How Much Would You Be Willing To Pay For An L3 Charge?

So how much would you be willing to pay for a L3 Quick Charge and how often would you need it? Assume grid power as a base scenario and $ per KWh is fine for now.

A little background.

Being in Architecture and driving a LEAF has caused me to end up doing a bit of EV "side consulting" as of late. Most Architects and Designers are very progressive, intelligent and have alot of enthusiasm for sustainable projects and technologies. In these circles, the one question that has come up alot lately is the development of charging infrastructure. Not a big surprise for people eager to develop new business/aesthetic opportunities within our built environment. BUT recently in an unrelated project meeting, a random question was zapped at me point blank by a wealthy SoCal developer. He wanted to know how much I would be willing to pay for a L3 Charge for my LEAF??? Uuummm....... I wish I could say that I had a snappy and authoritative answer for him but by the time I was done verbally fumbling around he smiled and said "You don't have a clue do you?". Feeling stupid I pretty much nodded and finally just blurted out "At least never more than the price of gas". Turning back shocked he said "REALLY! You would pay what I paid at the gas station today to drive an electric car?!?". "Sure!", now being authoritative which he seemed to like, "Its a luxury ride, has great performance, doesn't pollute and I wouldn't need a Public charge very often anyways. I still come out way ahead in the end". Now I don't think this guy is used to being surprised, so his blank look only lasted about 2 seconds before a very faint mouse-that-ate-the-cat grin appeared. In hindsight I now realize the gears or a very well oiled business machine were spooling up.

Now when I blurted out my "never more than gas" answer, I was pretty far back on my heels and this was just my worst case scenario (but probably what this guy likes in consumers anyways). So lets hear it! Peoples opinions are probably very different and actually my (ideal) L3 cost is in no way linked to the price of gas. BUT, by (accidentally) establishing a cost ceiling in this conversation, I got a brief glimpse of a very powerful developer that sensed real opportunity at those price levels. This is actually very telling because this guy is from Michigan and about the last person who would be interested in public charging and electric cars. In the end, I guess business... really is business!

Whatever the prevailing power rate was plus 100 percent. I'd probably use it a dozen times a year...

TRONZ said:

So how much would you be willing to pay for a L3 Quick Charge and how often would you need it? Assume grid power as a base scenario and $ per KWh is fine for now.

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I would think it should be based on the KW usage, as the vehicles will all be at different States of Charge, and also, some will have larger packs than others, the Leaf has a 23KW pack, if a Tesla Model S Signature pulls up, thats a 90KW pack, big difference.

I would say 2 times the actual cost of the electricty will be most people limit, so if you take a full charge on your leaf (%80 of 23KW), worse case scenario is 18.4KW + charging losses, say that adds up to another %30, so then we have 18.4 * 1.3 nearly 24KW consumed, charge for 48, at about .15KW, that amounts to about $7.20 for a full charge @ 48KW, without a "Profit" motive, I'm not sure any private developers will pay to install them. that btw is near the price of gas, if you are driving a Prius 100 miles (50mpg, 2 gallons @ $3.50/gallon)

So you'd pay the equivalent of the gas it would take to cover the same distance, so the equivalent of 3 gallons @ $3.75 per (assuming 30 miles per gallon)? If so, then I agree...around $10 for a quick charge would be right about the price point I'd be looking for. Actually it would be closer to $8 because, remember, we'd only be charging to 80%.

For someone who also owns a 50mpg Prius, paying no more than one would spend on gasoline translates to about $4 for an L3 charge, maybe $5 max. Suppose you charge your LEAF from 15% SOC (just below the first "low battery" warning) up to 80% SOC. That will add roughly 50 real-world miles. In a Prius, that would cost about $4 in gasoline.

However, I don't think it would be unreasonable to pay $10 for an L3 charge. For any given, longer trip, we will not be exclusively depending on L3. We will start out by charging at home for not much money. Then we might do some opportunity charging and/or destination charging at L2, possibly for free or cheap. An L3 charge would then get us the rest of the way home in an expeditious manner.

Also, with enough L3 chargers, we personally could even consider downsizing to two cars in the family and selling our Prius, though there are other benefits to having three cars.

Obviously it would have to be based on quantity consumed (like gas is). I'm thinking whatever actual electricity rates + a fair markup. I'm not sure I agree with mogur or abasile that a 100% markup is reasonable, but for sure 25% maybe 50%. Since I figure charging at home would cost me $4, I'd be willing to pay $5 or $6 for the convenience of a quick charge. $10 just seems like too much. Since the cost of running a L3 station should be minimal (cost of goods plus occasional maintenance), a huge markup doesn't seem warranted.

