Accelerating electric vehicle charging investments: A real options approach to policy design

Challenge and objective

  • Fast charging availability in rural areas is insufficient​.
  • The commonly used Net Present Value method for understanding the economics of charging investment does not capture the role of uncertainty.

Work performed

  • A model of investment that acocunts for future uncertainty.

Significant results

  • Investors’ uncertainty about future EV demand can explain the relative lack of fast charging in rural areas​.
  • Investments would take place faster if policy makers mitigate investors’ risk exposure​.
  • Long-term contracts are an effective way to reduce investors’ risk and thus incentivize investment.

Impact for distribution system innovation

  • A better understanding of future investments in fast charging stations.


Magnus Korpås

WP3 Lead
+47 970 42 009
Magnus Korpås
WP3 Lead


Reference in CINELDI