Is It Time to Standardize and Regulate EV Charging Pricing?
By Edward A. Sanchez – Nov. 12, 2021
I recently wrote a post throwing a flag on some of the assumptions made in the study “Comparison: Real World Cost of Fueling EVs and ICE Vehicles” in which the authors claimed that the real-world cost of charging an EV was in fact more expensive than fueling an internal-combustion vehicle. In the time that I published my post, and socialized it on LinkedIn, I was personally contacted by the president of the firm that authored the study. It seems his gripe wasn’t so much with my post per se, but rather the link I included to Car and Driver’s response to the study, which was perhaps a bit more forceful and uninhibited in its opinion.
The main premise of the study was that if EV owners relied on public, networked charging infrastructure for the majority of their charging, they would in fact be paying more than if they were to simply drive a conventional gasoline car.
The study brings up the completely valid point that per-hour or per-kWh charging rates vary drastically across the country, from free, in some cases, to up to $0.69 per minute for Level 3 charging in other cases – or more. If plugged in for 30 minutes, that would be $20.70. For an hour, $41.40. Even at that fairly high rate, that’s still cheaper than 15 gallons of gas at the current national average of around $3.30 a gallon, which would come to $49.50.
At any rate, if you want to read the Anderson Economic Group study line-by-line, click on the link in the first paragraph, in which I include a direct link to the study in my previous post.
But here, I’m going to bring up a topic that might in fact raise the ire of another interest group in the broader automotive and EV universe: With the wide and wild variability in pricing for public charging, is it time to come up with and enforce a national standard and cap on charging rates?
With EVs become mainstream, would there be a benefit to regulating charging rates? (Image courtesy Kia)
Some states are already banning time-based pricing, switching to a per-kWh pricing structure. This is generally agreed to be a fairer pricing structure. But many states have no regulations on the books in terms of how to meter or charge for power at EV chargers, or requirements on displaying or advertising the per-kWh or per-minute/hour rate. Most of the more reputable charging networks display the per-kWh rate on the charging terminal or in the companion app, but not all do.
Before the pundits and cynics erupt with their criticism, let me address a few thorny issues up front. Yes, it is true the per-kWh rate also varies wildly nationwide based on the local utility and how much they charge. In the U.S., the per-kWh rate varies from up to $0.21 per kWh in California, to $0.08 per kWh in Virginia. So imposing a flat-rate number nationwide might be impractical. Also, the per-kWh or per-hour rate is typically higher on public Level 3 chargers due to the more expensive infrastructure involved with installing, powering, and maintaining them, and the charging network company’s need to recoup the high up-front cost of installation.
I’m not asking the public-access (but privately owned) charging networks to be de facto charities. I get it, they’re businesses and they have salary, overhead, benefits, and shareholders to pay and keep happy. But it seems it would ultimately be in their interest if there were some standardization of charge rates, and communication of that to users.
If you were to price it in GGE (gasoline gallon equivalent), let’s break it down. At $0.20/kWh, a gallon of gasoline would be $6.74 for 33.7 kWh. But the flipside is EVs are three to four times as efficient as ICE equivalents, meaning to go 300 miles, in some vehicles, you’d only need about $18 in power. To go the same distance in an ICE vehicle averaging 30 mpg, you’d need $33, based on the current national average.
Certainly, if you were to present things in the context of electric power being $6.74 per gallon, people would freak out, and Fox News and One America News would bloviate about what a socialist conspiracy and boondoggle EVs are. And lost in the conversation is the significant edge in efficiency EVs have.
How would EV adoption be affected by government regulation of charging rates? (Image courtesy Electrify America)
The U.S. is in the midst of a historic transportation paradigm shift. Some are embracing it gladly, and others are fighting tooth-and-nail against it – and cranking up the FUD machine to 11. It seems it would be in the ultimate interest of the EV charging networks, the OEMs, and other promoters and advocates of EVs to clearly show the economic advantages of EVs over combustion vehicles, beyond the touchy-feely feel good of “saving the environment.”
As I’ve said many times, I’m not usually one to advocate for heavy-handed regulation, but in this case, it seems a little standardization and consistency on EV charging rates would be in the interest of all involved.
(Main image courtesy Hyundai)
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