Monetising electric vehicle (EV) charging makes it possible for charging service providers to generate income and return initial charging infrastructure investment. And eventually, make a profit.
But before setting up prices for EV charging, you have to decide what pricing model to choose. Should you use a single measurement parameter or a combination of several? We’ve prepared an overview of the possible EV charging pricing models. Dive in to determine which one fits your business the best.
The EV charging market in Europe is consolidating, but there is yet to be a common framework set for EV charging pricing. Currently, each charging service provider is free to choose their own pricing model.
However, a law passed in Germany has the potential to influence other European countries and set a standard for pricing EV charging across the continent. But more on the German metering law ‘Eichrecht’ later in the blog post.
EV CHARGING PRICING MODELS
Billing for public charging can be done in several ways:
- Time-based – based on how long the charging session lasts
- Energy-based – based on how much electricity is charged during a charging session
- Fixed-rate – e.g. a monthly subscription
- Hybrid pricing – combination of time and energy based
With a time-based pricing model, EV drivers pay e.g. per minute of their charging time. This model can be unfair as EV models differ not only based on battery capacity, but also battery design and driving range. That means that some EVs take longer to charge the same amount of electricity.
The time to charge up to 80% of the car's battery capacity can range from about 20 to 50 minutes. This provides EV drivers with the best-performing vehicles a clear benefit when the pricing is time-based.
The energy-based pricing model is the most suitable in offering transparent and fair rates. This pricing model makes it fair for two EV drivers with different EV models. It doesn't matter if their car charges for 30 minutes or 2 hours to get the same amount of kWh. They will both pay the same amount for their charging sessions in the end.
One kilowatt hour (kWh) expresses the amount of energy consumed over one hour. On average, 1 kWh is used to travel about 5 km.
To launch or boost a charging network, a new market player may want to choose a fixed pricing model, lower than competitive prices. This model can encourage new subscriptions and build customer loyalty. However, this model can discourage EV drivers who are only passing through.
A pricing model that combines time spent and kWh charged can help avoid the phenomenon of EV drivers leaving their cars plugged in even after the charging session is done, blocking access for other EV drivers wanting to charge.
The time measurement added to the kWh measurement encourages EV drivers to move their cars once the charging session is complete.
ADVANCED pricing MODELS
- Charging at off-peak / peak hours: You can also choose to set up pricing based on peak or off-peak hours. This pricing model can encourage EV drivers to charge outside of peak hours to get a lower price which will help not to overload the energy system.
- Pricing based on the type of EV charger: Fast and ultra-fast DC charging are premium services that allow EV drivers to charge quickly. And as a premium service, you can set higher prices on your DC chargers.
THE GERMAN CALIBRATION LAW: EICHRECHT
Germany passed a law providing a regulation for the measurement meters used for billing EV charging sessions. These meters must be calibrated regularly and fully visible to EV drivers. Measurement meters that are not correctly calibrated are prohibited under this law.
Eichrecht provides transparency to the customer, ensuring they are only paying for the amount of kWh they charged. This avoids any changes made by the CPO or the EMP to the invoiced amount.
This system ensures the security and transparency of charging sessions, and other countries will likely have to take this path in the future.
The European Commission, which aims to harmonise the charging pricing systems, has adopted AFIR (Alternative Fuel Infrastructure Regulation), which leans towards the pricing model based on energy consumption, to standardise pricing across the EU.
A FEW MORE GREY AREAS
A standard pricing model for the entire EU makes it possible to improve the charging experience for the EV driver, but the real-time display of charging rates on or near charging stations has yet to become common.
The charging rates differ for an EV driver that subscribes to an EMP and one that doesn’t. EV drivers who only charge at the station as visitors pay a roaming fee.
The price also varies according to electricity rates, depending on the time of day or the electricity supplier.
AUTOMATED PAYMENTS & INVOICING WITH THE VIRTA PLATFORM
Once you have chosen the pricing model for your charging stations, all that’s left is integrating it into Virta’s charging management platform. After that, we’ll take care of the automated collection of payments, invoice sending and VAT settlement.