Is flexible plug-in electric vehicle charging an attractive investment? Evidence from implicit discount rate estimation

Abstract

As Europe phases out petroleum-powered vehicles, plug-in electric vehicles (PEVs) are expected to become the norm. However, realizing their full environmental and grid-stabilizing potential depends on drivers' willingness to adopt home chargers that support flexibility services, such as shifting charging to off-peak hours, responding to variable renewable energy supply, and selling stored electricity back to the grid. Using a discrete choice experiment with a sample of 769 Belgian drivers (representative by age, region, and gender), we structurally estimate an implicit discount rate (IDR) that captures drivers' willingness to trade upfront charger costs for future annualized electric-bill savings. This model simultaneously estimates preferences for specific flexibility- enhancing features, revealing which types of charging flexibility drivers are most willing to adopt. We find that the average driver applies an IDR of 28.5%, while a latent majority class comprising 79.86% of respondents—younger, better-educated drivers—applies a lower IDR of 23%. Since both of these IDRs are greater than the typical 4–5% financial market interest rate, we conclude that drivers apply a flexibility discount rate gap to PEV charging investment. Nonetheless, they also show a willingness to adopt solar charging, dynamic load management, and vehicle-to-home-and-grid charging, indicating potential for the majority of drivers to adopt f lexible PEV chargers once financial barriers are addressed. Finally, our results show behavioral, demographic, and attitudinal characteristics that are associated with membership in the majority class—those more likely to invest in a flexible charger—highlighting pathways to bridge the discount rate gap and promote adoption of f lexibility-enabling technologies.