Charging Ahead with Vehicle Electrification: …...Charging station infrastructure has evolved within three key areas of consumer use, including home charging, work charging, and public

ChargingAheadwithVehicleElectrification:UnderstandingDevelopmentsinInternationalandU.S.Markets—andImplicationsforWiderU.S.Adoption

TheAmericanAssociationofBlacksinEnergyPaulaGlover,President&CEO

AMERICANASSOCIATIONOFBLACKSINENERGY

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AmericanAssociationofBlacksinEnergy—AnEssentialVoiceinVehicleElectrificationElectricvehicle(EV)adoptionwillsoonamendtheautomotivelandscapeasitiscurrentlyknown—changinghowconsumerspurchase,howdealershipssell,howmanufacturersassemble,andhowconsumersdrive.AccordingtoarecentAAAsurvey,20%ofAmericanssaytheirnextvehiclepurchasewillbeanEV.1Whenreviewingactualsalesovertime,crediblesupportexistsshowingthatEVadoptionisgrowing—andinthenearfuturewillbecomeapreferredownershipoption.InDecember2017,plug-invehiclesalesregistered27monthsofconsecutiveincreases,representinga25%yearoveryeargrowthfrom2016to2017.2Itremainstobeseenwhetherthecurrenttrendmeans50millionAmericanswillbuyaplug-invehiclethenexttimetheypurchaseanautomobile.However,salesdatasuggestsmoreAmericansaremakingthatchoiceastechnologyimprovesandmanufacturingcostsdecrease.Asaccessibilitygrows,wecanexpectownershipofplug-invehiclestoexpandexponentially.Thisexpansionwillsignificantlyimpacttheallocationofbenefitsandburdensrelatedtoelectricitygeneration,transmission,anddistribution—directlyaffectingelectricityend-users,notwithstandingactualEVownership.ThegrowthofEVswillcreatetheneedtodevelopchargingstationinfrastructureacrosscities,townsandtheinterstatehighwaysystem.Thiswillalsoincludeinfrastructurefromwhichchargingstationswilldraw.Asaresultofincreasedvehicleelectrification,wecananticipateanincreasedrelianceontheexistinggrid,requiringadditionalgeneration,robusttransmission,andresilientdistribution.Thiswilldemandsignificantadditionaloutputsofnaturalgas,solar,wind,hydropower,nuclear,andotherelectricityresources.Generally,utilitiesmakeforwardinvestmentsingeneration,transmission,anddistributioninfrastructuretoensureelectricityreliability.Theseinvestmentsandrelatedcostsareregularlyreviewedbyvariousstateregulatorstoidentifyallowablerateschargedtoconsumers.Publicpoliciesimpactingrate-burdenallocation,resultingfrominvestmentsrelatedtoEVinfrastructure,shouldbeconsideredearlyinEVadoptionmaturation.ThiswillensureconsumersarenotunfairlyburdenedasratesresultingfromEVinvestmentsaredetermined.PolicyoftheAmericanAssociationofBlacksinEnergy(Association)dictatesthatenergyregulationsandlawsshouldbeequitableandnotburden(orbenefit)oneclassofconsumersoveranother.3Consistentwiththeseprinciples,theAssociationsupportsandadvocatesfortheuseofrenewableandcleanenergyresources,inadditiontothegrowthanduseofEVs.


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Policymakers,mustconsiderhowbesttoallocatefutureregulatoryratestructures,includinganexaminationoftheincentivesnecessarytoensureinvestmentcostsarenotunnecessarilypassedtoconsumersleastlikelytoadoptelectricvehiclesintheinitialphasesofmaturation.Additionalquestionsmustalsobeconsidered.ArethereappropriateavailableincentivesforutilitiestoavoidoverallrateincreasesrelatedtoEVinfrastructure,includinggridresiliency?Aretherenon-utilityprivatesectormodelsthatsupportorrepayutilityinfrastructureinvestments?Wherewillvehicleinfrastructurebebuilt?Andfinally,arethereothereconomicconsiderationsforexamination,suchaslinkagestoworkforcedevelopment?InternationalandNationalDevelopmentsinVehicleElectrificationIssuesconcerningEVinfrastructuredevelopment,whilecomplex,arenotparticularlynew.Fromaninternationalperspective,asignificantrecordexistsonwhichU.S.policymakerscanrelytoidentifybestpractices,particularlythoserelatedtoback-boneandlastmileinfrastructure.InternationalEVmarketgrowthisprimarilydrivenbypolicyframeworksdesignedtoeliminateorsignificantlyreducecarbonemissionsresultingfromautomobiles.WithintheseframeworksarevariouspolicyincentivesdirectedatparticipantsrepresentingnearlyeverypointofEVdeployment,includingresearchanddevelopment,manufacturing,theenduser,andthosewhomightsupportappreciableconsumeruse.Predominantlyledbynationalgovernments,incentivesincludegrantsandawardstodevelopbatterystoragecapacitysolutions,awardstobuildlastmileinfrastructuresuchaschargingstations,reducedoreliminatedtollcostsfordrivers,andrebatesortariffreliefrelatedtoEVpurchase.Incentivelayeringhasbeensosuccessfulforsomecountries,thatautomobilemarketsnowreflectEVcostswhicharesimilarto,orbetterthanthepurchaseofgasolineordieselpoweredvehicles.Whiletheseconstructedmarketsarenotsustainableoverlongperiodsoftime,policymakersaimtoestablishaselfsustainingmarketconsistentwiththeirenvironmentalgoals.AnareaofconstantdiscussionamonginternationalgovernmentsandproponentsofEVmarketsishowbesttodeterminewhatamountofinfrastructureisrequiredtoestablishequilibrium.Equilibrium,atleasttheoretically,representsthepointintimewhenconsumerconcernsregardingcharginganxietyareeliminatedsufficientlytoinduceEVpurchase,andnon-incentivizedmarketsencourageinfrastructuredeployment.Allagreethatabsenttheinfrastructure,theEVmarketwouldnotthrive.NorwayhasbeenrecognizedasamajorleaderinEVdeployment.4AlthoughChinawastheleaderinEVsalesin2017,at605,500,thisnumberrepresentsonly2.6%ofallvehiclesalesinthecountry.5However,Norway’ssalesfor2017equaled35%ofallvehiclepurchases—andforthemonthofDecember2017,EVsrepresented52%ofvehiclessold.6


