Electric vehicles are expensive to purchase, but you save a lot of money powering up on cheap electricity rather than expensive gasoline, right? Ah, those were the good old days.
As companies experiment with the way they bill vehicle owners for using chargers at public networks, guess what? The price is going up a lot, and narrowing electricity’s advantage over gas.
Ivy Charging Network, a joint venture between Hydro One Ltd. H-T and Ontario Power Generation, earlier this month introduced per-kilowatt-hour pricing as a pilot project at its ONroute locations along major highways.
That means Ivy will bill drivers based on how much energy they use, rather than the previous model that was based on how long they took to charge. The change follows a ruling from Measurement Canada, the federal agency that oversees these sorts of things, earlier this year that gave network owners some flexibility in their pricing models.
In theory, this is good news, and I expect other networks will introduce a similar approach. As any EV owner knows, the price for charging a car can be a mystery when you pay for time. As I discovered this summer, a malfunctioning fast-charging station that delivers energy at an unusually slow pace can result in a bill that is easily as high as the gas equivalent.
Billing for the energy delivered, rather than the duration of the charging session, solves this problem. You know upfront how much you will pay, and comparisons are a snap. The change makes EV charging look more like pumping gas – where, of course, drivers pay by the litre.
The problem? The price for charging an EV is going up.
Ivy’s rate is 62 cents per kWh, tax-inclusive. That means that a full charge of my EV’s battery – 58 kWh, if you want to check my calculations – would cost me about $36. That gets me a range of about 400 km in my Hyundai Ioniq 5, under ideal conditions.
Ivy’s previous policy, based on time, could deliver the same charge for under $16. In other words, I’m facing a price increase of 125 per cent.
Now, let’s do some comparative shopping, starting with gas. If an average gas-powered vehicle can travel 100 km on 8 litres of fuel, my 400-km range would cost the equivalent of $51.20 in gas (assuming a cost of $1.60 per litre).
So, yes, my dollars go further in my electric vehicle using an Ivy charger. In this example, I’m saving $15.20 on a full charge – compared with gas – or about 30 per cent.
I hate to sound greedy here, but this is disappointing. I’ve always calculated the true cost of my EV by taking energy savings into account. Initially, I figured I could save roughly $1,000 a year by powering my vehicle with electricity rather than gas, based on driving about 12,000 km a year.
That would knock $10,000 from the vehicle’s $50,000 sticker price over 10 years. These savings can make the total cost of EVs look more compelling compared with gas-powered cars. The more you drive, the bigger the savings.
But if I always charged at Ivy, at 62 cents per kWh, I estimate my savings would shrink from $1,000 a year to $500. That’s a big gouge, given the alternatives.
At a charging stop at Petro-Canada near Kingston this summer, I paid $7.98 for 26.4 kWh. That works out to 30.2 cents per kWh, or less than half Ivy’s price.
Anyone charging at home in Ontario can pay an overnight rate of 8.7 cents per kWh (not including delivery and taxes). At my nearby street-side charger – which is not a fast charger – the overnight flat rate is $3 (also before tax), which translates to just 5.2 cents per kWh for a full charge. Even the regular price of $2 per hour at this same charger translates to $16 for a full charge, or still less than half of Ivy’s price.
I know what you’re thinking: Boo-hoo. Dude signed up for a fancy EV and now he’s whining about the rising cost.
In some ways, I can sympathize with Ivy’s pricing. It’s a free market. Building out a fast-charging network is expensive. In my case, I only used fast chargers on road trips. And, as I’ve argued before, if companies can make charging profitable, they’re more likely to expand their networks and improve the charging infrastructure for EV owners.
A spokesperson from Ivy said as much – I think – in an e-mail: “Our pricing is competitive compared to the majority of other fast-charger networks in the province and reflects what is needed to build and maintain one of Ontario’s largest and most connected electric vehicle fast-charger networks.”
I suspect most EV owners will welcome the new approach because it is more transparent.
But they could grumble over the rising cost. Road trips, which generally require highway fast charging, could cost more if other networks introduce similar pricing. Anyone whose regular commutes rely upon fast charging might be less inclined to turn to an EV.
At a small fraction of the operating cost of a gas-powered car, EVs can make a lot of sense for drivers contemplating the switch. But if savings slide from 90 per cent to 30 per cent? I fear that many drivers may just shrug and stick with gas.