Economics of charging infrastructure for electric vehicles in Korea

Abstract

This study explores the economics of the public electric vehicle (EV) charging station in Korea to provide insights into the business. In Korea, the public charging infrastructure is typically important for the large scale diffusion of EV because many potential EV buyers live in multi-family residential units with limited off-street parking and thus installing home chargers is restricted. With internal data from the private charging service providers, this study shows that the charging business is hardly profitable with the current charging price of $0.23/kWh with subsidies to mitigate initial investment costs. In addition, many industry analysts have noted that subsidies may distort charging market; building charging stations to get the subsidies without considering economics of stations resulting in very low utilization rate. Removing the subsidies may minimize the market distortion but the economic feasibility becomes much worse. We propose the discriminatory price scheme, that is, different charging prices for the slow and the fast chargers. The appropriate charging prices without subsidies are estimated to be $0.25/kWh for the slow chargers (9% higher than the current charging price) and $0.39/kWh for the fast chargers (70% higher than the current price).