Subsidizing Battery Capacity and Charging Networks to Maximize Battery Electric Vehicle Adoption
*Names in bold indicate Presenter
Some drivers will not require a recharging network because their daily trips can all be made within the range of a single charge. If battery capacity is increased enough, nearly all users that prefer the BEV will have their daily trips covered by a single charge and the need for charging network capacity will ultimately decrease. Currently, however, a multi-dimensional chicken-and-egg problem exists. There are not enough drivers of electric vehicles to support a stable equilibrium number of charging stations, and the battery technology is not advanced enough to attract a significant number of drivers who could do without the charging network. Without more drivers to motivate an increase in the charging network or battery capacity, the network eventually collapses and the number of BEVs will fall to the level of drivers who can make their daily commutes with home-charging only. Results of the simulation show that the optimal battery capacity may have already been reached, but the technology is still too expensive for more widespread adoption. To reach a stable equilibrium of supply and demand for charging stations, I recommend subsidies for station installation to maintain the maximum threshold level (with a battery size capable of traveling 82 miles, 3 stations with fixed costs of $150,000). If this minimum level is maintained and we can also improve recharging technology or reduce capital costs, adoption will increase more rapidly.