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EVincentivesinNorwaywereinitiallyimplementedtoassistthecountry’sincumbentEVindustry,andlatershiftedaspartofanoverallclimateprotectionstrategy.ThetablebelowidentifiesNorway’sEVincentivehistory.7Year NorwayEVIncentives1990 Nopurchasetaxes(Approximately11,611U.S.Dollarsonaverageofgasolineanddiesel

automobiles)1996 Lowannualroadtax1997 Exemptionfromroadtoll1999 Freemunicipalparking(revisedin2017andnowdeterminedbylocalordinance)2000 50%reducedcompanycartax2001/2015 Exemptionsfrom25%VATonpurchase/leasing2003 Accesstobuslanes2009 FreeaccesstostateferriesTable1:HistoricalEVIncentivesinNorwayNorway’sgovernmentincentivestosupportcharginginfrastructurebeganasearlyas2009,andprovided100%fundingforchargingpointinstallations,resultinginapproximately1,800residentialsocketsthroughoutthecountry.8Theincentiveinvestmentequaledjustover610millionU.S.dollars(currentNorwegianKroneexchange).Morerecently,from2010-2014,Norwayalsoauthorizedincentivesforfastcharginginfrastructure,supporting100%ofinstallation(thoughnotoperation),againinvestingtheequivalentofabout610millionU.S.dollars(currentNorwegianKroneexchange).9Similarinvestmentsarebeingmadeinothercountriesaswell,includingtheU.K.,France,andtheNetherlands.InJulyof2017,U.K.authoritiesannounceda$25.8millioninvestment10tosupportEVinfrastructure,andcurrentlymakeavailablevariousEVownerincentivesaswell,includingroadtaxexemptionsonsomevehicles,grantstocoverpurchasecost,andgrantstooffsetthecostofresidentialchargingstations,upto75%.11InFrance,thegovernmentincentivizesexchangingdieselfueledvehiclesforEVs,includinghybridplug-ins,andprovideslicenseplatetaxexemptionsordiscountsforthesevehiclesaswell.Thecompanycartaxisalsoavailable.12TheNetherlands,alsoconsideredoneofthemostdevelopedEVinfrastructures,hasconsumerincentivesrivalingNorway,withpubliccharginginfrastructureprimarilypoweredbywindgeneratedenergy.Incentivesincludepurchaseandownershiptaxexemptions,andreductionsonthecompanycartax.13


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InternationalApproachtoInfrastructureDevelopmentChargingstationinfrastructurehasevolvedwithinthreekeyareasofconsumeruse,includinghomecharging,workcharging,andpubliccharging,thelatterofwhichwouldincludechargingaccessibilityatrestaurants,publicparkinglotsandgarages,movietheatres,etc.Alsoimportanttotheequationisfastcharginginfrastructure.AsnotedbyDaleHallandNicLutseyinEmergingBestPracticesforElectricVehicleChargingInfrastructure,“charginginfrastructureisbroadlybrokenintothreecategoriesbasedonspeed:Level1,Level2,andDirectCurrent(DC)fastcharging…”14ChargingLevel Voltage(V) TypicalPower(kW) LocationLevel1 120VAC 1.2-1.8kW PrimarilyresidentialinNorthAmerica

Level2 200-240VAC 3.6-22kW Home,workplace,publicFastCharge(DC) 400VDC 50kWormore Public-metropolitanareasTable2:TypesofChargingStationsAccordingtoavailabledata,Chinaleadstheworldintheactualnumberofchargingstations,withNorwayleadinginchargingstationavailabilitypercapita.15ThevastmajorityofavailablestationsareLevel2,andthisisconsistentthroughoutallinternationalmarkets,includingtheU.S.Whilethereissignificantinvestmentinfastcharginginfrastructure,particularlyindenselypopulatedmetropolitanareas,DCinfrastructuremakesupasmallerpercentageofchargingoverall,althoughthisisexpectedtochangeasEVadoptionwidens.Asinotherinfrastructure,NorwayalsoleadsinDCchargingdeployment.16ChargingInfrastructureBackboneThedeploymentofcharginginfrastructureinvolvesmuchmorethansimplyattachingachargingstationtothegrid.Asmanycountrieshavelearned,charginginstallationshaveanunavoidableimpactonexistinggridinfrastructure,andifnotcarefullyplanned,reducegridreliability.InNorway,authoritiesdiscoveredsignificantissuesduringpeakcharginghoursandwhenchargingstationswereinstalledcloselytogether.Issuesofdemandspikesbecamemoreconcerningasmorefastcharginginfrastructurewasinstalled.Accordingtoreports,atonetime,anenergyproviderproposedtoimplementhigherfastchargingcostsduringdesignatedpeakhours,asamechanismtodiscouragefastchargingandavoidgridload.17IntheUK,researchersstudiedpotentialimpactsofEVinfrastructureonthecountry’sdistributionnetwork.Accordingtothestudy,at33%penetration,“voltageimbalances,coupledwithoverloadeddistributiontransformerscouldseverelyimpairpowerlines.”18TheCommitteeonClimateChangesestimatesa37%U.K.EVpenetrationby2030,includingplug-inhybrids.19


