Tesla to fine drivers hogging Supercharger stations: Could it backfire?

The aim is to increase customer happiness, but behavior economists have found that low-cost fines can render results that are the opposite of those expected.

First Look

Tesla Motors Inc. will begin imposing a $0.40-per-minute fine on drivers who leave their cars parked at Supercharger stations more than five minutes after their vehicles finish charging, the company announced Friday in an effort to maximize station availability by keeping people moving.

"A customer would never leave a car parked by the pump at a gas station and the same thinking applies with Superchargers," Tesla CEO Elon Musk wrote in a blog. Behavioral economists have noted, however, that low-cost fines can backfire. So it remains to be seen whether Tesla's initiative will effectively encourage courteous charging-station behavior or merely turn tardiness into a commodity.

"What economics has missed is that adding an incentive – a fine or a bonus – may be subtracting something else, the individual’s sense of responsibility, or obligation, or intrinsic pleasure," Samuel Bowles, a behavioral economist at the Santa Fe Institute in New Mexico, wrote in an essay published last summer in partnership with The Christian Science Monitor.

Dr. Bowles, author of "The Moral Economy: Why Good Incentives Are No Substitute for Good Citizens," argues that imposing a fine can cause individuals to view themselves strictly as consumers in contexts where they might otherwise see themselves primarily as social and moral beings.

"Certain cues can switch moral behaviour on or off," Bowles told The Toronto Star in 2008. "Charging for things often switches off moral behaviour."

Researchers demonstrated this phenomenon with an experiment at daycare centers in Israel, introducing a fee for parents who picked up their children late. Centers that imposed the fine saw an immediate rise in tardiness that leveled out to about double the level of tardiness they had seen before imposing the fine, as John List and Uri Gneezy wrote for the Freakonomics blog. Centers that continued not to charge a late-fee, meanwhile, saw no change in tardiness.

"Something funny happens when you move from zero fine to a small fine," Dr. Gneezy explained to the Star. "Suddenly, we can decide if the price is low enough to come late."

The researchers noted in their findings that a fee deemed "large enough" would eventually prove effective to reduce an undesirable behavior, but smaller fees can have an effect that's opposite of that expected.

Even if the charging-station fee proves ineffective to spur drivers to move their vehicles in a timely fashion, the remedy is not designed to be permanent, Mr. Musk noted.

"We envision a future where cars move themselves once fully charged, enhancing network efficiency and the customer experience even further," he wrote. "Until then, we ask that vehicles be moved from the Supercharger once fully charged."

A mobile app alerts drivers when their vehicle is nearly done charging, and it alerts them a second time once the charge is complete. If a driver moves their vehicle within five minutes of that second alert, then the fine will be waived.

"To be clear, this change is purely about increasing customer happiness and we hope to never make any money from it," Musk added. He noted in a tweet Saturday that the policy would be modified so that fees will be waived when most spots in a given station remain available.

There are currently 769 stations with 4,876 chargers, according to Supercharger data on the Tesla website – which notes that a 90 kWh Model S vehicle will take about 40 minutes to charge to 80 percent of its battery power, about 75 minutes to fully charge.

In 2012, Tesla began construction on the charging stations, which were themselves a selling point for electric car buyers who were wondering, as Fortune reported, how they would ensure consistent access to a charge while on the road.