“Unlimited juice” electric vehicle charging plans: Good idea or exploitation?

We often get asked by readers just how much it will cost to run an electric vehicle (EV). And while we’re able to say that an EV costs less to run once purchased than a gasoline car we’ve had to guess refer them to their local utility company for exact pricing.

So what if you could enter into a monthly service contract with an energy provider to provide electric vehicle charging equipment and power in much the same way you pay use your cellphone? Is it a sensible idea, or an overpriced way to extract money from EV owners?

[aditude-amp id="flyingcarpet" targeting='{"env":"staging","page_type":"article","post_id":228480,"post_type":"story","post_chan":"none","tags":null,"ai":false,"category":"none","all_categories":"business,enterprise,","session":"D"}']

Enter NRG Energy. Last week it announced the first privately funded electric vehicle network in the U.S.

Called eVgo, it aims to offer residents in Houston, Texas a no-hassle way to charge their electric cars both at home and in public, with level 2 and/or DC fast charging points at shopping malls, retail outlets and supermarkets.

Cellphone style tariffs

Using a model similar to a cellphone tariff, the company will offer three tiers of service, from a simple three-year service contract for the loan of a home charging unit through to a fully comprehensive package offering equipment and as much electricity as you need at home and from mobile charging stations.

35 Gallons of gas?

But the premium service isn’t cheap. At $89, we calculate that you could purchase over 35 gallons of regular grade gasoline from the cheapest gas station in Houston.

At an average fuel economy of 22.4 mpg, that’s equivalent to over 780 miles of gas per month, or 25.6 miles per day.

Shopping around could be cheaper

Back in 2002, Senate Bill 7 brought about the deregulation of electricity in Texas, meaning most of the residents in the state can choose who supplies their power.

[aditude-amp id="medium1" targeting='{"env":"staging","page_type":"article","post_id":228480,"post_type":"story","post_chan":"none","tags":null,"ai":false,"category":"none","all_categories":"business,enterprise,","session":"D"}']

The resultant price-war means that rates in Houston can be as low as 7.1¢ for each kilowatt-hour of electricity.

A 2011 Nissan Leaf is capable of traveling between 60 and 130 miles on its 24 kilowatt-hour battery pack, or $1.70 of electricity on the lowest available Texas rate at the time of writing.

Based on this tariff it would be theoretically possible to drive a 2011 Nissan Leaf between 3,141 and 6,805 miles on $89 of electricity per month, depending on your driving style. Obviously for this comparison we’re ignoring that energy tariffs normally raise the price of each kilowatt-hour after a set number of units have been passed – so you won’t actually get this mileage in real-life. Surficed to say though, the price you pay independently for electricity is cheaper when purchased this way than it is from this unlimited plan – unless you expect to cover 100+ miles every single day.

Installation and service included

However, the illustration above does not include the cost of electric vehicle supply equipment or in more common parlance, a charger.
Since prices for a fully-installed charger can start at $1,500 and even cost as much as $7,000 a three-year service agreement may be an attractive solution to anyone unwilling to pony up the cash up-front.

[aditude-amp id="medium2" targeting='{"env":"staging","page_type":"article","post_id":228480,"post_type":"story","post_chan":"none","tags":null,"ai":false,"category":"none","all_categories":"business,enterprise,","session":"D"}']

For that reason, the $49 tariff offered by eVgo makes more sense, since it only covers installation and service agreement for your home charger. You pay for the electricity on top.

At $49 a month for 36 months we work the total cost as $1,764 – a more competitive price than many charging solutions. In fact, it works out less than the standard pruchase and installation cost of the Areovironment EV charger – the unit eVgo are using.
Overly priced or convenient?

We know some consumers would rather pay more for a predictable monthly outlay covering all their electric car charging requirements. But is such a markup worth it for the convenience of charging where and when you like?

We’re not convinced.

[aditude-amp id="medium3" targeting='{"env":"staging","page_type":"article","post_id":228480,"post_type":"story","post_chan":"none","tags":null,"ai":false,"category":"none","all_categories":"business,enterprise,","session":"D"}']

Written by Nikki Gordon-Bloomfield, this post originally appeared on AllCarsElectric, one of VentureBeat’s editorial partners.