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U.S.ElectricVehiclesandChargingInfrastructureWhendetermininghowbesttodeveloptheU.S.EVmarket,andconsideringnecessaryimpactsonthegrid,challengesexperiencedbyothercountrieswillexisthereaswell.Tosomedegree,issuescouldbeevengreater,consideringcurrentandplannedadvancesinbatteryandfastchargetechnologies.Bysomeestimates,whenreviewingactualenergyusage,today’sDCchargerscandrawelectricityintheamountofacommercialcomplex.20NotwithstandingEVadoptionratesininternationalmarkets,theU.S.isstillconsideredanindustryleader,bothinEVsalesandchargingdeployment.ThoughtheU.S.lagsinpercapitaownership,themarketisexperiencingsignificantgrowth,andalongwithChina,isconsideredoneofthetwolargestEVmarkets.21TheU.S.noteda27%increasein2017,with199,826EVsales.22CalifornialeadsintheU.S.inbothEVsalesandpubliccharginginfrastructuredeployment,whichaccountsfornearlyhalfofallU.S.sales.Approximately96,000EVswerepurchasedinthestatein2017,ledbySanJose,SanFrancisco,andLosAngeles,whichrepresented13%,7%,and5%,respectively,ofactualnationalshareandsalesvolume.23Accordingtoreports,LosAngelesledin2017intermsofactualnumberofsaleswithinthestate,with12,000sales,followedbySanJose,SanDiego,SanFrancisco,andIrvine.IfanydoubtexistsaboutthelevelofEVadoptioninCalifornia,areviewofEVsastotalshareoftheautomobilemarketprovidesguidance.InarecentCaliforniamarketupdate,theInternationalCouncilonCleanTransportation(ICCT)concludedthatin2017,ninecitiesinCaliforniareportedEVmarketshareexceeding15%.PaloAltoreported29%;Saratoga,24%;andLosAltos22%.WhenlookingattheproportionofCaliforniasalesaspartofallU.S.salesofEVmanufacturers,ICCTdemonstratedafewtrends.ForTesla,a100%EVmanufacturer,43%ofallofitsU.S.EVsalesoccurredinCAin2017.Thisnumberequaled94%forMercedes;69%forVolkswagen;56%forGM,and46%forToyota.24


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Table3:ShareofU.S.Automakers’EVSalesinCalifornia25MuchlikeNorway,California’sEVgrowthcanbeattributedtoalayeredmixofgovernmentandprivatesectorincentivestoencourageEVadoption,includingrebates,taxexemptions,HOVaccessexemptions,insurancediscounts,etc.26Alsosimilar,California’scharginginfrastructurehasexperiencedextensivegrowth,butwithgreaterexperimentation.Asageneralrule,thehighestnumberofCaliforniachargingstationsexistswherethegreatestnumberofEVunitsareidentified.Overall,thestatehas344chargingstationspermillionresidents,whereastheratiois107toamillioninthewholecountry(2017).27SanJose,SanFrancisco,andLosAngelesleadinshareofcharginginfrastructure,capturing13%,7%,and5%,respectively,28andasrecentlyasJune2018,thestate’sPublicUtilityCommissionapprovedupto$738millionforcharginginfrastructureprojectsoverthenextfiveyears.29Thoughmuchofthiswillbeforchargingheaviervehicles,PG&E,oneofCalifornia’sutilitycompanies,willinvest$22millioninfastcharginginfrastructure.30Additionally,SanDiegoGasandElectricwillinvestupto$137millioninresidentialcharginginfrastructure,withrebatesfor60,000homeownerswhowishtoinstallLevel2chargers.31

