Fuqua professors say dynamic pricing based on wait time would benefit both companies and drivers
The researchers show that a dynamic-pricing model based on the wait time at the station would create more revenue for the companies and also benefit consumers. Image: Shutterstock C harging station congestion has been invoked as one of the drawbacks preventing a wider adoption of electric cars—along with range anxiety and vehicle price tag. While opening more stations could address the congestion problem, a deeper issue may lie in the inefficient business model of the EV charging points, said Professor Kevin Shang of Duke University’s Fuqua School of Business. Related stories Log9 is making India's first EV cells. Can it take on China? Arun Vinayak at Exponent on solving the 'two-sided problem' of fast charging for India Log9: Holding the key to India's self-reliance in critical areas of the EV sector “Why aren’t companies building more fast charging stations? Very simple, because the land can be very expensive, and the received revenue may not cover the investment and operating costs,” Shang said. Currently, most fast charging stations apply a flat fee per minute of charging, he said. But in a paper published in the Journal of Management Science, Shang and co-authors Peng Sun of Fuqua and Purdue University’s Chen-An Lin, a Fuqua Ph.D. graduate, argue that the flat-rate approach is not optimal. The researchers show that a dynamic-pricing model based on the wait time at the station would create more revenue for the companies and also benefit consumers. “If you increase the revenue, you can help the companies build more fast charging stations,” Shang said. Car Charging Stations
[This article has been reproduced with permission from Duke University's Fuqua School of Business. This piece originally appeared on Duke Fuqua Insights]
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