Electric Cars
Will EV Charging Prices Go Up As Demand Rises
Electric cars according to Joe Biden's 2020 policy documents are set to become substantially more common in the US in the coming years Biden's administration is looking to add half a million electric charging stations around the country by the year 2030.
As well as ensuring we're driving the cars that will keep those stations busy but how much will using these alternative refueling stations cost in the future there are several main barriers to electric car ownership right now they include the initial outlay which is high for the comparable gas-fueled.
market but falling there's also an issue with the availability of charging stations and with charging taking too long to be convenient for certain types of drivers what you get in exchange as well as green credentials is what is currently very cheap mileage while prices vary quite widely a 2018 study from the University of Michigan's.
Transportation research institute found that after your initial payout electric vehicles typically cost comfortably less than half as much to operate as gas-powered cars the average cost to operate an electric vehicle in the united states they say is 485 dollars per year while the gas-powered vehicle is 1117 dollars per year.
that's not been enough to draw in users Just Eet however only just under 1% of all new car buys between 2011 and 2019 in us were electric and 40% of those were plug-in hybrids not full-electric models as issues around batteries charging and price start to resolve themselves as electric vehicle technology advances though will benefit like cheap mileage disappear too it's hard to predict the economics of something so multifaceted and there are arguments on both sides of this particular coin for a number of reasons though many economists say yes charging prices will increase the obvious reason for the cost increase is the capital outlay required to set up charging stations.
while at home charging stations can be relatively affordable in many cases under one thousand dollars even low-end commercial setups started around 30K dollars and that money will need to be recuperated the high cost of commercial operations come about because they need far more substantial power supplies and fast charging equipment which is far steeper than a single home installation there'd be the little point after all to an overnight charging station at the side of the highway a border argument though goes to basic economics historically.
new technologies even where substantially cheaper than what they are replacing have been priced at a little under the going rate for their most direct competition this fits in with the concept of competitive pricing in economics which essentially says that a new entrant into the market should base its pricing on more established companies as it's already proven that the exiting pricing is acceptable to consumers
the concept of competitive pricing is often combined with the idea of market penetration which argues that you can enter an established market strongly by pricing a little under that of your nearest competitor eventually the main competitors will be within the electric charging industry the likes of Tesla and Lucid's operators as well as charging specific third parties like to electrify America right now though the main competition is quite definitely still in the gas market.
market penetration will be important to companies looking to sell energy through electrical charging stations as for many consumers an economic argument will be more powerful than a purely green argument in persuading them to switch to electrical power that does mean that electrical charges are likely to remain cheaper than gas options at least on a mile to cost basis but as electrical cars grow in volume the prices are far more likely to be closer together than the difference of more than 50% that exists now it's the same economics as pricing in restaurants typically.
for example, a vegetarian burger is far cheaper to produce than its meat equivalent nevertheless its pricing is often very similar if not slightly higher the price point is set as much by customer expectation and willingness to pay it as it is by the actual cost of the item concerned regardless of the cost of producing and selling an item or a service it must be priced at a level that's competitive for the market and for the region that might mean a reduced profit margin in some cases
but business people see both sides of that particular coin as an opportunity to sell at a fiercely profitable price point as it's the going rate will not be sniffed at think about how coffee places tend to flock tightly together in price in any one area for example despite the industry offering huge profit margins on the coffee's cost price like the electric car charging example as well as aligning with each other coffee shops will often price similar products such as tea or hot chocolate at a relatively comparable price.
bracket with electric cars expected to grow hugely in market share in the coming year's supply and demand will also prove a big price factor charges are at a premium now but relatively few drivers are competing for there use that amount of drivers is expected to grow considerably probably faster than the supply of charging stations basic supply and demand economics dictates that scenarios like this almost always lead to price increases.
it'll also be harder to supply large volumes of electric cars while the cars are able to charge at they also take far longer than a quick stop at a gas station to refuel even a high-speed charging session is likely to run over an hour so far higher availability of chargers per car would be needed in this scenario the sheer cost of the land more akin to a parking lot than a gas station also becomes a more significant factor in California.
queues of over 100 cars formed at tesla recharging point in December 2019 as charging capacity became an issue in early 2021 reports in the UK suggested charging black spots were a growing problem especially in rural areas it's estimated 10 times as many charges are required in the UK in the title a concern that's particularly important in a country with explicit plans to ban new gas cars from 2030.
these are the basic factors that all suggest electric car refueling is likely to increase in cost, of course, there are still other areas of influence here it's currently possible to buy premium gas and in the future for example it's likely to be possible to buy premium electricity to charge your car most specifically power.
that comes from a renewable source is likely to be in demand as it helps back up the green claims around electrical cars then there are more straightforward factors too including the level of competition between charging company which eventually will become more important than the competition with traditional gas stations there is one more key aspect to consider them we do have to take into account the charge at home electrical supply which aside from setup costs is likely to remain linked to the cost of your domestic electricity this is distinct from potential charging stations across the country as it doesn't require the same speed of charging which in turn requires expensive charging stations and high powered electricity supplies that do mean that in the future it's likely there will be a two-tier scenario around the charging of electric cars.
there'll be the option at homeless convenience and with a higher initial outlay but with lower charging costs then they'll be the commercial market at a much higher price and available on the move those in the know in the industry are expecting a lot of in-between type models too like top-up stations at retailers or offices designed to supplement charges at home the USA government will according to Joe Biden's current policy intervene in the development of these on-the-go stations to some degree.
their aim though seems to be predominantly seeding the industry and pushing it towards a wide use tipping point as for the pricing there's even an early example of those predicted increases in the UK a company called entity which provides charging services switched in early 2021 from charging a flat rate of around 11 dollars per charge.
to a fee based on energy consumed the new fee could hit 62 dollars per charge depending on the size of your battery for fast charging on the road that's a mammoth change by any measure any economic prediction naturally is open to all kinds of outside factors from levels of government intervention to changes in technology accessibility and consumer behavior based on the usual economic predictors though the cost of charging an electric car looks set to rise to something closer to the current cost of gas at least that is where you'll bind your new form of fuel on the go so with the main financial aspect of going electric likely to go in opposite directions does it appeal to you Electric cars.