0%

20%

40%

60%

80%

100%

U.S.SalesShareinCalifornia


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Theparticipationorleadershipofutilitiesincharginginfrastructureisnotnew,internationallyorthroughouttheU.S.However,economicconcernsareprimarilyguidingU.S.utilities,andwilldeterminethepaceandrobustnessoftheirinfrastructureinvestments.Ina2017DeloitteUtilityElectricVehicleSurvey,Deloittesoughttoidentifythelevelofexistingutilityinfrastructureinvestments,andwhetherthenation’sutilitiesplannedadditionalstepsinthefuture.32Thesurveyconsistedofsome34utilities,representing31states,dividedbyinvestorowned(44%),cooperatives(41%)andmunicipalentities(15%).Whenseekingtodeterminewhyutilitieshavenotbeenmoreinvolvedincharginginstallations,66%revealedthatitwastooexpensiveandthattherewasnotasufficientbusinesscasetoeconomicallyjustifytheinvestment.Only23.5%ofthosesurveyedsaidtheyhaveinstalledcharginginfrastructure.33NotwithstandingthepromisinggrowthinpartsofCaliforniaandinternationally,itisaxiomaticthatadditionalcharginginfrastructure,includingLevel2andDC,willberequiredtoachievedesiredEVadoptionlevels.Thatsaid,manywouldargueutilitiesarebestequippedtomakethenecessarylargescaleinvestments.PaulAllen,et.al.,seemedtoagree,whentheystated“utilityownershipandoperationofchargingstationsmayreducetheriskofstrandedassetscomparedtootherinvestmentmodelsbecauseutilitiesmayhavegreatercapacityandexpertisetomaintaincharginginfrastructureacrosstheserviceterritorytoensuretheongoingreliabilityofthechargingstations.”34ModelsforElectricVehicleInfrastructureFromitsearlieststagesofdevelopment,America’s(andtheworld’s)automobilefuelsourceinfrastructurehasbeendrivenbyprivateindustry.Pharmacieswereamongthefirst“fillingstations,”andoftensoldfueltocustomersdrivingfrompointtopoint,andrepresentedtheinfrastructureusedforwhathasbeenrecordedasthe“firstroadtrip”whenBerthaBenz,thewifeofKarlBenz,travelednearly60miles,stoppingatpharmaciestorefuelwithbenzene.35Historically,privateinnovationandinvestmenthaveunderpinnedautomobiledevelopment,andthefuelinfrastructurethatsupportsit.Asthecostofcarownershipdecreased,moreconsumerspurchasedcars;fuelpumpingmechanismsweredeveloped;andthedrivingexperiencewasenhanced.36However,EVevolutionisoccurringsomewhatdifferently,motivatedbyenvironmentalurgencyandaccompaniedbysubstantialgovernmentinvestmentsandincentives.Consequently,realquestionsexistwhethergovernmentandtaxpayersalonecansuccessfullymotivateEVpurchases,andsupportthehighcostofcharginginfrastructuredeployment.Althoughtaxincentivesandrebateshavebeenuseful,massEVadoptionwilllikelyoccurwhenvehiclesbecomemoreaffordable,muchastheModelTwaswhenHenryFordmadetheautomobileavailabletomiddleAmerica.Additionally,aspurchasepricedeclines,fuelinginfrastructurewillbenecessary—allowingconsumerstoovercomerangeanxiety.


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Thequestionsforpolicymakers(andconsumers)are:Howquicklycantheinfrastructurebebuilt,andatwhatcost?Thenation’sutilitycompanies,includingruralco-ops,publicutilities,andinvestorownedutilities(IOU),arelikelybestpositionedtoleadincharginginfrastructureinvestmentsanddevelopment.Eachisalreadypartofaregulatoryframeworkatthefederal,stateorlocallevel,whereinregulatorsandutilitiesmanageandappropriatelyidentifystressonthegrid;analyzeimpactsongenerationmarkets;build-outreliabilitytofacilitateLevel2andfastcharging;monitorcyberrisks;andbalancecustomerrates.UtilityOwnershipModelsAccordingtoaGeorgetownClimateCenteranalysis,supra,afullyutility-ownedEVcharginginfrastructureservesnumerousadvantages,includingaccesstocapitaltomakethenecessaryinvestmentsforresearchanddevelopment,abilitytoconductbuild-outthroughoutadesignatedserviceterritory,andexperiencewithmanagingusagedataandgridreliability.37A“utilityowner-operatormodel”wouldconsistoftheregulatedutilityowningandoperatingallaspectsofcharginginfrastructure,includingthechargingstationequipmentandtheelectricityutilityinfrastructurethatsupportsit.OtherpotentialmodelsconsideredbytheClimateCenterincludethe“makeready,”“businessasusual,”and“utilityincentive”models,wheretheutility’sroleislimitedatthemeterorshortlythereafter.Proponentsoftheselatterapproachescautiontheallutilitymodelpreventscompetition,andexcludesprivateinnovationastheEVchargingmarketdevelops.

Figure1.ChargingStationInfrastructureModels(GeorgetownClimateCenter,M.J.Bradleyand

Associates)Until2015,CalifornialimitedIOUownershipandoperationofchargingstationinfrastructure,concernedthatcompetitivemarketswouldbedisadvantaged.38ThestatewasalsoconcernedthatcostincurredbyutilitieswouldbepassedtoconsumersleastlikelytoadoptEVsintheearlyorintermediatestagesofmarketgrowth.Anumberofstateshavealsoimposedrestrictions,althoughsomehavebeguntoexperimentwithvariousinfrastructuremodels,allowinggreaterutilityownershipandparticipation.


