Electric Vehicle Cost in 2035: The impact of market penetration and charging strategies

Abstract

This paper analyzes charging cost of battery electric vehicles (BEVs) for different penetration levels of BEVs and for different charging strategies by taking into account their impact on the electricity sector. We analyze a multi-level equilibrium model, which incorporates endogenous generation capacity investment, network expansion, and congestion management. We calibrate our model for the German electricity sector in 2035 and consider different degrees of BEV penetration and various charging strategies: (i) non-smart charging based on a standard charging profile, (ii) smart charging, where the charging load can be shifted throughout the entire day to provide flexibility to the system, and (iii) a mixed charging strategy, where smart charging is only possible during night hours. Our final results reveal that larger BEV penetration yields lower CO2 emissions even in those scenarios with smaller availability of green electricity production. Furthermore, both charging cost and resulting CO2 emissions are substantially reduced for smarter charging strategies for all scenarios considered. Finally, even for scale deployment of BEVs, charging cost remains comparatively low. The Total Cost of Ownership (TCO) of BEV adoption thus continues to crucially depend on the evolution of vehicle purchase prices.