Range Confidence: Charge Fast, Drive Far, with your Electric Car

By David Herron

Last Update: May 3, 2019

Widespread electric car adoption requires a robust widespread public electric car charging network. Otherwise electric cars can only be bought by those who can install charging at home, and those people would be limited to a short radius around their home. Hence, there must be a viable business model so businesses can make the profit required to pay their employees and so forth.

Many claim there's no viable business model for electric car charging networks. Maybe they think there's no viable business model until there's enough number of electric cars on the road? Somehow, even though the charging network business model is tricky, there are several companies pursuing the charging station market with a lot of big-money interest in building out electric car charging infrastructure.

In other words, there is a competition over what business(es) and types of business will control this charging infrastructure.

At the level of you and me, individual electric car owners, we need to know the public charging infrastructure will exist, that it will be widely enough deployed to power our travels, and that it will be reliable enough to be there when we need it.

We want those things from any business whether it is pet grooming shops or fast food restaurants or charging station networks. The bottom line is all that is dependent on businesses making a profit offering the service, making a profit depends on Revenue and Expense, and if Revenue exceeds Expenses then the business is probably making a profit.

Revenue-side (income)

Different organizations are pursuing many types of goals when offering electric car charging. Some want to profit directly off the charging business, while others seek a secondary gain.

Membership fee's, Station usage fee's

The charging network operator business goal is explicitly to profit off operating a charging network.

The vast majority of charging network operators have a membership scheme. To use a station the car driver must be a member of the charging network, usually being required to carry a membership identification card. The member typically waves the card at the station to start the process. In some cases instead of a card they'll have a smart phone app, which reads a QR code on the station.

Membership is usually free, while in other cases there's a membership fee. For example the American network, eVgo, has several membership tiers, one of which is free, and others entail a monthly fee. The membership tiers come with different fee structures at the charging station, and the higher monthly fee might mean free charging station access. The networks with free membership will obviously make all their revenue from charging fees.

Charging networks generally charge either a per-minute, or per-hour, or per-kiloWatt-hour fee for charging station usage. Some governments prohibit anyone other than electric utilities from retail electricity sales. The per-minute or per-hour fees are a workaround for those regulations, since the network is not then selling electricity but selling access to the charging station.

In some cases the fee will change over time period. For example doubling the charging fee after four hours encourages the car owner to move their car when the car is charged. Another strategy is to charge by the minute even after the car is fully charged, again to encourage that the car is moved away.

In the vast majority of cases, you do not pay money at the charging station. The stations generally do not have credit card readers or an ability to accept cash. Instead the membership card is tied to an account maintained by the network operator, and you'll have pre-arranged either cash in the account or given them your credit card number.

Free stations with advertising

Some charging networks do not charge a fee at all. Instead they put up advertising displays and their revenue comes from advertising fee's.

Don't we already have too much advertising in the world around us?

Free stations to gain customer goodwill

It's well understood that the longer a customer lingers in a store the more likely they are to make a purchase and the more they're likely to spend in the store.

Store owners then can easily connect the dots between offering charging and increased sales potential.

Charging sessions can easily last a couple hours, making a good fit for certain types of businesses. Most wouldn't want to linger in a McDonalds for any longer than the minimum necessary, but a coffee shop or bookstore or hair salon or shopping mall, etc, are excellent places to linger for awhile.

Another ploy is the emotional tug. We'd honestly appreciate the chance to charge our car, and therefore want to buy something from the store to show that appreciation.

Free stations from non-profit's

A few charging networks exist as a non-profit providing a public benefit. They'll usually seek support from donors rather than the people using the stations.

Businesses offering employee perks

All kinds of businesses offer broad ranges of employee benefits as a way to build employee loyalty. Offering free or low cost charging stations is no different from offering free drinks in the cafeteria.

A related problem is coordinating charging station sharing among employees. While the business might want to offer an employee benefit, the business can't go overboard because it could become a huge cost. Therefore there's likely to be a limited number of stations. As a result, many companies face huge competition between employees over charging station access. One solution is charging a fee meant to encourage the employees to promptly move their cars when fully charged.


A ubiquitous electric car charging network cannot exist on altruism. The cost (as we'll see) is significant and has to be covered in order to keep the charging networks running.

