Economic Simulation and Evaluation of Electric Vehicle Charging and Discharging under Time-of-Use Pricing

Abstract

In the context of China’s ongoing experimentation with time-of-use (TOU) tariffs, electric vehicles (EVs) can serve not only as clean transportation but also as behind-the-meter distributed storage. This paper proposes a quantitative method to evaluate the economic benefits of EV charging and discharging. Battery capacity is partitioned into a "safety zone" and an "active zone": the safety zone guarantees mobility demand, while the active zone is dedicated to TOU arbitrage and vehicle-to-grid (V2G) interaction. The proposed framework jointly accounts for discharge revenue, electricity purchase cost, and battery degradation cost, while embedding practical constraints such as station power limits and heterogeneous user behavior. A long-horizon iterative accounting scheme is developed and solved through Monte Carlo simulation to compare pricing mechanisms and battery sizes. Results show that flexible TOU pricing unlocks substantially higher economic potential than fixed tariffs; expanding battery capacity yields nonlinear gains in net benefit; and under the proposed strategy an EV fleet exhibits pronounced peak-shaving and valley-filling capability, providing both economic value and grid support. The findings can inform TOU tariff design and the deployment of V2G programs.