Evolving EV Charging: Embracing Dynamic Pricing Models

When Jeffrey Raun takes his Tesla Model 3 on long trips from Anchorage, Alaska, he faces some of the priciest public charging fees in the U.S. For instance,charging his battery from a mere 10% to a robust 90% at a local grocery store in Chugiak can set him back about $32—nearly three times what he pays at home.

“We’ve made our choice to go electric and we’re committed to charging whenever necessary,” Raun shared. “I genuinely believe I’m still saving money with my EV.” But soon enough, he and other electric vehicle (EV) owners might see their costs fluctuate wildly as fast-charging networks introduce dynamic pricing models.

A staggering nearly 40% of the nation’s roughly 10,700 public fast-charging stations have begun adjusting their rates frequently based on various factors like weather conditions or holiday traffic spikes.This approach mirrors traditional gas station pricing strategies that analysts suggest could finally lead these struggling networks toward profitability.

This price variability could also benefit consumers by easing congestion during peak hours while offering significant discounts for budget-conscious drivers—especially those working for rideshare services like uber or Lyft—during off-peak hours.

the Price Rollercoaster

Take such as an EV driver using an EVgo station near Denny’s in Rancho Cordova, California. If she charges her car between midnight and six in the morning, it’ll cost her around $35 for a full charge of about 70 kWh. However, if she waits until later in the day—from one to nine p.m.—that same charge jumps to approximately $48—a hefty increase of nearly 38%!

This new pricing strategy is not just unique; it’s essential for adapting to changing market dynamics. While many companies have been hesitant about altering prices so drastically, EVgo has embraced algorithms that continuously adjust rates across its network.

The company recently reported that this dynamic pricing has significantly increased overnight usage at its stations—a time when they previously saw little activity—helping reduce crowding during busier periods.

“Our goal is clear: maximize profit margins,” said CEO badar Khan during a recent conference call. “We’re not reinventing the wheel here; we’re applying accomplished concepts from other industries into our own.” Analysts like Chris Pierce from Needham & Co., view this shift as a game changer within the industry.
“It’s definitely effective,” he noted confidently. “With more EVs on roads than ever before but insufficient infrastructure available.”

Tesla also employs similar dynamic pricing across its network of around 2,500 U.S.-based fast chargers while companies like Driivz are promising revenue boosts through their innovative models worldwide.

“Dynamic pricing is gaining traction,” remarked Oren Halevi from Driivz’s team. “It’s simply an excellent way for networks to enhance profitability.”

Navigating Confusion

The challenge remains that public charging continues being one of the most frustrating aspects of owning an electric vehicle—and unclear pricing only adds fuel to that fire! A recent J.D Power survey revealed dissatisfaction among drivers regarding fast-charging costs scored only at429 out of1 ,000 points!