EV Charging
Credit: Photo by John Cameron on Unsplash
$/kW-port – The next frontier in clean transportation

It’s hard to believe we may look back on the social distancing of 2020 and find things we miss.  If we do, I’ll bet one will be the cleaner air we’re enjoying with fewer polluting vehicles on the roads.  Someday, electric vehicles will dominate traffic, fueled by a zero-carbon grid.  With more wind and solar every year, the power side is making great progress. In transportation, it’s a different story.  Electric vehicles remain a fraction of new auto sales.  Auto makers are investing tens of billions of dollars in electric powertrains.  Unfortunately, without charging infrastructure, consumer concerns over range anxiety will limit sales. 

The conclusion is that charging infrastructure is too expensive. If owners and operators of EV chargers pay the full cost to install the infrastructure and then make customers pay for charging, electric miles will cost more than traditional gasoline and diesel. Tesla effectively solved this problem by building their own proprietary charging network and bundling the cost into the price of the vehicle. Nevertheless, this does not solve the issue for other companies.

Faster, better, cheaper

EVs are competing with an incumbent solution and they must be faster, better or cheaper to win. While they are faster (try the acceleration) and better (for the environment), they’re more expensive to purchase. EV advocates argue that because electric miles are cheaper than gasoline, EV sales will take off. Even if that’s true, many customers won’t buy an EV until there is enough charging infrastructure to alleviate range anxiety. However, if fueling an EV ends up costing more than driving a gasoline vehicle, we’re going to see a lot of carbon-powered vehicles on the road for a long time. We need to find ways to make EV charging cheaper and more widely available.

What cost are EVs trying to beat? About $0.10/mile for passenger cars

Figure 1: $/mile at varying miles per gallon

Gasoline and diesel prices fluctuate, and vehicles have a wide range of mileage. A reasonable mid-point is $0.10 per mile, which assumes a gasoline price of $2.50 per gallon and fuel efficiency of 25 miles per gallon.  Figure 1 (above) and Table 1 (below) show the sensitivity to vehicle mileage and gasoline price and give a good idea of what electric vehicles have to beat.

Table 1: Gasoline cost per mile

Gasoline
$/mile
$/gallon
gas price
—>
MPG $2.00 $2.50 $3.00 $3.50 $4.00
15 $0.13 $0.17 $0.20 $0.23 $0.27
20 $0.10 $0.13 $0.15 $0.18 $0.20
25 $0.08 $0.10 $0.12 $0.14 $0.16
30 $0.07 $0.08 $0.10 $0.12 $0.13
35 $0.06 $0.07 $0.09 $0.10 $0.11
40 $0.05 $0.06 $0.08 $0.09 $0.10
45 $0.04 $0.06 $0.07 $0.08 $0.09
50 $0.04 $0.05 $0.06 $0.07 $0.08
How much do electric miles cost?

The cost per mile for an EV depends on the fuel price and the fuel efficiency. For EVs, fuel price is measured in $/kWh and fuel efficiency in Wh/mile or miles per kWh. Electricity prices across the US average about $0.11/kWh, with wide variation across states. Many states with more aggressive climate goals have electricity prices above $0.15/kWh.

Figure 2: Cost per mile comparison

The best EVs are rated about 300Wh/mile and less efficient ones are over 450Wh/mile. This puts the cost of fueling an EV in the range of $0.03- $0.08 per mile with a mid-point roughly half the price of gasoline.

Table 2: Electricity $/mile

Electricity
$/mile
$/kWh
electricity price
—>
miles/kWh Wh/mile $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35
5.00 200 $0.01 $0.02 $0.03 $0.04 $0.05 $0.06 $0.07
4.00 250 $0.01 $0.03 $0.04 $0.05 $0.06 $0.08 $0.09
3.33 300 $0.02 $0.03 $0.05 $0.06 $0.08 $0.09 $0.11
2.86 350 $0.02 $0.04 $0.05 $0.07 $0.09 $0.11 $0.12
2.50 400 $0.02 $0.04 $0.06 $0.08 $0.10 $0.12 $0.14
2.22 450 $0.02 $0.05 $0.07 $0.09 $0.11 $0.14 $0.16
2.00 500 $0.03 $0.05 $0.08 $0.10 $0.13 $0.15 $0.18
1.82 550 $0.03 $0.06 $0.08 $0.11 $0.14 $0.17 $0.19
Cost of charging infrastructure

There’s a wide variety of charging options; chargers that dispense electricity faster are more expensive per port, with significant increases in costs for high-power stations, requiring more expensive equipment and more infrastructure upgrades. Publicly accessible chargers that need to withstand the elements, or have networking and payment capabilities, are also more expensive.

