Online Dynamic Pricing for Electric Vehicle Charging Stations with Reservations

Abstract: This paper introduces a novel model for online dynamic pricing of electric vehicle charging services that integrates reservation, parking, and charging into a comprehensive bundle priced as a whole. Our approach focuses on the individual high-demand, fast-charging location, employing a Poisson process as a model of charging reservation arrivals, and develops an online dynamic pricing strategy optimized through a Markov Decision Process (MDP). A key contribution is the novel analysis of discretization error introduced when incorporating the continuous-time Poisson process into the discrete MDP framework. The MDP model's feasibility is demonstrated with a heuristic dynamic pricing method based on Monte-Carlo tree search, offering a viable path for real-world applications.