Smooth Operator? Managing Electric Vehicle Integration in Constrained Distribution Networks

Electricity distribution network constraints may ultimately limit the pace of transportation electrification. This paper examines the underappreciated challenges that electric vehicle (EV) adoption poses for the distribution grid. While prior research has focused on bulk power and private service upgrades, we emphasize how local distribution capacity is strained by reduced load diversity at small aggregations. We highlight two alternatives to costly infrastructure expansion: (1) demand-based tariffs that allocate scarce distribution capacity more efficiently, and (2) managed charging programs that coordinate EV loads within local limits. While managed charging reduces transformer overloads and smooths load profiles, consumer participation remains a barrier. Economists can play a key role by designing rate structures that align user incentives with local network constraints and by evaluating consumer acceptance of these solutions as electrification advances. JEL Classification: Q40, Energy: General; Q50, Environmental Economics: General