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PolicyDevelopmentsandDiverseCommunitiesEarlydecisionsbyutilitycommissionslimitingownershipofcharginginfrastructurehavesomemerit,particularlywhenbasedoncustomerratemakingconcerns.InitialEVadoptionunquestionablyhasbeendominatedbyhigherincomeconsumers.DatafromCalifornia,whereEVpurchasesarehighestinthenation,showthevastmajorityofownershipisinthehighestincomeareasofthestate.ThosecitiesinCaliforniawhereEVmarketshareequals15%ormoreareamongthewealthiestcitiesinthestate.39AsEVmarketshavedeveloped,adoptionratesareincreasinginmiddleandlow-incomeareas—andmanufacturersarebeginningtotargettheseconsumers.Forexample,TeslahasputforwardconsiderableefforttolaunchitsModel3,base-pricedatabout$35,000(longerrangemodelsover$50,000),andtheChevyBolt,atabout$40,000.Thatsaid,lessexpensiveEVmodelswilllikelyhaveshorterchargeranges,whichcouldreduceattractivenessfortargetedincomebuyers.Thisresultcouldbemitigated,makingthecaseforbuildingextensivefastchargeinfrastructureinmoderateandlow-incomecommunities.Appropriately,manystateutilitycommissionsarenowrethinkingpreviousinfrastructureownershipprohibitions,recognizingtheneedtomotivatewiderEVacceptance,andtomeetestablishedcleanenergyobjectives.Thisisastepintherightdirection,accordingtoMaxBaumhefneroftheNaturalResourceDevelopmentCouncil,whobelievesutilitiesaregoodatdevelopingtheinfrastructurethat“EVdriverswantand[is]sorelylackingatthispoint.”40Asoneapproach,relatedtoconcernsaboutequity-basedinfrastructuredevelopment,California’sPublicUtilityCommissionrecentlyapprovedinvestor-ownedutilityprojectstotalingover$760million.41Thedecisionisrecognizedforitsfocusonfastchargedevelopmentindisadvantagedcommunities.Additionally,Californiaishometoanimportant“hybrid”approachtoutilityinfrastructureownership,agreeingtoallowIOUstoowninfrastructure,includingchargingstations,whenlocatedinunderservedmarkets,whilelimitingownershipinthoseareasnotconsideredunder-resourced.42Eventually,technologyandincreasedchargingdeploymentwillmakewideEVadoptionattractive.Toensurecharginginfrastructureisavailableinunder-resourcedcommunitiesasinotherpartsofautility’sserviceterritory,IOUparticipationandownershipwilllikelyberequired.Suchastructurepermitsdiversecommunitiestoachievethebenefitofpotentialrateincreasesassociatedwithcharginginfrastructureinvestments.Arobustregulatoryframeworkwillalsobenecessarytoensureequitableandfairratestructures.


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PersonalElectricVehiclesandUnder-ResourcedCommunitiesByoneofthemoreoptimisticestimates,U.S.EVadoptionsharewillreachover50%by2030.43IfcurrentadoptiontrendscontinuetomatchthosestatesandcitieswithheavyEVandinfrastructureincentives,thenfromanationalperspective,EVgrowthwilllikelyexpandfromCaliforniaandcoveranumberofstateswithsignificantAfricanAmericanpopulations.InarecentsurveybytheElectrificationCoalition,researchersrankedthetop10U.S.statesbytheirincentives,andcrossmatchedeachbypercentageofEVmarketsharesales.California,Maryland,Connecticut,Massachusetts,andNewYorkroundedoutthetop5.TopU.S.StatesbyIncentives44

SignificantStateIncentives(ByRank)

TotalEVSales(2011-2017)

MarketShareSalesWithinState

(2017)

AfricanAmericanDemographics/

PopulationRank45California 356,241 5.02% 3,792,045(8%)/29Maryland 11,604 1.05% 1,945,309(32%)/5Connecticut 7,502 1.39% 471,282(13%)/22Massachusetts 13,834 1.35% 676,366(10%)/25NewYork 30,645 1.03% 3,792,045(19%)/11NewJersey 16,716 0.91% 1,540,133(16%)/16Vermont 2,483 2.13% 12,089(2%)/48RhodeIsland 1,347 0.92% 103,558(9%)/28Oregon 15,457 2.36% 125,542(3%)/42Maine 1,657 0.80% 27,569(2%)/46Table4:StateIncentiveRankingsHowever,incentivesalonemaynottellthefullstory,asevidencedbyWashington,Hawaii,theDistrictofColumbia,andColorado.Theseareaswerenotidentifiedasheavilyincentivized,butrankhighinmarketshareofsales,someofwhichhavenotableAfricanAmericanpopulationsaswell.


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TopU.S.StatesbyEVMarketShareSalesStatebyRank TotalEVSales(2017) MarketShareSales