So if the profit margin is $7.50 a fill - which takes about 30 minutes - that's $15/hour margin for each hour the charger is used?

Will the charger get enough use to justify the tens of thousands of dollars the charger and installation costs? What's the likely payback period - assuming this is commercially installed, not gov't funded?

I guess on the upside - that mini-mart selling the juice would do a whooping cigarettes and beer, er - I mean soda and ice cream business while you wait to fill, the the folks behind wait for you to fill.

I think "not more than the price of gas" is a good answer. L3 charge is an occasional use charge, since 90% of the time you charge from your house, or at a destination. So for that occasional charge, I would be willing to pay more than what I pay at home, but no more than what I would if I took my gas car to do that occasional trip. I think if there is a business case for this then it is good, since that would entice L3 infrastructures.

If there were L3 infrastructure to get where I'm going without using my gas car, I would use it at about 2 times per "long range" trip - for there and back. Remember that L3 still takes ~25 minutes, so it's really not practical to use it more than a few times a day...more than that would become an inconvenience, and I would just take the gas'er instead.

I think I would rather have an affordable 300 miles EV, with "gas'er rental infrastructure".

I would be willing to pay $3 for 30 minutes on a DC Quick Charger. Based on kWh, I guess I would be willing to pay $0.14-0.16 per kWh (about double what I pay at home). Paying by time though would probably be more profitable by the station owner since most people won't cruise in on empty...

He's an idiot. He thinks you meant you'd pay the $50 or $60 it cost to fill his gas guzzler to go 300-400 miles. NOBODY would pay that for the 60 miles (max) I could get from a QC. For me, it would be $10 bucks tops unless it was a total emergency.

It currently cost me about $0.04/mile to drive the Leaf based on a $0.17/kwh charging rate, while it cost approximately $0.08/mile to drive the Prius based on $3.8/gallon. I guess I'm willing to pay up to how much it cost to drive the prius, so $0.34/kwh.

However, I think that's the wrong question to ask. The real question to ask is how much margin a EV station need to charge have a viable business model. Currently, gas station operators can turn profit while raking in only ~$0.15/gallon profit margin (so about 4% gross margin), which barely covers his fixed cost and transaction fees. They do this because the real profit comes in the form of selling drinks and snacks in their convenience store.

Obviously, our fledgling EV charging station cannot follow this model completely because the fixed cost may be higher (gas pump may be cheaper to install than L3 charger, and there's likely a limit on how many L3 charge can congregate at 1 station due to the current draw), but that could just mean the station operator need to increase the gross margin he gets from selling electricity to compensate for the higher fixed cost and fewer customer turn-around. On the other hand, he does get a captive consumer for the 20 min it takes to recharge compare to 5min it takes to refill.

the question is "what would it have to cost to be economical for a company to offer it?" and would we be willing to pay that? I'd be willing to pay a premium for the first years until the number of cars reaches a sustained and economical level of use, then I'd expect the cost to drop as competition increases and use becomes more pofitable. for how little the network will get used initially, it seems to me that it will either have to be government subsidized, exorbitantly expensive or some kind of loss leader for a budding company.

At first I'd be willing to pay $10 and a few years down the line more like $4. I would likely only use a charger other than my home a half dozen times a year until the range of EV's doubles or triples. Once the range hits 3-400 miles our family could go 100% EV and still drive all day on a road trip with little inconvenience, in which case fast chargers will be essential and heavily used.

yoyofella said:

On the other hand, he does get a captive consumer for the 20 min it takes to recharge compare to 5min it takes to refill.

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He's going to have use something besides a convenience store if he expects to keep those customers. There's an ARCO station near my house, but if/when they ever get a QC station there, the customers are going to just go to the Taco Bell next door rather than sit around snacking on microwaved burritos.

I predict that fast food franchises are the most likely business to branch out into being QC providers.

davewill said:

I predict that fast food franchises are the most likely business to branch out into being QC providers.

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Interesting variation. I would have thought Starbucks but close enough. We can call this a "Synergy Model".

TRONZ said:

davewill said:

I predict that fast food franchises are the most likely business to branch out into being QC providers.

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Interesting variation. I would have thought Starbucks but close enough. We can call this a "Synergy Model".

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+1

I posted this in the "Jamb this in your Leaf" thread, but it seems to fit here as well, I wonder how much this smaller L3 20/30KW chademo charger will cost.. its physically a much smaller footprint as well.

Small 20KW and 30KW Chademo charger developed by Japanese company, this looks like it could be deployed in European homes with 3 phase, or small commercial business's of course "small and light" are all relative, its still 150 or 170 KG

http://www.nichicon.co.jp/english/new/new113.html" onclick="window.open(this.href);return false;

Credit for the find: "Transport Evolved" podcast, and Nikki Gordon Bloomfield

It depends on alternate options.

