According to Google Maps, the Mobil gas station located at 8489 Beverly Blvd in West Hollywood is surrounded by charging stations for electrical vehicles. This isn’t surprising because the number of EVs in California is increasing, and this particular area is ideally located at the intersection of two main arterial roads in Los Angeles: Beverly Blvd and La Cienega Blvd. This image raises an important question: are these charging stations competing with gasoline stations?

Bhulu Ahmed, the Mobil station’s owner, said that he hasn’t seen any change in his business over the past few years. “To be honest,” he added, “I do not see many EVs around here.” He explained that he has been working in the area for almost thirty years and, although the number of EV drivers has increased, he still serves the same number of customers as usual.

He hasn’t experienced significant changes in the cost of gas, either; that day, the price of regular gas was $4.49 per gallon. Certainly, an EV driver might claim that that price is much more expensive than what he pays to recharge his car.

According to research conducted by Michigan University, based on average yearly mileage of 15,000 miles, an EV driver pays about $540 per year to charge his car, rather than the $1,400 per year paid by the driver of a gas-powered automobile. These significant savings do not factor in that many EV drivers can charge their vehicles for free.

Despite charging stations being so convenient, and sometimes even free, there is still an issue that could kill, or at least curb, the expansion of electric vehicles: the undefined business model of these charging stations. Currently, every EV charging station charges different prices, which vary depending on the type of connector, the equipment features, and the area where it is located.

It is unknown whether EV charging stations will replicate the gasoline station’s business model, or whether the electricity offered for free by many plug-ins’ owners could prevent entrepreneurs from opening stations where drivers must pay to charge their vehicles.

The business model of EV charging stations is still clouded; perhaps this is one of the reasons why, although surrounded by EV charging stations, Bhulu Ahmed has not experienced a decrease in his business yet.

 

It’s complicated

     According to PlugShare, one of the most popular apps that allows users to find and review charging stations, none of the five charging stations close to Ahmed’s Mobil station have the same connector type or charges the same price. The closest one, at the Sofitel Hotel, has two J1772 EV plugs that cost $18 to use, once under six hours of parking is purchased. Another charging station in the area, at the Elan Hotel, has a Tesla plug type and the J1772. Unlike the Sofitel, the Elan does not require parking payment but only charging payment. Nearby, there are also charging stations at Trader Joe’s; there, drivers do not pay for parking, but they have to pay a fee for the charge through Blink, a network of charging stations for EVs. Moreover, people reported on PlugShare that they had problems at this location, because drivers of gas-powered cars park in spots reserved for EVs, and because of most of the chargers were broken.

From this, it is easy to see how an EV driver might experience many kinds of payment models in just a few miles. To avoid these issues, some people purchase their own charger. Once the initial installation costs, which are decreasing thanks to government incentives, have been paid, drivers can then charge their cars whenever they want, solving both the “range-anxiety” and the payment issue.

The differences among EV charging stations are numerous: some charge by the kilowatt hour, others charge drivers per session, others require drivers to purchase a subscription, allowing them to charge their vehicles wherever they want at uniform prices, and lastly, there are free charging stations.

“The cost of the electricity is determined by the owners of the charging equipment. Some choose to charge. Some offer free charging as a customer incentive. Some fold the cost of the charge into parking or HOA fees,” stated Jennifer Allen, the supervisor of the zero-emission vehicle and infrastructure office within the California Energy Commission’s Fuels and Transportation Division. Moreover, the owners determine prices also according to the type of charger level; a level 2 usually requires between $1 and $5 per session, while the DC fast-charging plug-ins require drivers to pay higher prices for the convenience of charging their cars in a very short time.

PlugShare’s CEO, Brian Kariger, explained how payment methods work in EV charging stations: “Station owners and operators choose pricing. For example, if you own a parking lot you could choose to purchase a charger from SemaConnect, one of our partners, and once it was installed in your lot, you’d log into a website to set pricing as you see fit. Your station would then appear in PlugShare, and drivers would enter their credit card information into the app to pay and be on their way.”

Some malls, supermarkets, and stores have chosen to offer free electricity because, as Kariger said, “some businesses install charging stations to attract customers.” Sorean Kim, a woman I interviewed at The Grove, said that she was taking advantage of the free charging station while shopping: “I found free places near my work and my home and actually my commute is not so far, so I do not have to charge my car very often.”

 

Not yet defined

   Might the free charging station model endanger the emergence of other models as well as the expansion of EVs? When I asked if they see a potential long-term business model based on charging EVs with free electric power, each of my interviewees answered that actually it is very unlikely.

Jennifer Allen stated that there are even gas stations selling electricity for EV vehicles right now. Indeed, even though it seems that the free charging station model is still growing, “free stations aren’t always the best option.” Indeed, from its data analysis, PlugShare found that drivers are willing to pay for features like faster charging and for being able to plug in at convenient locations along the highway during a long-distance trip.

In the last year, there has been a huge increase in the number of electric cars registered in the United States, especially in California, where there are many new programs and government incentives to encourage drivers to convert to EVs. Lisa Chiladakis, manager at Veloz, a Sacramento-based non-profit organization dedicated to increasing awareness about EVs, told me that the California government’s goal is to have 1.5 million EV drivers by 2025.

Thanks to the increased number of EVs and charging stations, new business models are being developed, even though there are free charging stations available. They range from the home-model, the networking-model pursued by companies such as ChargePoint, Blink, SemaConnect, eVgo… and the super-fast-charging model. As Brian Kariger pointed out, “one of the effects of having all of these less expensive, and in some cases consumer-owned, distributed energy resources is that it is opening up the energy business to more open models; for example, peer-to-peer energy trading. Electric vehicles themselves are mobile energy resources, and there are already pilot programs underway in which utilities and grid operators pay EV drivers for sending energy back into the grid. So not only will EV drivers be able to get reduced rates or free electricity, they will be able to sell energy to others as well.”

Overall, it seems that electrical vehicles are slowly reshaping the gas station business model that we are used to; we do not know yet which model will be the winning one, but surely many others are yet to come as the industry continues to evolve.