Optimal Capacity Planning and Battery-Charging Policy for an Electric Vehicle Battery Swap Station
Posted: 11 Nov 2016
Date Written: November 8, 2016
Battery swapping enables drivers of electric vehicles to exchange their drained batteries for recharged batteries at swapping stations. The business model for a swapping station involves several important decisions. For example, how many charging devices (fast devices vs. normal devices) and batteries should be stored onsite? How should different charging modes (fast charging vs. normal charging) be employed to charge drained batteries to provide satisfactory service with minimum cost? In this paper, we propose a two-stage stochastic optimization model to answer these questions. We derive an optimal charging-device portfolio and prove that the “two-threshold” charging policy is optimal. Extensive numerical studies that employ real-world data reveal several interesting observations. We show that fast charging devices are always needed and their optimal number is primarily determined by battery-aging costs. We also analyze the impact of progress in technology on capacity-planning decisions.
Keywords: electric vehicles, battery swapping, capacity planning, Markov decision process, L-convexity
JEL Classification: C61
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