Right now, when I'm away from home in the LEAF, I'm either using L2 at a Nissan dealer or L2 at an RV park. So far, everyone's been happy to help. The dealers L2 have been free and the RV parks have charged $10 for whatever I've wanted (including one RV park that let me charge twice for $10).

It's just as important to know where these L3 chargers would be located. Instead of having 15 of them in one urban area, I'd want them spread around major highway intersections. For instance, Los Banos (intersection of CA 152 and US 5). Also, at destination locations, like Yosemite National Park.

If I could get 100% charge in about an hour, it would definitely be worth $10 to $15.

Oddly, today I was transporting myself by walking, and started to think about all things LEAF for a moment, and one of my internal dialogs was about this very matter. I have considered driving to San Diego from Santa Monica, and how I would do it. This led me to pine for some freeway close L3 stations, especially on just before Camp Pendleton, and thought, my current driving pattern rarely require an L2, let alone an L3. That being said, I thought, gosh, no more than $10, as I could easily just drive my ICE sports car instead, and then thought, the L3 would need to be near a good place to hang, like a restaurant.

An then I thought, how can a business model work in this case. And for that matter, why are they $20,000? Then again, that is why I bought a LEAF planning to home charge at L1, but did the EVSE upgrade, and well, have only tested it out to make sure it works. In my instance, most of my charging is L1 at work, L2 when out and about, and not so much at home unless I have a big day of errands planned, and that said, did 90 miles.

It seems that there are many adoption scenarios, and my original highly flawed assumption was that a Nissan dealer network of L3 chargers would just appear. I guess buying the L3 port might or might not work as a charger, but might end up a plastic flower holder.

JimSouCal said:

I guess buying the L3 port might or might not work as a charger, but might end up a plastic flower holder.

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I don't think it will become a "flower holder", there are efforts underway to adapt DC chargers to the L3 port by more than 1 group. This probably won't be at the full L3 rate, but 8-12KW is possible, if a large enough AC source (such as a campground 50A outlet) is availble. The equipment won't be cheap, but in the few thousand dollar range, most likely.

occ said:

I think "not more than the price of gas" is a good answer.

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+1

An EV gives me a great deal on my normal driving. I expect no worse than ICE costs for my exceptional driving, 16 cents per mile based on $4/gal gas and 25 MPG. That's what I'd pay for quick charge, and I believe station operators could make a fair profit. Priced any higher than gasoline and it would be only a (welcome) emergency substitute for a tow truck, and station operators would make much less profit due to drastically lower usage. The optimal price point for operator profits might be something like 20% less expensive than gasoline - enough to entice you to leave your gas car in the garage for your longer trips and patronize their station instead.

This only happens if station operators can buy electricity at wholesale and sell at retail. Imagine trying to make a profit on a gas station if you had to buy your gas supply at retail. Public utility regulators need to allow utilities to sell to EV charging stations at wholesale, or there may be few public charging facilities beyond a handful of showcase "greenwashing" installations. But even if the regulators allow a utility to sell at wholesale, why would it want to do so? Because the availability of a public charging infrastructure for maybe 1% of total charging needs removes range anxiety and dramatically expands the market for EVs. Then the utility sells that much larger population of EVs off-peak power for the other 99% of their (home) charging needs. The 1% "loss leader" power they would sell makes possible the 99%, for which the utility can buy cheap baseline load power and "free" renewable power - excess wind power that would otherwise go unussed.

How might it work for a driver? At parity with ICE driving costs, an 80% 25 minute quick charge would cost about $12, or $5 per 10 minutes. If the station operator wanted to undercut the price of the gas station by 20% to get more business, then he'd instead charge $4 per 10 minutes.

How might it work for a station operator? Suppose a charger costs $40k (Eaton) plus $10k installation, and he pays it off at 8% interest over 36 months. That's about $1,500 per month. Suppose he can buy electricity for $0.07 per kWh (wholesale). If the charger is used on average 10% of the time from 6am to midnight, he will clear about $1,400 per month gross profit. That's almost enough to cover the equipment loan, and then he starts making money after 3 years. Plausible, to establish a business and wait for $8/gallon gas to make the big money.

But what if the station operator could increase his average utilization to 50% by lowering his price below that of the gas station? ($4 instead of $5 per 10 minutes) Then he'd clear about $5,600 per month gross profit, or a nice return on investment right away.

Make your own assumptions for all these numbers. As TRONZ noted in another thread, a $20k quick charger would make for a very interesting business model. I predict that when commercial quick charging stations finally make an appearance we will see quite a bit of price experimentation as operators try to determine what the market will bear.