Estimating the price-quality tradeoff: Evidence from DC fast-charging markets

We investigate the price and quality competition at DC fast-charging (DCFC) networks in the United States. Using high-frequency station-level utilization and pricing data and an instrumental variable strategy, we estimate a demand system for charging services that incorporates charging prices, station reliability, and the local competitive environment. From these residual demand curves, we estimate an elasticity to price of -2.8, consistently with (spatial) oligopolistic competition. We measure reliability by the charging success rate, that is, probability to successfully charge at a given charger on the first try. We find that increasing the charging success rate by 1 percentage point increases the demand at that location by 2.0%. Taken together, these estimates suggest that consumers are willing to pay on average 3.9 cents per kW (around $1.5 on a full charge) to increase the charging success rate by 10 percentage points.