attractive for me as a user (faster charging against the same price), the long term effect is that all 32A charging stations will be phased out in favour of (cheaper, for the operator) charge points and a less attractive charging network as a whole.
Scenario 2: pricing based on kilowatt-hours as well as speedSuppose Provider A and B based their pricing on a combination of price per kWh and charging speed. And let's say they stayed away from the term kWh in their pricing models but instead based their pricing on time. We could then come for example see the following prices being set:
- Provider A (240V/16A): €1 per hour (translating into €14 for a full charge)
- Provider B (240V/32A): €3 per hour (translating into €21 for a full charge)
ConclusionIt's clear that Scenario 2 is the best option to go for. This is however not the case in Amsterdam right now. Most providers are charging based on a price per kWh and don't take into account the charging speed. This will not cause big problems in the short term, but will result in a suboptimal situation in the long run. There are several other factors to take into account when settling on pricing models for electric car charging. Things like availability of a charging station, ease of use, parking facilities and fees, services offered in the region of the station can all influence pricing. We might even move towards a price per kilometer driven in the future.
Only when freedom exists for market players to take into account all these factors, a truly competitive market will develop. This in turn will result in a more attractive charging network for end consumers.