How Battery Storage Can Help Charge The Electric Vehicle Market

This article has been developed by the McKinsey Center for Future Mobility.

McKinsey estimates that there could be ten to eleven million battery electric vehicles (BEVs) on US roads by 2030. For this to happen, though, access to charging infrastructure must improve.

One issue involves demand charging at public charging stations. In the specific case of BEV charging, as soon as a car plugs in, the station owner must pay a demand charge. This is based on several factors, including the number of chargers on the site, the maximum power in kilowatts used by the car when it plugs in and the number of cars charging at the same time in any 15- to 30-minute segment. Demand charges can be as little as USD 2 per kilowatt all the way to USD 90 per kilowatt.

One way to resolve this conundrum involves stationary battery storage. On-site batteries can charge and discharge using direct current (DC), and connect to the grid through a large inverter. They can then charge from the grid at times when costs are lower, store the power, and release it when demand is higher (a practice known as peak shaving). When a car arrives, the battery can deliver electricity at 150 kilowatts without drawing power from the grid. The economics improve because of the greatly reduced cost of both the electricity itself and the demand charges.