Price transparency for EV charging has been top of mind for market parties and government bodies for several years now – how can we accurately tell consumers before, during and after they have finished charging what the price of their session has been? The comparison is often made with the petrol station model, where the price per litre and the rolling price is shown directly at the pump; while this is comparing apples and oranges when set next to a low cost AC charger in an office parking lot, the concern about transparency towards consumers is a valid one.
What is not talked about nearly as much is how transparency should not end with showing the user what they pay, but also making this depend on the actual cost of the resources. By exposing the consumer to the real cost of energy, pricing signals can help stabilize energy markets in the most transparent way. It will also help drive general costs down, as price increases at the bottom of the value chain are not masked or lost in aggregation and cost-price-averaging at the end of the chain.
Price Transparency Basics
The European Union mandates EV charging price transparency in the Alternative Fuels Infrastructure Regulation (AFIR). While this law is enforced (and to a certain extent implemented) differently in each member state, the basic requirement is that prices can be easily found by drivers before their session, and the final price must reflect the rates that were shown to the driver beforehand.
Since most AC charging points are low-cost devices without any display screen, transparency can either be achieved via and app or website, or a physical sign or sticker on the charger. The latter is simply not scalable in the context of today’s volatile energy markets, so the app-based approach is certainly preferred in today’s market. Service Providers such as Tap Electric connect to public charging networks to provide access to their drivers, and receive information from the infrastructure operators so that they can display price information in the app.
Tap clearly shows price information on the charger, and directly in the map view for quick direct comparisons for chargers in the area.
Tap goes one step further and also calculates real-time costs during a session so that our drivers can see how much they have paid so far, and even offer a maximum price limit feature so that we can stop the session once your limit has been reached. Of course, we immediately provide the session receipt after completion, rounding out the full solution for price transparency.
Price Transparency Challenges
Like any new market, there are a wide array of pricing schemes deployed by network operators throughout Europe. Since the core business of a Service Provider is to provide seamless interoperability for their drivers, it means that they must communicate with many different operators throughout Europe to receive and display pricing information. While we have open protocols to achieve this, poor or limited implementations and legacy systems hinder the market as a whole. In practical terms this could mean several things:
Operators cannot share tariffs in real-time, forcing service providers to update prices by hand
Operators do not share real-time session information, so prices cannot be calculated during a session
Operators delay sending transaction info after the session is complete, or send transactions without a final price
Although not directly related to price transparency but rather transaction security, Operators do not allow drivers to start a session from their app, forcing them to use an insecure RFID card.
Of course, the above shortcomings could also be on the Service Provider side. In any case, this lack of proper technology from different market players means that many compromises are made at the expense of the driver – many service providers have accepted that they will provide a subpar service to their drivers so that their marketing teams can advertise how many chargers can technically be accessed with their card.
At Tap, we believe in the mantra of quality over quantity. We guarantee a uniform service for our drivers. That means that no matter where you charge, you will always have the same information and features available in the app. We pride ourselves on having great partnerships with many network operators that help us deliver this uniform experience to drivers.
Murky Markets
There is a trend with Service Providers to solve the price transparency challenge by offering flat rates to drivers. That means that they are buying energy from Operators at a wholesale rate, and absorbing any profits or losses from the difference between their flat (retail) rate and the wholesale price. We’ll be blunt here: this model is just not good for our market. From a pure price perspective in a volatile energy market, a fixed price model means drivers are either being charged really unfairly, or Service Providers are taking huge losses for the sake of some market share. Not only is this business model completely unsustainable financially, but it also goes against the ethos of the energy transition, for which our first best option is controlling demand. This requires that the supply side, I.e. Operators, are able to appropriately signal demand side, I.e. drivers, for when the best time to charge is, and the easiest way to do that is with a price. By removing drivers from market exposure, we lose the most valuable signal we have to help drivers know when the best time to charge is. Further, we also reduce the incentive for Operators to drive down their prices to compete with each other – if end users are not price sensitive, of course the demand side will keep prices as high as possible.
Tap is committed to complete price and market transparency in our journey towards energy transition, and we hope others will join us.