All chargers do the same thing: they transfer electricity into the vehicle battery. But, a fast Level 3 charger can juice up a battery in about 20 minutes, while a Level 2 charger would take over eight hours to achieve the same. If you’re going to be parked in the same place for eight hours, the Level 2 charger is more convenient, but not ideal for long distances. To facilitate a cost comparison between fast and slow chargers, I’ve created the metric of cost per kW-port.

$/kW-port: To facilitate a cost comparison between fast and slow chargers, I’ve created the metric of cost per kW-port, which is the cost to install each port (measured in dollars) divided by the power rating of each port (measured in kW). For example, a 6.5kW Level 2 port that cost $6500 would be $1000/kW-port.

To compare costs across different types of installations, I’ve selected four representative examples with data for the public chargers based on the recently released white paper from the New York Department of Public Service. The four examples are a residential charger, a public 6.5kW Level 2 charger and two levels of public DC Fast Chargers. Note that while these costs may seem high, several groups including the Joint Utilities of New York recently filed comments that the cost estimates were too low. [1]

Table 3: Four representative charger installations

Residential L2 Public L2 50kW DCFC 150kW DCFC
Power (kW) [A] 6.5 6.5 50 150
Hours to charge 60kWh 9.2 9.2 1.2 0.4
Hardware Cost ($) $500 $3,200 $30,000 $50,000
Installation Cost ($) $1,000 $3,300 $37,500 $50,000
Total Cost ($) [B] $1,500 $6,500 $67,500 $100,000
$/kW-port [B/A] $231 $1,000 $1,350 $667

To calculate the cost of charging infrastructure on the basis of cost per mile that we used for fuel, we have to know four things: (1) the upfront installed cost, (2) the ongoing operating expenses, (3) utilization of the charger over a reasonable lifetime and (4) the price customers will pay for electricity dispensed from the charger. Here’s why utilization is so important:

If you spread the upfront cost of the charger over the kWh that are consumed, you’ll get the incremental cost per kWh that an owner or operator would have to collect to recover the initial cost. The more the charger is used, the less it costs per kWh.  The charts below show how the cost declines with hours of paid usage for a $1,000/kW-port public Level 2 charger and for DC Fast Chargers.

Figure 5: Public L2 Charger at $1000/kW-port (truncated vertical axis)
Figure 6: 50kW and 150kW DCFC at $1350 and $667/kW-port (truncated vertical axis)

Table 4: Usage required to fall below an incremental $0.05/kWh

Residential L2 Public L2 50kW DCFC 150kW DCFC
Hours of Usage 4,700 20,000 27,000 13,300
Estimated Miles 102,000 430,000 4,500,000 6,650,000

Assuming we want the premium to be under $0.05/ kWh, it takes over 20,000 hours of paid usage for the public Level 2 charger, over 13,000 hours for the 150kW DCFC and nearly 27,000 for the 50kWDCFC. The residential home charger has the lowest cost per kW-port and therefore requires the fewest hours of usage, but the costs aren’t shared across drivers.

Solutions and implications – Why does any of this matter?

Charging infrastructure is key to enabling the transition to low-carbon transportation. Here are a few implications:

  1. Utilization matters. The cost per mile in every scenario goes up substantially as utilization falls. Strategies to increase utilization could include bundling charging with the purchase of a vehicle. Tesla has already built out its own proprietary fast charging network that bundles charging with the vehicle purchase.
  2. The cost of charging infrastructure must fall. Other areas of clean energy, including solar, batteries and LEDs, have seen costs decline over 80% in under a decade as scale and competition took out cost. Focusing on installed cost per kW-port is a useful metric to track cost declines.
  3. Pursue other strategies to lower cost per kWh. Wholesale electricity prices vary widely over the course of the day, with some hours 50% lower or higher than others. In other markets with high fixed costs, we’re comfortable with prices being higher at peak periods. The more EV drivers can be flexible when they charge, and the more they can take advantage of those price differences, the lower the cost per kWh.
  4. Flexibility and utilization work at cross purposes. Flexibility to select when a vehicle is charging requires that there are times when vehicles are plugged in but not charging, or when charging ports are not being used, making it difficult to maximize utilization.
  5. Utilities and regulators should consider technology-specific rates. Transitioning to low carbon transportation offers benefits from mitigating climate change to improving air quality. Perhaps electricity used for clean transportation deserves a lower price than electricity for other uses?
  6. Programs for vehicles and charging infrastructure must be coordinated. Given the importance of utilization, the economics of charging stations are especially challenged when there are few electric vehicles. Charging infrastructure needs to assure customers that if they buy the vehicles, they can drive where they want to go, and vehicles to ensure that owners of charging infrastructure can operate profitably.

[1] See pages 8-12 of Joint Utilities comments filed April 28 2020 http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={D739E7C9-C2F0-4C69-9A8C-13638A3528B1}

[i] Retail electricity price by state available at https://www.eia.gov/electricity/state/