Editor's note: There's a lot of news about electric vehicles these days, and we're featuring it on the CoServ Blog every week. If you are a CoServ Member or Customer with questions about EVs, please contact us at EV@coserv.com.
By NICHOLAS SAKELARIS | CoServ
There’s a strong initiative now to install public charging to allay consumers’ fears about range anxiety, thus encouraging the purchase of electric vehicles.
As EV News & Notes reported last week, President Joe Biden has called for 500,000 chargers nationwide so Americans can travel coast-to-coast in an EV.
But the devil is in the details on how this will work from a business standpoint.
This week, a Forbes article described the difficulty of turning a profit with public charging stations as they compete with much cheaper electricity that EV owners already have at their homes.
Imagine if you could leave home every day with a full tank of gasoline that cost less than a dollar. How would gas stations ever compete or turn a profit?
That’s the challenge faced by companies selling electricity for public charging today. By their nature, chargers in public places have to be faster (because you typically don’t spend 4 to 8 hours there) and more expensive.
According to CoServ’s Electric Vehicle Calculator, a CoServ Member could drive a Tesla Model Y 50 miles a day for a month for about $45 in electricity costs by charging at home.
It’s a much different story when you use a public charger.
Tesla’s Supercharger network operates at cost – their focus is on selling cars – but still charges between 25 to 30 cents per kilowatt-hour. Compare that to CoServ’s residential rate, between 8 to 9 cents per kilowatt-hour. There’s a convenience factor here if you’re on a road trip, plus the fact that these Superchargers charge much faster so there has to be a surplus charge for that.
Electrify America charges as much as 43 cents per KwH for its vast network of chargers, including the ones installed at North Texas Walmart and Sam’s Club stores. These stations aren’t being built as a business – Volkswagen is installing them as part of a settlement for the “Dieselgate” scandal.
Forbes points out that at that price, interest among even the most passionate EV owners drops. That’s 11 cents per mile, which is more expensive than driving a fuel-efficient gasoline-powered vehicle with gas at $2 a gallon.
Relying on EV owners who live in apartments and townhomes won’t be very promising either because they would have to pay higher electricity rates to charge in public and receive none of the benefits, Forbes points out.
Some public chargers at shopping malls are free to use because they know consumers will spend money while they’re charging. They may stay longer and spend more because the trip home will be “free.”
The Forbes article suggests taking that a step farther where restaurants bundle charging into the cost of a meal so EV owners will be encouraged to eat there. EV owners who are on a road trip need to stop to eat and charge so combining the two make sense.
In this COVID-19 pandemic world, having the ability to pre-order food, have a charger station reserved before you arrive and then pay one bill for the meal and electricity and then eat in your EV while enjoying the infotainment screen with free wireless internet could be a viable solution.
Some companies, like Volta, which just raised $125 million from Goldman Sachs, proposes 55-inch digital displays that can sell advertising as a way to make money.
Making public charging affordable but also profitable will be a challenge that will take an entrepreneurial mind to solve. Sounds like a great opportunity to think outside the box.