WithinState(2017)AfricanAmericanDemographics/

PopulationRank46California 94,873 5.02% 3,792,045(8%)/29Washington 7,068 2.51% 409,981(6%)/34Oregon 3,988 2.36% 125,542(3%)/42Hawaii 1,934 2.33% 50,825(4%)/40Vermont 871 2.13% 12,089(2%)/48DistrictofColumbia 398 1.87% 336,753(49%)/1Colorado 4,156 1.57% 310,304(6%)/35Connecticut 2,304 1.39% 471,282(13%)/22Massachusetts 4,632 1.35% 676,366(10%)/25Maryland 3,244 1.05% 1,945,309(32%)/5Table5:U.S.EVSalesandAfricanAmericanPopulationRankingsFullU.S.EVadoptionmeansincentiveswillcontinue—andlikelyconsistofspecifictargetstoreachthosemarketsnotyetpartofEVevolution.ThisisanareainwhichCaliforniahasdemonstratedsignificantleadershipforvehiclepurchaseandcharginginfrastructure.47Notably,Californiahasbeguntocurtailincentivesforwealthierbuyers,eliminatingrebateswhenincomesexceed$150,000forindividuals,$204,000ifheadofhousehold,and$300,000forjointfilers.48Atthesametime,thosewithincomesof$36,420orless(individuals)orearningunder$75,300(familyoffour)receiverebatesthatare$2,000morethanthestandardamount.49AlthoughAfricanAmericanandotherminorityautobuyershavenotbeenalargepartofEVpurchasesinthepast,somehavesignaledadesiretojointhemarketforthesamereasonsasearlyentrants.AccordingtoarecentstudybyThinkNowResearch,AfricanAmericansscoredsimilartootherethnicandracialgroups,includingCaucasian,HispanicsandAsians,whencitingapreferenceforgasalternativeenginesforenvironmentalandsustainabilityreasons.50Whilethestudyrevealedallbuyersstillprefergasengines,AfricanAmericansrankedhigherthanorashighastheircounterpartsintermsofelectricvehiclepreference,at8%AfricanAmerican;8%Hispanic;6%white,and7%Asian.51IfEVadoptionistotakeholdinthecountry’surbanareas,whereamajorityofethnicandracialgroupsreside,thenaccessibilityforEVusewillhavetoincrease.AsnotedinarecentarticleintheSanDiegoTribune,“EVadoptionhaslargelybeenasuburbanphenomenon…butforpeoplewholiveinapartmentsandcondominiums,simplyfindingaplacetochargetheirEVscanbesodifficultthatitsometimeskeepsthemfromconsideringbuyingacarthatrequiresplug-in.”52


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Basedonexistingdemographictrends,AfricanAmerican,Hispanics,Asians,andothersaccountfor56%ofurbancountypopulations,32%ofsuburbancountydemographics,and21%orruralcountypopulations.53Ifsolelylefttounregulatedmarkets,urbanEVacceptancecouldbeslowedconsiderably,sinceprivatecapitalismorelikelytogravitatetowhereEVcarsare,versuswheretheyneedtobe.Municipal,stateandfederalincentiveswillcontinuetoplayasignificantroleindeterminingwhereurbaninfrastructurebuild-outoccurs,howquickly,andbywhom.Governmentparticipationiscriticaltoensurecharginginfrastructuredevelopmentoccursinurbancommunities,withspecificinvolvementofstateutilitycommissions.

HedgingEV’sFutureAccordingtorecentannouncementsfromBMW,theGermanautomakerexpectstohaveanexcellentshotatcapturingEVmarketsharefromTesla.AmongthemajormanufacturersidentifiedinTable3,Teslaistheonlycompanywhosetotalsalesare100%electricvehicles.Foreveryoneelsethefocusisdivided,meetingtheneedsoftoday’sgaspoweredconsumers,whileanticipatingEV’sfuture—andrespondingtozeroemissionregulatoryrequirements.BMWbelievesithassolvedtheissueoffracturedmanufacturing(oneforgasandanotherforelectric),bymovingtoamodularplatformthatwilladapttomarkettrendsandconsumerneeds.Theseplatformswillaccommodateelectric,hybrid,orinternalcombustionpowertrains,withEVsrangingfrom134to800horsepower,andhaveamaximumdistanceofabout600kilometers(372miles)percharge.54BMWhasalsoplannedaconceptplatformwithadistancerangeupto700kilometers(435miles),witha10minutesDCfastchargeprovidinganadditional100kilometers.BMWisnotaloneinitssenseofEVmarketuncertainty—anddecidedlyflexibletoadapttochangingeconomics.Theoilandgasindustryhasplannedasimilarstrategy.UnconcernedaboutincreasesinEVmarketshare,theindustrypredictsthatiftheanticipated41millionEVscomeonlineby2040,thiswouldequalapproximately8%oftoday’sgridcapacity,muchofwhichispoweredbynaturalgas.Moreover,oilisaflexibleresource,andshouldconsumeruseforcarschange,oilproductsandbyproductswillnecessarilyshifttootherfueluses,includingbutnotlimitedtojetfuelandplastics.55Somearepredictinggasandelectricvehicleswillco-existforlongperiodsoftime—andunderaworstcasescenario(abanoninternalcombustionpassengervehicles),theindustrywouldexperiencenomorethana10%loss.56Therationaleisthe“demandgrowthforoilinsectorslikepetrochemicals,[and]heavytransportkeepsexpandingsignificantly,[keeping]thesesegmentslargelyinsulatedfromfutureswitching.”57


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Asarelatedmatter,shouldarealreductioninconsumergasolineuseoccur,governmentsshouldalsoexpectareductioninrevenuefromgasolinetaxes.Stateandlocalgovernmentscollectednearly$44billioninfueltaxesin2015,accordingtotheTaxPolicyCenter.58Atthefederallevel,basedonaMarch2018updatedreport,U.S.fueltaxesequal18.40centsforeverygallonofgas,and24.04centsoneachdieselgallon.59Absentanappropriatereplacement,shouldgasolineanddieselusesignificantlydecrease,policymakerswillneedtoidentifysubstitutetransportationdollarstofundstateandU.S.projects.Somehavealsoraisedenvironmentalconcerns,butrelatedtothebatterytechnologyonwhichelectricvehicleswillrely,bothastomininganddisposal.Ifnotplannedoutnow,in15-20years,wemightencounteranenvironmentalfootprintthatadverselyimpactsthegreenenergyfuturesomanyhaveimagined.60

