On-Demand Valet Charging for Electric Vehicles: Economic Equilibrium, Infrastructure Planning and Regulatory Incentives

Abstract: Many city residents cannot install their private electric vehicle (EV) chargers due to the lack of dedicated parking spaces or insufficient grid capacity. This presents a significant barrier towards large-scale EV adoption. To address this concern, this paper considers a novel business model, on-demand valet charging, that unlocks the potential of under-utilized public charging infrastructure to promise higher EV penetration. In the proposed model, a platform recruits a fleet of couriers that shuttle between customers and public charging stations to provide on-demand valet charging services to EV owners at an affordable price. Couriers are dispatched to pick up low-battery EVs from customers, deliver the EVs to charging stations, plug them in, and then return the fully-charged EVs to customers. To depict the proposed business model, we develop a queuing network to represent the stochastic matching dynamics, and further formulate an economic equilibrium model to capture the incentives of couriers, customers as well as the platform. These models are used to examine how charging infrastructure planning and regulatory intervention will affect the market outcome. First, we find that the optimal charging station densities for distinct stakeholders are different: couriers prefer a lower density; the platform prefers a higher density; while the density in-between leads to the highest EV penetration as it balances the time traveling to and queuing at charging stations. Second, we evaluate a regulatory policy that imposes a tax on the platform and invests the tax revenue in public charging infrastructure. Numerical results suggest that this regulation can suppress the platform's market power associated with monopoly pricing, increase social welfare, and facilitate the market expansion.