Investment in EV charging spots for parking

04/22/2019
by   Brendan Badia, et al.
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As demand for electric vehicles (EVs) is expanding, meeting the need for charging infrastructure, especially in urban areas, has become a critical issue. One method of adding charging stations is to install them at parking spots. This increases the value of these spots to EV drivers needing to charge their vehicles. However, there is a cost to constructing these spots and such spots may preclude drivers not needing to charge from using them, reducing the parking options for such driversblack. We look at two models for how decisions surrounding investment in charging stations on existing parking spots may be undertaken. First, we analyze two firms who compete over installing stations under government set mandates or subsidies. Given the cost of constructing spots and the competitiveness of the markets, we find it is ambiguous whether setting higher mandates or higher subsidies for spot construction leads to better aggregate outcomes. Second, we look at a system operator who faces uncertainty on the size of the EV market. If they are risk neutral, we find a relatively small change in the uncertainty of the EV market can lead to large changes in the optimal charging capacity.

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