As electric and plug-in hybrid cars enter mass production in the next few years, the question of where and how these cars will recharge is on the minds of many an EV entrepreneur. The EV service start-up Better Place is just one of several seeking to roll out electric charging station networks across the country that would charge to charge, so to speak.
But given the low cost of electricity, a primary reason many are predicting a surge in popularity for EVs, business models predicated on selling electron fuel for the vehicles may fall prey to a scourge of contemporary capitalism — the spectre of free.
The problem, if it is one, lies in the fact that many businesses that would install chargers might decide it makes business sense to provide electricity for free, reports Michael Kanellos in Greentech Media:
What makes the idea intriguing is the math. Compared to gas, electricity remains a bargain. A kilowatt hour of power costs around 11 cents on average in the U.S. An all-electric into a standard 110-volt, high-speed charger for an hour might only suck down 15 cents of power. The tab might come to $2 to $3 a 240-volt high speed charger but in that hour a car could get enough energy to go 100 miles.
Restaurants, outlet stores, banks — basically any business with a parking lot — could use free electric charging as an additional incentive to shoppers, and a way to build brand loyalty. Costco already offers free EV charging at its stores.
Tesla Motors, in conjunction with Solar City, the solar power installer, and Rabobank Bank, is building charge stations along Rt. 101 between LA and San Francisco. Currently, a charge is free to Tesla owners, as they are the only ones with the correct sockets for the chargers. The plan is to charge for other cars once the equipment is available.
But it will be difficult to really make a profit this way, when consumers have access to information on places to get electricity freely. EV Charger News has a charger finder that maps available plugs in several states, including California, Arizona, and Georgia.
Of course, not charging for power has its own pitfalls — the equipment itself costs around $30,000, a disincentive for any small business owner to provide the service for free.