In the early days of electric mobility, the cost of using charging stations was not the main concern for end users.
However, as the electric vehicle (EV) market grows, price sensitivity will start to increase much like it is for users of traditional fuels.
“To remain competitive, charge point operators (CPOs) must adopt the right pricing strategies to balance price sensitivity with profitability,” the ChargePlanner team comments to Mobility Portal Europe.
But… What is the ideal strategy?
One of them could be based on charging power.
The truth is that EV drivers are sometimes willing to pay more for faster charging because it significantly reduces waiting times and offers a more convenient experience.
In fact, data provided by ChargePlanner reveals that on average, European users are willing to pay 12% more for ultra-fast chargers (150 kilowatts) and even 16% more for high-power units (300 kilowatts) compared to 50-kilowatt ones.
“On average, we see that higher power output corresponds to a higher price. However, this is not the case in all locations nor all countries,” ChargePlanner indicates.
They continue: “When determining costs, it’s important not to look solely at power output, as a fast charger placed in the wrong location will not generate the expected return in revenue.”
For he truth is that prices can increase by up to 40% when charging stations are placed in key locations, based on multiple factors.
In this regard, pricing based on power is not just about offering faster chargers at a higher price.
“It works best when tailored to local demand, competition, station capacity, and nearby points of interest,” the company states.
In summary, to remain competitive, the ideal strategy involves adopting dynamic pricing based on location.
“By adapting to local market conditions, energy availability, and customer preferences, they can find the right price to maximise it on every site,” ChargePlanner explains.
To begin refining pricing strategies, CPOs can leverage data and technology to stay competitive in the face of changing needs with the help of ChargePlanner.
How can ChargePlanner help optimise pricing?
By utilising real-time market data and advanced AI-driven predictive models, ChargePlannerassists in analysing local market conditions and lets you test different prices for your sites in its application.
This way, CPOs can understand customer behaviour, usage patterns of the stations, and local competition to determine the best strategy for each location.
“ChargePlanner effectively maps competitors’ charging station prices, along with other factors such as local activity, accessibility, and car traffic, to determine the impact of pricing changes at current (or future) charging locations,” the company comments.
It is worth mentioning that the users can also maximise profitability by using the predictive models to simulate different pricing scenarios, allowing them to find the optimal balance between price, usage, and revenue.
“We have a case where we tested the impact of a 0.03 euros price increase of a charging station with a nearby competitor. Our simulation indicated that usage was expected to fall by only 1.7%, but that annual revenue would increase by 5.5%,” ChargePlanner indicates.
Why is the market becoming more price sensitive?
There are several factors.
On one hand, it relates to the fact that there is an increase in the number of electric vehicles as they are no longer limited to wealthy or corporate sectors.
With over 15% of new registered cars being Electric today in Europe, a more diverse range of drivers is entering the market.
The European Alternative Fuels Observatory (EAFO) highlights that with the growing adoption of EVs, especially in the EU, charging costs are becoming a key concern for the average user.
Another factor contributing to increasing price sensitivity in the market relates to the rise in public charging costs.
While home charging remains the most affordable option, public charging prices across Europe increased in 2023 due to rising energy costs and operational expenses.
Public charging points, especially fast DC charging stations, tend to be significantly more expensive compared to home charging.
This is why more than 70% of electric vehicle charging occurs at home or at work.
Finally, another factor is the introduction of the Alternative Fuels Infrastructure Regulation (AFIR), which mandates transparent pricing and simple payment options at public charging stations.
Want to discover more? Check out ChargePlanner’s upcomingwebinar
The company will conduct a webinar that will equip the audience with knowledge to optimise their pricing strategy, increase profitability, stay ahead in a rapidly evolving market, and prepare their business for the future.
The webinar will take place on October 17, from 11:00 to 11:45 am.
What topics will be covered?
- What is the current market situation?
- What are the most profitable locations for your chargers?
- Which type of charger is most suitable for each location?
- How to leverage the right pricing strategy?
No time for the webinar? Download ChargePlanner’s whitepaper here.