ConclusionandRecommendationsTheautomotivemarketshiftingtoplug-inelectricvehiclesisdirectlyconnectedtoenvironmentalpublicpolicy,primarilypoweredbycapital,tax,andotherincentivesneededtospurconsumeradoption.Althoughelectricvehiclesarenotnewtotheautomobilelandscape,advancesintechnology,andcapitalinvestmentsmadebycompanieslikeBMW,Tesla,GMandothers,arelikelytoestablishEVsasthealternativefuelvehicleofthefuture.Thatsaid,U.S.marketshaveyettoreachapointwheresalesoperatefullyabsentincentives.Additionally,sufficientcharginginfrastructure,includingfastcharging,hasyettobedeployedtoeliminateconsumercharginganxiety.Moreover,EVpricingmaystillbeperceivedastoohigh(particularlywhencoupledwithcharginganxiety)forconsumerstopurchaseanEVastheirmainorsecondaryautomobile.Additionally,toexpandEVadoptionfromthesuburbstourbancountiesandcities,significantinfrastructuredevelopmentwillberequiredtomeettheneedsofapartmentandcondominiumresidents.AsEVincentivescontinuetodevelop,theAssociationsupportspoliciesthatencouragemarketentryinurbancommunities,particularlytargetingmoderateandlow-incomeconsumers.TheAssociationalsosupportsinfrastructuredevelopmentpoliciesrequiringLevel2andfastchargingdeploymentinplaceswherepeopleofcolorandmoderateincomesreside,includinginurbancountiesandcities.Inthattheseinvestmentsoftenrequirelargeandintensivecapitalinvestments,includinggridinfrastructureimprovements,regulatorsandothersshouldidentifybestmodelstoincentivizegridinvestmentstopavethewayforurbanEVadoption.Utilityregulatorswillplaythenecessaryandessentialroleofestablishingequitablemarketgrowthacrossdiverseincomesandcommunities.


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EndNotes

1EllenEdmonds,AAA:1-in-5U.S.DriversWantanElectricVehicle,AAANewsroom(May8,2018),https://newsroom.aaa.com/2018/05/1-in-5-us-drivers-want-electric-vehicle/;Totalsalesin2017equaled199,826EVs.2StevenLoveday,IfYouThoughtitCouldn’tGetAnyBetter,We’veOnlyJustBegun,(January3,2018),https://insideevs.com/december-2017-plugin-electric-vehicle-sales-report-card/.3AmericanAssociationofBlackinEnergy,DistributedGenerationPrinciples,http://aabe.org/docs/pages/1046/file/DistributedGeneration_FINAL_8%205x11.pdf.4ErikLorentzen,PeterHaugneland,ChristinaBu,andEspenHauge,ChargingInfrastructureExperiencesinNorway-TheWorldsMostAdvancedEVMarket,EVSymposium,Stuttgart,Germany(October9-11,2017).5BobGraves,When--andWhere–WillElectricVehiclesRuletheRoads?(Governing)(February12,2018),http://www.governing.com/topics/transportation-infrastructure/col-electric-vehicles-sales-forecasts-norway.html?utm_term=When%20--%20and%20Where%20--%20Will%20Electric%20Vehicles%20Rule%20the%20Roads&utm_campaign=Trump%27s%20Infrastructure%20Plan%20Is%20Finally%20Here.%20Will%20States%20Like%20It&utm_content=email&utm_source=Act-On+Software&utm_medium=email.6Id.7ErikLorentzen,PeterHaugneland,ChristinaBu,andEspenHauge,at3.8Id.9Id.10 Metering&SmartEnergyInternational,Analysis:GlobalInvestmentsinEVInfrastructure

Rollout(August1,2017).

11VivianZhou,3ElectricCarIncentivesYouNeedtoKnowinEurope,EVBox(July4,2017),https://blog.evbox.com/electric-car-incentives.12Id.13Id.


15

14DaleHall,NicLutsey,EmergingBestPracticesforElectricVehicleChargingInfrastructure,TheInternationalCouncilonCleanTransportation,at3(October2017).15Idat15.16Idat16.17CaterinaBrandmayr,DustinBenton,AnishaGeorgeandChaitanyaKumar,PowerPeople-HowConsumerChoiceisChangingtheUKEnergySystem,GreenAlliance,at16(April2017).18Idat22.19Id,sourcedfrom,CCluzeletal,2013,Pathwaystohighpenetrationofelectricvehicles–reportpreparedforCommitteeonClimateChange. �

20PaulAllenandGraceVanHorn,M.J.Bradley&Associates,MathewGoetz,JamesBradbury,KathrynZyla,UtilityInvestmentsinElectricVehicleChargingInfrastructure:KeyRegulatory

Considerations,GeorgetownClimateCenter,at14(November2017).21JieyiLu,ComparingU.S.andChineseElectricVehiclePolicies,EnvironmentalandEnergyStudyInstitute(February28,218),http://www.eesi.org/articles/view/comparing-u.s.-and-chinese-electric-vehicle-policies.22Seenote1above.23TheInternationalCouncilonCleanTransportation,CaliforniaContinuedElectricVehicleMarketDevelopment,Briefing(May2018),https://www.theicct.org/sites/default/files/publications/CA-cityEV-Briefing-20180507.pdf.24Idat6.25Id.26BradBerman,IncentivesforPlug-inHybridsandElectricCars,PluginCars(March7,2018),http://www.plugincars.com/federal-and-local-incentives-plug-hybrids-and-electric-cars.html.27TheInternationalCouncilonCleanTransportation,at8.28Id.


