Reducing the levelized cost of electric vehicle charging infrastructure: Comparative policy options to accelerate the low-carbon mobility transition in Europe

The paper “Reducing the levelized cost of electric vehicle charging infrastructure – Comparative policy options to accelerate the low-carbon mobility transition in Europe” will be presented at the FSR Sustainability Conference on “Greening Infrastructures” (22 June 2022).

Introduction and Purpose of the Study

Decarbonizing road transport is crucial to achieve the European Union’s goal of reducing greenhouse gas emissions by 55% in 2030, as compared to 1990 levels, as outlined in the “Fit for 55” package. Included in the package are amendments to the mandatory CO2 emissions targets for new passenger vehicles, for which the diffusion of electric vehicles (EV) is considered not only a key element, but more importantly the benchmark for all new registered vehicles by 2035. While vehicle sales mandates constitute one necessary lever to ensure this ambitious goal, another is reduction of EV costs and of the cost to charge them. With rapidly decreasing purchase prices of EVs, charging costs play an ever more important role for the cost of using EVs, and by extension for the comparison of the total cost of ownership of EVs with that of conventional internal combustion engine vehicles (ICEV). However, comparing fuel costs of ICEVs and EVs is not trivial. While gasoline and diesel costs are very transparent to consumers (i.e. the pump price as gas stations), EV charging costs are not, as they depend on a variety of factors including charging infrastructure, charging location, charging speed, and time of charging.

This study assesses the relative levelized cost differences in charging infrastructure options for EV owners in different European countries in order to understand how policy can help to reduce overall charging costs. In particular, we examine key components of charging infrastructure costs to discern cost differences both within and between countries in order to derive actionable policy implications. We discuss how to regulate charging infrastructure as well as the electricity grid infrastructure, which also drives cost.

Research Design and Expected Results

This study uses an own developed systematic classification of charging options by power level and charging location that gathers extensive new market data on equipment cost, and employs a levelized cost approach to model charging infrastructure costs in 30 European countries (EU27, United Kingdom, Norway, and Switzerland) and for 13 different charging options. The charging options are then aggregated to typical user profiles. Building on the levelized cost of charging (LCOC) formula recently proposed by NREL for an analysis concerning the United States1, our approach extends the LCOC metric drawing on levelized cost methods in the fields of electricity generation, to derive an innovative measure to make infrastructure cost, besides other cost for charging, comparable.

Our findings demonstrate a large variance of charging infrastructure costs across countries and charging options, resulting in very different available policy levers to reduce charging costs. Furthermore, we find certain policy levers to be more appropriate than others for different charging options and in different countries. Based on these results, we assess different policy options to address and reduce inadequately high charging costs within countries as well as reduce large between-country differences, which has implications for the relative speed of the electric mobility transition in Europe. We also discuss how within-country inconsistencies of policy mixes that target low-carbon transitions in separate sectors can be resolved in order to increase overall policy efficiency and accelerate the low-carbon mobility transition.

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