The Billing Challenges Behind a Seamless EV Charging Experience
One of the key factors of the seamless charging experience every EV driver wants is easily making payment, however billing for EV charging presents a slew of challenges. Paying for gasoline has always been easy. Swipe your credit card or pay cash. That’s the level of convenience EV drivers want. However, the world of EVs is more complicated. Most drivers pay through an app (sometimes several apps) when they’re not charging at home. They need to register and provide their credit card information for each app they use. However, many drivers don’t like apps and prefer to use RFID tokens they get from their service provider when they sign up. And there will always be those drivers who get to an out-of-network charger, and just want to swipe their credit card (assuming the charger has a card reader, which is not always the case).
While that seems fairly simple, it hides the enormous complexity of what happens behind the scenes. Billing EV drivers and reconciliation with partners are two of the most complex aspects of running an EV charging business. The wide variety of use cases and business models together with the different players in the EV charging value chain make for an incredibly intricate matrix of variables that must all be covered by the EV charging management system.
The most basic EV charging billing scenario
Let’s start with a simple example and consider a fictitious EV service provider (EVSP) called Zcharge. Zcharge has a few AC chargers at a parking lot they own and a number of drivers who are all subscribed to the same plan ($0.99 session fee + $0.60 per kWh). Let’s make up a name for this plan and call it PAYC (pay as you charge), and drivers use an app to initiate charging.
This is pretty easy. Drivers register and enter their credit card information in the app, so Zcharge knows exactly who charged up where and for how long, so billing them through the payment gateway is straightforward. After each charging session, Zcharge issues an invoice which the driver can access in the app. But let’s not kid ourselves – this scenario is way too simple to be realistic.
Growing complexity of charging scenarios
Here’s a more complex scenario. Zcharge manages chargers at multiple parking lots. Some are owned by other companies (hosts). Each property contains 2 or more groups of chargers at multiple sites. As an incentive to increase usage, Zcharge offers a subscription plan (we’ll make up a name for this one too and call it PAYS) that adds a flat monthly fee, but cuts the session fee, and allows reserving a charger, but reduces the cost per kWh. Zcharge has a settlement contract with each host that lays out the terms under which the host gets paid by Zcharge for hosting its chargers. Each contract may be different. Here’s what this looks like.
But even this is an over-simplified model, and in practice, few if any EV service providers have it this easy when it comes to managing billing for EV charging.
The reality of EV charging billing
It’s time to get real. Clearly, 2 subscription plans are not enough to satisfy the wide variety of drivers that Zcharge wants to serve. They add more plans with variations on the flat monthly subscription fee, reservation fee and per kWh charges. While most drivers get billed directly for each charging session (immediate payment), Zcharge offers monthly billing (post-payment) for customers who prefer that mode of payment. And since they have added fast chargers to their network, they need to account for those in each plan. Moreover, Zcharge realizes that its operational costs are different according to the location of specific chargers (consider different US states or neighboring EU countries). And to incentivize charging when energy costs are low, the per kWh charges vary at different hours of the day (“time of use” considerations). To attract customers, Zcharge wants to try different tactics and offers sign-on promotions like “free reservations for the first three months,” or “First $10 of per kWh charges included.” Naturally, when the promotional plans end, Zcharge has to automatically rollover its new subscribers to one of the standard plans. And, of course, the settlement contracts with their host partners have to reflect the different promotions being offered. Since Zcharge knows some drivers can’t or won’t use an app, they start issuing RFID tokens drivers can use to charge, being careful to assign the right token ID in their back-office platform to each driver who gets one. And while we’re at it, in addition to an app, Zcharge also wants to offer its customers a flashy, inviting, and convenient web portal. A great new way to engage with customers.
So now, we’re looking at something like this.
Factors in the equation
With Success comes complexity in EV charging billing
Let’s keep going. Zcharge is growing its market share and working with fleets. In this case, instead of billing individual drivers, Zcharge runs monthly billing cycles to charge the fleet company, however, the prudent fleet operator wants to see details of each driver’s charging activities. On the other hand, fleet drivers who take their company EV home want to be reimbursed for charging it up for another day’s work. And then, a company may provide a perk to certain employees, allowing them to charge onsite at the company’s expense – this is known as “Entitlement”. Zcharge is happy to accommodate and expand its business to work with companies. And what if one of Zcharge’s hosts is a supermarket that wants to attract business by offering EV charging coupons? This is a win-win-win proposition that Zcharge must support. But why limit yourself to registered customers? Anyone who wants to charge at one of Zcharge’s stations is welcome to do so – but they will pay a premium according to ZCharge’s One-Time-Payment (OTP) plan. And now that Zcharge is showing success in the market, it wants to enter into roaming agreements with other EV charging networks to expand its reach.
Let’s take another look at the growing list of factors in this equation:
The beauty in the complexity of EV charging billing
While Zcharge’s billing operations already look very complex, this is really only the beginning. There are so many more factors needed in the EV charging billing equation to support the huge variety of use cases. There can be flat fees, minimum fees, maximum fees, and overtime penalties. A service provider that operates across borders may have to support multiple currencies. And what about reconciliation with hosts? Is there a minimum term for a host contract? Is there an early termination fee? The list goes on and we haven’t even discussed the dunning process. The point is that EV charging billing is extremely complex. But the beauty of it is that the flexibility to accommodate all this complexity creates a competitive advantage.
Each EV service provider will encounter their own challenges in EV charging billing. To learn how Driivz’s EV Charging and Energy Management platform overcomes these challenges, reach out to one of our experts at [email protected].