There are 115,109 electric vehicle chargers across the United States, and the Biden administration has said it will spend $5 billion to raise that number to 500,000.
What is an electric vehicle? What is a charging station?
An electric vehicle (EV) is a car, truck, or other vehicle powered by electricity stored in a rechargeable battery.
An EV charger is a charging outlet for plug-in EVs to recharge. It is the EV equivalent of a gas pump. An EV charging station is a location with several EV chargers. It is the EV equivalent of a gas station.
How many EVs, EV chargers, and EV charging stations are there in the United States?
The table sets out some data, assumptions, and targets related to EVs in the United States.
What is the Biden administration’s goal? Is $5 billion enough to achieve it?
The goal is to have 500,000 EV chargers by 2027. Currently, there are 115,109 chargers, so the Biden administration’s goal is to increase the number of EV chargers by 384,891 chargers.
A fast charger suitable for public-access use (called a level 3 charger) costs around $50,000 to install, so a $5-billion budget will buy 100,000 chargers—not nearly enough money to attain an increase of 384,891 chargers.
Is an EV charging station a public good?
A charging station is not a public good. A charging station is excludable because the user must pay to use one of its chargers, and it is rival because only a fixed number of people can use it at a time (i.e., the number of chargers).
Do power utilities, electric vehicle makers, and private charging station operators provide EV charging station services?
Charging services are being provided by private firms. In California, three of the state’s largest utilities are building more than 12,500 charging stations. Electric vehicle maker Tesla owns and operates more than 30,000 superchargers and that number is growing. Volkswagen will spend $2 billion over 10 years to install electric chargers but, as a fine for falsifying emissions data, it is not made voluntarily. ChargePoint, a private charging station operator, has installed 20,000 stations.
Why is the government providing EV charging stations?
The government is providing EV charging stations to strengthen a network effect. A network effect occurs when an increase in the number of users of a good or service increases its value. The electric vehicle has a network effect. An increase in EV users makes EV charging services more valuable and increases their number. An increase in charging services makes an EV more valuable and increases the number of EV users. By increasing the number of charging stations, the government seeks to speed the adoption of clean-technology vehicles.
What are the efficient quantities of EV charging stations and EV chargers?
The efficient quantities of EV charging stations and EV chargers are those at which marginal social benefit equals marginal social cost. We would need a large amount of information to measure these numbers. But we can get some help from the related market of gas stations and pumps, where competitive markets determine the quantities and can be presumed to be efficient.
In 2022, the United States had around 250 million gas-powered vehicles serviced by 150,000 gas stations, most of them attached to local convenience stores and located close to highway exits. The average number of pumps per gas station is 10, so 1.5 million pumps provided service to 250 million gas-powered vehicles, or 167 vehicles per pump.
In 2022, the United States had around 3 million EVs serviced by 47,142 charging stations. The average number of chargers per station was 2.44, so 115,109 chargers provided service to 3 million EVs, or 26.1 vehicles per charger.
By 2027, the United States is expected to have 13 million EVs. If the Biden target of 500,000 chargers is achieved, there will be 26 EVs per charger. And if the average number of chargers per station remains at 2.44, there will be 204,918 charging stations.
Would there be underprovision without government provision?
In 2022, EV charging looks underprovided with respect to road per station—82 miles of road per station compared with 27 miles of road per gas station—but overprovided with respect to chargers—26.1 EVs per charger compared with 167 gas vehicles per pump.
Will government provision lead to overprovision?
In 2027, with government provision in place, EV charging looks overprovided. According to the targets, EV vehicles per charge will be 26.0 compared with 167 gas vehicles per gas pump; and with respect to miles per station, there will be 20 miles of road per charging station compared with 27 miles of road per gas station.
A further reason to suspect overprovision of EV charging stations is that in the EV world, home chargers that use low-cost overnight power provide 85 percent of the charging. So public-access chargers provide only 15 percent of charging services.
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