It’s not at all easy to answer the question of “What should EV charging cost?” Current prices are all over the map, ranging from free to “more than gasoline” and they include billing by the minute, by the kilowatt-hour or both, and adding session fees, flat fees or idle fees after the car is done. All of these approaches have reasons behind them, and on one hand they are confusing and on the other hand a lot of EV drivers barely care at all. It’s a very different world from the fairly simple, and relatively uniform pricing of gasoline, which is sold by the gallon.
The reason for this is that while gasoline teaches us to think of the fuel for our car as a commodity, charging is a mix of energy for sale and a service, and it’s much more a service than a product. Because of this the styles of selling vary so much.
The best and easiest charging is at home. That just goes on your electricity bill, and a bit like gasoline, you pay by the kWh. The average rate in the USA is around 10¢/kWh, but home electricity can run from 6¢ to 50 ¢/kWh depending on your electric company and in particular, the time of day in the growing number of places that use “time of use” (ToU) electrical metering. Since most people charge EVs at night, ToU is actually very popular, and in fact, in California, EV owners get a special EV ToU rate just for them.
But even that simple cost at the home has extra complexity that is described below.
A quick primer
Kilowatt-hour (kWh) — A unit of energy. You EV will get from 4 to 3 miles/kWh if it’s a sedan, less if it’s a truck/SUV. If you want to compare an EV to a 25mpg car, think of 7 kWh being like a gallon of gasoline.
Killowatt (kW) — A unit of power. How fast a charging station delivers the energy. Your station at home might deliver 1.4 to 7kW. A public fast station does 50kW to 350kW.
EVSE — An AC electrical connection for slow charging. The charger is built into the car, this is just the plug. It’s pretty common for people to call this plug a “charger.” Mostly at homes and offices. Commonly found in may other locations, but generally only useful in places you stay for many hours.
Charger/Supercharger/DC Fast — For fast DC charging, there is an actual giant charger in the box and the small charger built into your car is not used. Used on road trips or by people who can’t charge at home/work.
Almost every customer wants to pay by the kWh, because once the session is done, that’s what you’ve received – a battery full of new kWh. Just like you think with gasoline, your car will get 3-4 miles/kWh. You care a lot though, before the session is done about how fast the charging is and where it is. Fast chargers that bill by the kWh cost from 25 to 59 ¢/kWh, or up to 15 ¢/mile in typical EVs, much more than home or slow charging, but everybody takes it in stride – they know they are paying for the service, not the energy, even though the energy is what they drive away with. For reference, at $5/gallon, a Prius is 10¢/mile but an SUV is over 30¢/mile. The EV will cost as little 2¢/mile in a place with cheap night electricity in a Tesla model 3 to 25¢/mile for a Ford F150-Electric at a 55¢/kWh station.
In some places, in particular states that forbid (for archaic reasons) billing by the kWh, you will see stations that bill by the minute. That’s actually closer to what the charging station operator may want, for normally their costs are fixed, so you’re buying time on their expensive charging machine and other infrastructure. The wholesale cost of the electricity is often as little as 3¢/kWh, and the extra costs are transmission, peak-demand surcharges, high-power connection fees and that expensive machine. In California, the average company installing a high powered charger has paid $100,000 to do so, though they often got fat subsidies from the government to pay for most of it.
During a charging session, amount of power delivered at any time is quite variable, and controlled by the car. When a battery is empty, it can take power at a high rate, but over 50% full it slows down a lot. By the time you are 80% full the rate starts dropping to as little as 20kW – not much faster than a slow EVSE, and if you try to go to 100% it will drop to that rate. For this reason, people who don’t need the full range of their battery usually only charge to 80% — it’s better for the battery too. In fact, the “time optimal” strategy for a long freeway slog is to drive your battery down to around 10-20%, then charge it up only to 50-60%. This means many more charging stops but they go at full power so the time spent charging is minimized. (If the charging stops are not right at exits, that time saved can be wasted.)
People get quite frustrated when paying by the minute as they watch the charge rate go down. They are paying more, often much more, for those last kWh that come in slowly. It’s like the price of gas on the pump going up as you fill up the tank, for those stuck in gasoline thinking. To get around this (and the laws on charging by the minute) some stations use “tiers” so they bill you less per minute when the charging rate is lower. In Texas, for example, Electrify America charges 16¢/minute when giving below 90kW, but 32¢/minute above that. In some areas there can be 4 tiers, effectively trying to approximate kWh pricing in a rough way. If you’re pulling 150kw from such a charger you’re only paying about 13¢/kWh, which is a great price, though the rate never stays that high for too long. (EA stations were built with penalties from VW, so their prices are often good.)
People also get angry when a station charges by the minute and it seems the station is slow. They feel they are getting cheated by the station. The charge rate is supposedly determined by the car, but only up to the max rate the station wants to allow, so it’s a joint decision.
