No Place Like Home: Charging Infrastructure and the Environmental Advantage of Plug-in Hybrid Electric Vehicles

Many European companies face the challenge of lowering CO2 emissions from their company car fleets. A promising lever is to increase the notoriously low electric usage of Plug-in Hybrid Electric Vehicles (PHEVs). This paper examines whether home charging infrastructure can help achieve these goals. We leverage quasi-experimental variation in the delivery and installation of home chargers to quantify the impact of this technology on energy use and CO2 emissions of PHEV company cars held by 856 employees of a large German company. Since fuel and electricity expenditures for these cars are covered by the employer, home charging mainly changes the non-monetary costs to an employee. We find that access to home charging almost quintuples electricity consumption: Total charging increases by 318 kWh per quarter while fuel consumption falls by 98 liters, reducing tailpipe CO2 emissions by 38%. Moreover, access to home charging doubles the employee’s propensity to choose a Battery Electric Vehicle (BEV) upon renewal of the lease. Based on these estimates we compute the private levelized abatement costs of home chargers for a range of scenarios characterizing the diffusion of BEVs and the evolution of tax-inclusive energy prices over a 20-year horizon. Home chargers break even within twelve years, saving on average 13 tons of CO2 over a 20-year lifetime at negative levelized cost.