The major car companies are expanding production of their electric vehicles, including BMW, Ford, General Motors, Nissan, Toyota, and Kia.
The states getting them on the road are California, Colorado, Hawaii, Massachusetts, Maryland, New Jersey, Nevada, Oregon, Virginia, and Washington State. That’s according to BloombergNEF, which says EVs make up 10% of car sales in those sales in the first half of this year.
Tesla’s Model Y is the top-selling EV in California. That vehicle cost about $50,000, although federal and state tax credits bring it down for some buyers.
Bloomberg predicts that EVs will comprise half of all car sales in the United States in 2030. But that creates concerns about whether the transition and distribution system is fit enough to handle the increased traffic.
To get there, the U.S. Department of Energy says that the transmission and distribution network must expand by 60% by 2030 — and to triple by 2050. The REPEAT Project adds that if the transmission grid fails to develop more than 1% yearly, it will increase U.S. greenhouse gas emissions by 800 million tons annually by 2030. That hurts car companies and their EV rollouts.
The Edison Electric Institute projects 26.4 million electric vehicles in 2030, giving utilities new revenues but putting pressure on them to make substantial outlays. They have invested over $3 billion into the charging infrastructure, with nearly $1 billion in underserved communities.
The goal is to build the charging infrastructure to at least 10 million new ports to meet the demand. And the wires must handle the increased traffic, requiring utilities to invest heavily in the transmission and distribution infrastructure.
“We’re infrastructure experts: we operate the grid, which literally wraps around the world many times,” said Lon Huber, senior vice president of Duke Energy.
Britt Reichborn-Kjennerud, director of e-mobility for ConEdison that managing the charging times through demand response programs or time-of-use rates will push EV owners to juice up during off-peak times. That will reduce infrastructure needs, helping manage everyone’s costs.
J.P. Morgan generally agrees with BloombergNEF. It said EV sales will account for 38% of all car purchases by 2025. That includes hybrids that run on both electricity and natural gas. China will account for more than half of those car sales.
“China, unabashedly, wants to be the Detroit of electric ve-based fund investing in the electric vehicle supply chain, in a Bloomberg report. “There is no question in my mind that they are going to lead the world in capacity and, eventually, in the technology.”
Policymakers are generally supportive: the European Union is phasing out the internal combustion engine by 2040, while the Biden Administration wants half of all U.S.-sold vehicles to run on electricity by 2030. If electricity can replace gasoline, that would help countries meet their climate goals.
The Inflation Reduction Act will cut carbon emissions by 40% from a 2005 baseline, partly provided by the incentives given to EVs and hydrogen cars. Automakers are shifting gears and moving into the fast lane to give consumers what they want.
Indeed, Cox Automotive forecasted sales of new EVs in the United States to surpass 1 million cars for the first time this year. Already, they are 7% of recent car sales.
To that end, the act provides a $7,500 tax credit for EVs beginning this year and will last a decade. This benefit had previously gone away if the car manufacturer sold more than 200,000 vehicles. However, the credit has some limitations and only applies to less-expensive models and has income ceilings.
Toyota Corp’s experience may be a precursor of what is to come. Currently, 21% of its sales are electric or hybrid cars. The goal is 40% by 2025. Companies make cars the public demands, compounded by public policies and financial incentives.
“By significantly exceeding our CO2 targets once again, we have demonstrated our fast and systematic approach to sustainability and the transformation towards e-mobility through our ACCELERATE strategy,” added Volkswagen CEO Ralf Brandstätter. “We are thus making an important contribution to meeting the Paris climate goals.”