Some people don’t care
Driving an EV is usually much cheaper than driving a gas car, ¼ to 1/3rd the price when you charge at home. People stop caring about the price which makes the market even stranger. Some stations are even free. These are commonly slow charging stations, but it’s even seen in fast stations. They were typically put in with subsidies, by companies who wanted to show how green they were, or to attract rich EV driver customers. It’s very common for employers to provide free charging to staff and even guests. Volta installs free chargers with big advertising boards – the site gets free charging to look green, Volta sells parking lot ads. Some stations with prices charge almost at random, it’s not unusual to see very wide variation in the same town all connected to the same power company and running the same rate.
But the customers also don’t care. If you truly need charging, you will pay almost anything for it, and in these early days there is not another charger across the street. At Tesla
To my surprise, two Tesla Superchargers in Cupertino, California, one next to Apple Computer HQ in a neo-urban mall and the other 2 miles down the road see this pattern. The older charger is slower and has fewer stalls. At peak times it costs twice as much as the one down the street. While the old one has nicer shopping and ambience, and the new one has better shopping, it’s not unusual to see the old one full at twice the price. The drivers just don’t seem to care about the price. Tesla keeps the new one cheap to lure people away and it only partly works. (For those not familiar with Teslas, the car always shows you the charging stations on the map as you drive, along with how many free stalls they have, and if you click, their speed and price.)
With such odd customer attitudes, it’s not surprising there’s been a lot of pricing experimentation. For some time, chargers in Oregon charged a flat fee. If you were empty and needed a full charge you got a great deal, but it was a horrible deal if you just wanted a short top-up or wanted to use the 10-50% strategy. This pricing has vanished, but per-session fees (on top of minutes or kWh) are still common.
Another aspect of pricing is “idle fees” which are fees charged after your charging is done (or sometimes after you hit a time limit for the station.) These exist to stop people from blocking a station after they are full, which is good, but they are also a pain as they force people to return to their car and move it even if nobody is waiting or likely to wait. When charging overnight, you don’t want to have to go move your car at 4am just in case somebody is coming in then – but there are few easy solutions to this problem, other than just having more stations, or multiple cords on stations, or ways for new arrivals to push a button to start the idle fees only once somebody is truly waiting. None of this is great. At fast chargers, the need is even stronger, particularly if the station is full enough that a line might develop. Everybody agrees the fees make sense in that situation, while hating them when they have to pay them. (Tesla charges idle fees only if the station is 50% or more occupied.)
So what’s a good price?
Drivers want to pay by the kWh. Sellers costs are much more per minute, but they also want drivers to have understandable prices. As a result, it is most common to charge by the kWh, but to vary the per-kWh based on the costs of running the charger, including equipment, connection and time. A rate that combined kWh and time would frustrate drivers, but if charging were a business with competition — it’s usually not — the price would usually settle on the seller’s actual costs plus a competitive margin. As yet it does not, and so we’ll see other fees including parking, idle fees, session fees and more.
For now, due to the massive subsidies for putting in stations — with more to come — and the varying price by time of electricity, we won’t see an actual competitive business for some time. In addition, it’s hard to have competition when the location of the charger is so important. You want it to be at a location you want to spend some time. If you have a particular place to be, one charger is not a replacement for another, just like two parking lots a mile apart don’t compete. Competition on gasoline pricing is tight, and prices remain within a short range of each other even across an entire town. A station 10% cheaper will get a giant line, and people will irrationally spend more on the gasoline to drive to it than they save. We’re very far from that with electricity.
The extra cost at home
With fast charging, most of the cost is the service and equipment, not the electricity. The same can be true at home for some people. For lucky homeowners, it can cost just $200 or so to install the wiring for the 14-50 “50 Amp RV” plug in their garage. They can, in many cases, just plug the EVSE (often mistakenly called a charger) cord that came with their car into that. (Tesla recently stopped including this EVSE with new cars but sells it for around $200. Cords for other cars can be found for $200 to $300. Permanently installed home EVSEs tend to run $400 to $600 plus the wiring.)
Sometimes though, the wiring is vastly more expensive. This will be true on homes that don’t have modern 200 amp service from the power company, which need a service upgrade and new panel. Electrical codes will often force this on you even if you don’t actually need it, and the cost can easily get to $5,000 or more for that. In that case, when you’re going to only put in $400 worth of electricity per year, the wiring easily becomes the dominant part of the cost for a long time. Fortunately most people don’t need to put in a full 6-7kw EVSE — but most people imagine they do. It turns out most drivers can do fine with 1.4kw of “level 1,” which can be very cheap to put in, and almost all drivers are just fine with 3kw which can also be much cheaper and doesn’t require a service upgrade. It surprised me when I got by for 2 years with just 1.8kw of level 1 with no install cost, and most people will swear it’s impossible until they try it. Their fear comes from the fact that at this level, a few times a year it will not be enough for your travels, but that is solved by a detour to a fast charging station, which while it can be time consuming, is much cheaper than a service upgrade.
As policymakers look to how to enable EVs, they often spend massive amounts of money on subsidies for public charging. This is almost entirely wrong — making it easier to get charging at home or work (including rental properties) through a combination of improvements to electrical codes, improved regulations and much smaller subsidies is the way to make sure people can charge.