16

29SeanO’Kane,ThreeU.S.StatesWillSpend$1.3BilliontoBuildMoreElectricVehicleCharging,TheVerge,(June1,2018)https://www.theverge.com/2018/6/1/17416778/california-new-york-electric-charging-investment-stations.30Id.31Id.32DeloitteCenterforEnergySolutions,DeLoitteUtilityElectricVehicleSurvey(2018).33Id.34PaulAllenandGraceVanHorn,M.J.Bradley&Associates,MathewGoetz,JamesBradbury,KathrynZyla,at10.35TheHistoryofFuelsRetailing,http://www.convenience.org/yourbusiness/fuelsreports/gasprices_2013/pages/100plusyearsgasolineretailing.aspx.36TheNationalMuseumofAmericanHistory,http://americanhistory.si.edu/collections/search/object/nmah_1326341.37PaulAllenandGraceVanHorn,M.J.Bradley&Associates,MathewGoetz,JamesBradbury,KathrynZyla,at9-11.38MarthaT.Moore,ShouldUtilitiesBuildChargingStationsforElectricCars,Stateline,PewCharitableTrust(September11,2017),http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2017/09/11/should-utilities-build-charging-stations-for-electric-cars.39TheInternationalCouncilonCleanTransportation,at11.40MarthaT.Moore,at4.41JakeLevineandMichaelRebuck,StateInvestmentsinElectricVehicleChargingInfrastructure,CovingtonandBurlingtonLLP(June23,2018),https://www.insideenergyandenvironment.com/2018/06/state-investments-in-electric-vehicle-charging-infrastructure/.


17

42ConstanceDouris,WhoShouldPayForElectricVehicleChargers?WhoShouldProfit?Forbes(November8,2017),https://www.forbes.com/sites/constancedouris/2017/11/08/who-should-pay-for-electric-vehicle-chargers-who-should-profit/#51a5cd644aa5.43StephenLeahy,ElectricCarsMayRuletheWorld’sRoadsby2040,NationalGeographic(September13,2017),https://news.nationalgeographic.com/2017/09/electric-cars-replace-gasoline-engines-2040/.44WadeMalone,TheElectrificationCoalitionRanksCurrentZEVStatesbyTheirPolicesforElectricVehicle(EV)Adoption,InsideEVs(June18,2018),https://insideevs.com/best-electric-car-policies-10-u-s-zev-states-ranked/.45BlackDemographics,U.S.CensusBureau2016Estimate(rankingsby%ageofAfricanAmericanpopulation),http://blackdemographics.com/population/black-state-population/.46Id.47Seesupra,PolicyDevelopmentsandDiverseCommunities.48RobNikolewski,ElectricVehicleChargingStationsTrytoGainFootholdinUrbanAreas,SanDiegoUnion-Tribune(August3,2018),http://www.sandiegouniontribune.com/business/energy-green/sd-fi-evs-chargingstations-20180803-story.html.49Id.50ThinkNowDrive,AutomobileBuyingTrendsandHabitsReport2017—HowAfricanAmericans

areDrivingAutomotiveTechnologyTrends,at12(April2017).51Id.At11.52RobNikolewski.53PewResearchCenter,WhatUnitesandDividesUrban,SuburbanandRuralCommunities(May22,2018),http://www.pewsocialtrends.org/2018/05/22/demographic-and-economic-trends-in-urban-suburban-and-rural-communities/.54VictorJonGoico,BMWUnveilsElectric-Carplansfor2021andbeyond(January26,2018),https://www.theglobeandmail.com/globe-drive/news/industry-news/bmw-unveils-electric-car-plans-for-2021-andbeyond/article37703938/.


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55Here’sWhyElectricCarsWont’HurttheOilIndustry,(February8,2017),https://drillers.com/heres-electric-cars-wont-hurt-oil-industry/.

56DanEberhart,TheOilSectorWillSurvivetheArrivaloftheElectricCarJustFine,Forbes(March22,2018),http://www.hl.co.uk/news/2018/3/22/the-oil-sector-will-survive-the-arrival-of-the-electric-car-just-fine.57Id.58MotorFuelTaxRevenue1977-2017,Forbes(October28,2017),https://www.taxpolicycenter.org/statistics/motor-fuel-tax-revenue.59U.S.EnergyInformationAdministration,https://www.eia.gov/tools/faqs/faq.php?id=10&t=10.60HenrySanderson,ElectricCarGrowthSparksEnvironmentalConcerns—MiningofRawMaterialsofLithium-IonBatteriesinSpotlight,FinancialTimes(July17,2017),https://www.ft.com/content/8342ec6c-5fde-11e7-91a7-502f7ee26895.

Charging Ahead with Vehicle Electrification: …...Charging station infrastructure has evolved within three key areas of consumer use, including home charging, work charging, and public

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