Plugging In: A Feasibility Study on Public Plug-In Vehicle Charging Infrastructure Investment

Abstract

Radical changes to our transportation sector could have positive impacts on our economy, security, health, and natural environment. Of the available options to address fossil fuel dependency in the transportation sector, vehicle electrification stands as an exciting option with a number of appealing benefits. Plug-in vehicles can reduce operating costs, air pollutants and greenhouse gas emissions, as well as dependence on fossil fuels, but their successful penetration will depend greatly on the thorough build-out of both residential and public charging infrastructure. Much has been made in the media and academic literature about the environmental benefits of vehicle electrification. Rather than focus on these “green” issues again, this project uses a spreadsheet-based investment model to examine the possibilities of the profitable deployment of public plug-in vehicle charging infrastructure by doing two things: 1. Determining ways that potential buyers can make profitable investment decisions based on their specific needs, and 2. Evaluating the market penetration of plug-in hybrid electric vehicles (PHEVs) that would be required for that investment to be profitable. Our results indicate that public electric infrastructure build-out can be profitable for any stakeholder, depending on the assumptions made. Focusing in on retailer stakeholders, I reveal that profitability will be quite sensitive to retailer size. Larger retailers will likely be able to invest profitably in limited infrastructure right away, but retailers with smaller parking lots will want to wait for deeper plug-in penetration, or rely on sources of revenue from their installed infrastructure other than direct user fees.