Pricing and Revenue Maximization for Battery Charging Services in PHEV Markets

TLDR

Battery charging has unique characteristics that lead to a piecewise linear quality‑of‑service model. The study investigates a pricing strategy to maximize revenue for battery‑charging services in the future plug‑in hybrid electric vehicle market. The authors develop service models for a monopoly market with two service classes and use superdifferential theory to prove existence, uniqueness, and convergence of subscriber equilibrium. They find a trade‑off between monetization and customer acquisition when designing revenue‑maximizing pricing for the two service classes.

Abstract

This paper investigates a pricing strategy to maximize the revenue in future plug-in hybrid electric vehicles' market for battery charging services. Service models are developed for a monopoly market with two typical service classes. The unique characteristics of battery charging result in a piecewise linear quality of service (QoS) model. By resorting to the concept of superdifferential, some theoretical results, including the existence and uniqueness of the subscriber equilibrium and the convergence of the corresponding subscriber dynamics, are established. In the course of developing revenue-maximizing pricing strategies for both service classes, a general tradeoff has been identified between monetization and customer acquisition.