In some cases government policies have funded charging networks as an incentive. But many electric car drivers come to expect free charging, then get grumpy when the free charging stations start charging a fee after the grant money runs out.

Cost structure for electric car charging businesses (expense side)

There are real costs to running a charging network. As we just said, altruism won't work to support widespread electric car adoption. We, as electric car owners, need to have at least a smattering of understanding of the costs to understand whether or not we're being ripped off by charging network operators.

Charging station fee's are usually way above the cost of electricity. As of this writing a typical fee might be $0.49 US per kiloWatt-hour, while the cost of electricity is $0.12 per kiloWatt-hour. Does that mean the charging network operator is ripping us off? No ... read on about the costs.

Network operations center

Charging network operators must have data communications with the charging stations. If a customer calls in for support, the support staff must be able to electronically reach out to control the station. Further, the support staff must be automatically alerted when stations fail, and must be notified of electricity consumption rates.

That means an Internet connection either over wired or wireless. At the other end of the connection is one or more network operations centers containing support staff who are monitoring the charging station health and answering support calls.

The costs are data communication fee's, the equipment in the field and in the network operation center, the buildings, and the employees.

Electric car charging equipment maintenance and installation

Charging stations obviously cost money to buy and install. Businesses call this a "Capital Expense" and they carry the value of that equipment on the balance sheet as an asset. The stations will be a depreciating asset, meaning they'll write off part of the value every year. After a few years the station will have zero asset value and should theoretically be replaced.

Additionally there's on-going maintenance costs. That's both routine maintenance, like sending an electrician out every so often, as well as unplanned maintenance when the station breaks.

An unfortunate reality in today's world are the copper thefts. Copper is a valuable commodity, and the thick charging cables are a tempting target for copper thieves.

Cost of parking spaces for charging electric cars

An installed charging station needs to be set aside for electric car owners while charging their car. See Charging station etiquette - effectively sharing limited electric car charging resources

It costs money to build and maintain a parking space. A lot of money. The owner of that parking lot will need to receive value for that parking space, and often the charging network operator pays a fee to the parking lot owner.

Research and Development

The current charging network is okay, but is not the charging network we really need. That means Research and Development costs at charging network operators, electric car companies, and charging equipment manufacturers.

For example - a long-term promise is connecting cars to the smart grid to help with electrical grid stability and other things which could earn income for electric car owners. But that whole idea is still in the prototype phase with lots of remaining questions to be settled. They're nowhere near public deployment, and in the meantime there's lots of money going into research.

Another research area is developing an identification mechanism for members of one charging network to use stations belonging to another charging network. Why should we as customers care about which charging network a given station belongs to? We don't have this problem with ATM cards or cell phones or gasoline pumps. The problem, however, is not at all simple and it's not even clear whether the charging networks have the proper incentive to cooperate with other charging networks on this problem.

Charging network fees

Some charging networks impose a fee on host sites. In the ChargePoint network, the stations are owned by the host site rather than by ChargePoint. That makes the host site responsible for a long list of details, with ChargePoint offering that host site useful functionality. Obviously many host sites are paying those fee's, because ChargePoint is the largest charging network in the world with operations in North America, Europe and Australia. But many potential host sites balk at the fee's and look for alternatives.

The other charging networks offer different business relationships. In many cases the charging network owns the station, and then rents space from the host site.

One strategy to avoiding charging network fees is to install a simple non-networked charging station. There's no charging network fee or any other complication, but also no method for charging a fee. Obviously this is only suitable for those host sites willing to eat the electricity and maintenance costs because the charging station serves some other purpose.

Summary ... Bottom line ...

Revenue: Either the station owner receives charging fees or some other business benefit

Cost: Charging network operations comes at a large cost.

Unfortunately - while charging networks theoretically exist to ensure reliability, that isn't always the case.

Range Confidence is Copyright © 2016-17 by David Herron

About the Author(s)

David Herron : David Herron is a writer and software engineer focusing on the wise use of technology. He is especially interested in clean energy technologies like solar power, wind power, and electric cars. David worked for nearly 30 years in Silicon Valley on software ranging from electronic mail systems, to video streaming, to the Java programming language, and has published several books on Node.js programming and electric vehicles.
(disqus.com) comments powered by Disqus