Does cheaper charging increase utilisation at chargers?
I've talked about this before on the podcast and here on Substack. Everybody complains about the high cost of public charging. But very few people seem to make the effort to find cheaper charging. I always find that an interesting conundrum.
The flip side to this is that there are bargains to be had when looking for cheap charging. But nobody seems to be taking advantage of them.
For example, the InstaVolt Winchester hub. 44 chargers, excellent facilities and - for the majority of the summer - a discounted rate of 50p/kWh if paying with the Instavolt app (54p/kWh if paying ad-hoc with a credit card). That's cheaper than day time Tesla charging for non-Tesla drivers! Yet, I've been monitoring usage at this site and - since the week it opened, when interest was at an all-time high - I've seldom seen more than 7 of the 44 chargers in use and generally see around 5 of them in use. In fact I went to the hub on the August Bank Holiday Monday (traditionally the busiest time on the roads in the UK) and over the 90 minutes in the late afternoon I was there I saw between 5 and 7 chargers in use at any given time. That's a utilisation rate of around 15%, which is higher than average but nowhere near what I would expect for a CPO that has reduced their charging tariff by 42%!
On the other hand we have the AW Energy Checkley Wood hub near Leighton Buzzard. 35p/kWh for ultra rapid charging, 24/7. According to John Fairley, CEO, the utilisation for this site quadrupled when they announced the cheap tariff. But he also told me that this was at the expense of another nearby site they had which stayed at the original rate in the mid 70p/kWh range. So they, effectively, cannibalised their own customer base and didn't change overall utilisation.
I've also spoken with representatives at bp Pulse who told me that they dropped their price for ultra rapid charging at the Reading Westbound MSA down to around 43p/kWh last year. Utilisation stayed the same.
So what's the problem?
Well, the issue is that people don't really want cheap charging. They want convenient charging. Convenience means using the chargers in MSAs when travelling long distances. By definition this is a captive audience who will pay whatever tariff is being levied for rapid charging. With Gridserve this is 85p/kWh and with Applegreen it's around 79p/kWh.
But they could quite easily make a small detour off the motorway and find something much cheaper if they really wanted. For example, just off the M1 near Leicester is the brand new Ionity hub at the Leicester Hilton which, with a subscription offering, can be accessed for 43p/kWh - half the price of Gridserve!
The same thing at Carlisle up the M6. Instead of stopping at the Todhills MSA you can come off a junction earlier and head to the Ionity hub at Starbucks, Carlisle.
Further South, instead of using the Gridserve hub at Exeter services you could take a small detour at the same junction to the public Tesla Supercharger at Darts Farm and pay 52p/kWh.
So the bargains are there if you want them (and are willing to take a minor detour to get them)
I also want to address the 'Dombey Proclamation'. This is named after Abigail Dombey who lives in Brighton, has no home charging, and is at the mercy of the only company providing pavement charging in that city at the moment - Blink. Whenever I make statement such as 'people charge by convenience not price' she, rightly, chastises me for not considering people like her who don't have cheaper options available. In this instance she is correct. There are no cheaper options in Brighton at the moment - especially for off-street charging (although, again, Ionity have a small hub on the Brighton to Lewes road that is cheaper than her pavement charging tariff with Blink). The good news is that Char.gy are coming to Brighton shortly and will, no doubt, be implementing their 39p/kWh overnight rate at their units.
Will it provoke a price war? I doubt it. But it will give people like Abigail an option for charging.
More importantly, will it increase utilisation? Possibly. In fact something like this will have a detrimental effect on utilisation for Blink and a slightly positive effect for Char.gy. This will be a situation where a limited number of customers in a given space will make their choice of ‘Do I want to charge at the on-street charger closest to me, or pay a little less and charge further away?’ Again, it’s the convenience issue that will probably determine this. Is it worth a discount on your charging tariff to have to walk 400 yards further and try to find parking on an adjacent street?
Time will tell.