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Strategic collaboration between land owners and charging station operators: Lease or outsource?

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  • Ding, Yanyan
  • Jian, Sisi

Abstract

Many regions of the world aim to phase out conventional private gasoline cars within ten years, requiring imminent expansion of the electric vehicle (EV) charging infrastructure. However, because of high installation and maintenance costs, many landowners (LOs), such as shopping malls and commercial building owners, hesitate to install and operate large-scale EV charging facilities of their own volition. In light of this reason, government-led investment is widely provided in many cities, in which local governments provide subsidies to or directly invest in the installation of EV charging facilities. However, this mode cannot be sustained in the long run. As the charging infrastructure market grows, many charging station operators (CSOs), who specialize in EV charging facility installation and operation, have emerged in recent years. These CSOs rent parking spaces from LOs to operate their charging business, which can potentially benefit LOs by attracting more EV drivers to patronize LOs. This parking-charging integration scheme (P&C scheme) builds a symbiotic relationship between LOs and CSOs. However, such schemes may have negative impacts on LOs. Allocating parking spaces to CSOs will increase the time general consumers without charging needs spend searching for parking, which will reduce the number of general consumers. If the newly attracted EV drivers only charge but do not consume in the LO, the LO might not be better off by participating in this scheme. To analyze the economic viability of the P&C scheme and the resulting impact on consumers, we develop a sequential-move game model, taking into account the responses of general consumers and EV drivers. We analytically prove the existence and uniqueness of the market equilibrium and derive the feasibility conditions for this scheme. Interestingly, we find that when the proportion of charging drivers who choose to patronize the LO is high, the LO is willing to reward the CSO for operating the charging service. A realistic P&C example is also presented to demonstrate our analytical insights.

Suggested Citation

  • Ding, Yanyan & Jian, Sisi, 2022. "Strategic collaboration between land owners and charging station operators: Lease or outsource?," Transportation Research Part B: Methodological, Elsevier, vol. 166(C), pages 183-211.
    • Handle: RePEc:eee:transb:v:166:y:2022:i:c:p:183-211
    DOI: 10.1016/j.trb.2022.10.004
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