BACKGROUND

In recent years, electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) have become more common in the United States. The purchase and use of these vehicles is expected to increase; a 2021 Pew Research Center survey found that over one-third of Americans (39%) are at least somewhat likely to seriously consider an EV as their next vehicle.  A broad-based transition to EVs will improve air quality, lower vehicle operating costs, and support state and national goals addressing climate change and greenhouse gas emissions. Making this transition will require a comprehensive network of charging facilities.

Although private sector entities are actively involved in building and maintaining EV charging infrastructure, public sector agencies have an important role in planning the network. The National Electric Vehicle Infrastructure (NEVI) Formula Program, introduced in the 2021 Infrastructure Investment and Jobs Act (IIJA), places state departments of transportation (DOTs) at the forefront of implementing a sizeable federal investment in EV charging infrastructure. Whether charging services are provided by a for-profit, nonprofit, or governmental entity, an appropriate revenue model for EV charging services is needed to successfully leverage this investment to establish and sustain a comprehensive charging network.  

An effective revenue model for EV charging services establishes price levels and pricing structures that:

• Support societal goals for climate, equity, and economic development;
• Meet and manage charging demand;
• Incentivize ongoing investment and innovation in EV charging and the power grid;
• Suitably allocate and manage risk and costs; 
• Promote interoperability among charging providers and jurisdictions;
• Align with business models and priorities of charging service providers and utility companies; 
• Are feasible within the relevant regulatory and governmental context; and
• Can adapt to changes in technology and service provider business models.

Research is needed to provide state DOTs and their partners with information on the options and effects of various revenue model characteristics so they can select and implement revenue models for sustainable long-term EV charging service provision. 

OBJECTIVE

The objective of this research is to develop a guide and decision-making support tool  for state DOTs, other state agencies, and their partners for selecting appropriate revenue models that promote long-term investment and sustainable provision of EV charging services. The guide and tool will include:

• Information on current revenue models for EV charging; 
• Perspectives and priorities of key public and private sector partners and stakeholders;
• Representative scenarios with a variety of contexts and conditions that affect EV charging;
• Business cases for revenue models for each scenario; and
• Effective communication of essential concepts and considerations related to revenue models for EV charging.

RESEARCH PLAN

PHASE I 

Work conducted in Phase I will include:

• A rapid scan of current revenue models for EV charging in the United States and internationally, including:
  • Business models used by private sector providers (e.g., alternative revenue streams that offset user charging costs);
  • Private sector investment and operations (public-private partnerships and other partnering arrangements);
  • Models and methods used to estimate potential revenues and the distribution of costs and benefits of collecting revenues;
  • Design of user fees and methods for setting prices (e.g., surge demand-based pricing, flat fees);
  • Communicating pricing to users;
  • Impediments to user access (e.g., lack of credit card or internet; limited availability of outlets at multi-unit housing);
  • Integration with the electrical grid (e.g., capacity, off-peak storage at the charging station; renewable-energy incentives);
  • Standards and functional requirements, and the interoperability of charging solutions; and 
  • The role of other clean-vehicle fuels in shaping EV charging demand, deployment, and prices (e.g., hydrogen, natural gas, etc.).
    
    
• Development of at least four detailed scenarios that reflect characteristics of:
  • State DOTs (e.g., agency size; regulatory and legislative context related to user fees; experience with alternative contracting methods; and agency funding and finance);
  • Public sector partners including state departments of energy and revenue, utility regulators, local and regional governments, and metropolitan/rural transportation organizations;
  • Private sector partners including EV charging service providers, electricity generators, manufacturers of EV charging equipment, and revenue collection service providers;
  • Utility companies and the electrical grid;
  • EV charging demand patterns (e.g., time-of-day; local vs. longer trips; and location at home, workplaces, destinations, fleet depots); and
  • Network location and charging site characteristics (e.g., rural, suburban, or urban area).
    
    
• Development of a draft framework in flowchart or matrix format for assessing options and tradeoffs that can inform the business case and decision-making for revenue models, including:
  • Distribution of benefits and costs;
  • Allocation and sharing of risks;
  • Considerations and priorities for partners and stakeholders;
  • Long-term effect on EV adoption and use; and 
  • Integration of EV charging with the electrical grid and state energy plans. 

Information sources for Phase I will include published research, agency reports, and case studies as well as outreach to transportation agencies, the energy sector, and state agencies responsible for revenue collection. Phase I will culminate in a report documenting Phase I activities along with a set of recommended scenarios for Phase II activities.  Following a 1-month review of the Phase I report, an in-person interim meeting of the NCHRP project panel and the project team will be held to provide feedback on the results of the analysis and identify needed adjustments.

PHASE II

Work conducted in Phase II will include refining the framework and developing a practitioner-ready tool to apply the framework. The tool will be a stand-alone, downloadable file using software already commonly in use by state DOTs (e.g., Microsoft Excel). 

Apply the framework and tool to develop one or more revenue models for each of the approved scenarios. Provide a Phase II report for NCHRP review and approval with (1) documentation of Phase II activities; (2) the refined framework; (3) a fully functional demonstration version of the tool with a worked example of the analysis of one of the scenarios; (4) step-by-step instructions on how to use the tool; (5) summary of results of the analysis for all scenarios; and (6) a detailed plan for Phase III—including state DOTs and other organizations willing to participate in Phase III activities—for NCHRP review and approval.  Following NCHRP review of the Phase II report, participate in a web-enabled meeting of the NCHRP project panel and the project team to present the demonstration version of the tool. Costs for web-enabled meeting hosting will be paid by NCHRP.

PHASE III

Work conducted in Phase III will focus on applying the approved Phase III plan to vet the framework and tool and gather insights on effective communications materials and effects of technological advancements (e.g., in-road inductive charging, replaceable batteries) on revenue-related decisions. In addition to staff from state DOTs, anticipated vetting participants include staff from EV charging providers, utility companies, state utility regulators, and state agencies responsible for the collection of revenue. 

Phase III will culminate in a report with (1) the outcomes of the vetting; and (2) the preliminary design and content outline of the final deliverables.

PHASE IV

In Phase IV, the final deliverables will be developed. Anticipated deliverables include: 

• Guide to revenue models describing:
  • Current approaches to revenue collection from EV charging;
  • Key stakeholders and partners and their common roles, concerns, and priorities;
  • Electricity grid considerations and the role of the state DOT in building a grid that can support the transition to EVs;
  • Decision-support framework;
  • Detailed use cases illustrating the use of the framework and tool, drawn from Phase II of the project;
  • User guide to applying the framework and using the tool;
  • Interpreting the outputs of the tool to inform the selection of revenue models;
  • Effective approaches to communicating key concepts to specific audiences;
  • How emerging and anticipated technologies may shape the revenue decision-making context; and
  • Other topics identified during the research.
    
    
• Practitioner-ready, downloadable decision-support tool.
  
  
• Downloadable, customizable briefing materials tailored to specific audiences, including state DOT leadership, legislative liaisons, and local government partners.
  
  
• Stand-alone Conduct of Research report documenting the project activities.
  
  
• A stand-alone technical memorandum that identifies implementation pathways, key implementers of the results, and well-defined scopes of work for further dissemination and pilot implementation of the methods. The technical memorandum should draw from the Phase III activities and provide adequate detail about how a state DOT can implement the results of NCHRP 19-21.

STATUS: Proposals have been received in response to the RFP.  The project panel will meet to select a contractor to perform the work.