Incentives to shift time of charging electric vehicles: what works and what does not
By 2023, 18 percent of global vehicle sales were electric, up from only 2 percent in 2018. This rapid increase is both a challenge and an opportunity. The challenge is to supply electric power to satisfy a rapidly increasing demand. The opportunity is given by the potential to shift time-of-day consumption: unlike other electricity uses, charging a car can in principle be done at different times of day and night, namely at times when demand is lower.
Absent incentives, most consumers are likely to charge their electric cars (EVs) at the most convenient time, namely between 5 and 8 PM, when drivers return home from work. This creates an “EV rush hour” that adds to peak demand. If instead EVs were charged during periods of oversupply (e.g., during the night), then the system would be more efficient, both from an economic and from an environmental perspective.
A recent study estimates, by means of a field experiment, the effects of public policies directed at shifting the timing of electric vehicle (EV) charging. In addition to a control group, the authors implemented two policies on two different groups: a “rewards” group, who were offered a financial payment when they shifted consumption; and a “info” group, who were given information on the societal incentives of charging in the same off-peak hours.
The figure below illustrates the policies’ effects. The horizontal line measures time, with the vertical line marking the moment when the policies were implemented. The vertical axis measures the normalized share of kWh charged in off-peak. Three lines are plotted. The blue line corresponds to the control group, the orange line to the group that was provided information, and the dashed green line to the group that was given financial incentives. The shaded gray areas correspond to 95% confidence intervals.
As can be seen, the information group’s energy use is not statistically different from that of the control group. By contrast, consumers who are given financial incentives shift by about 30%.
The authors considered an additional experiment, namely to remove the financial incentives given to the “reward” group from part of that group. They show that, while the reward group continues to shift charging to lower consumption hours, the part of the group that loses the financial incentive also ceases to shift consumptions, returning to levels similar to those of the control group.
In sum, the paper’s findings “highlight the substantial flexibility of EV charging compared to other forms of electricity demand. Such flexibility has the potential to greatly reduce future electric system costs arising from a rapidly decarbonizing transportation sector.”
Megan R. Bailey, David P. Brown, Blake Shaffer, and Frank A. Wolak
Show Me the Money! A Field Experiment on Electric Vehicle Charge Timing
American Economic Journal: Economic Policy 2025, 17(2): 259–284