Electric Vehicle Adoption: What the Feds Won’t Do, the States Will
I don’t just write about them, either.
At the moment, my household gets about half of its energy from our solar array. (Next year, it will be 100%.) My wife drives an all-electric Nissan Leaf. I’m presently handicapped and don’t drive at all.
Clearly, I’m ready and willing to adopt these technologies. But the biggest problem has been the lack of progress on the federal government’s end to promote the use of electric vehicles (EVs) and the adoption of solar.
I guess I shouldn’t be too surprised. They show a lack of progress on just about everything else. Fortunately, we have state and municipal governments that can actually get things done...
Local Governments Take the Wheel
In the case of EVs, what the feds won’t do, states and municipal governments will. The following chart shows charging infrastructure, EV share and EV promotion activities (incentives offered to early adopters)...
The data comes from a recent study looking at EV promotion and adoption in the U.S. It looks at the 25 largest U.S. metropolitan areas. They represent more than 42% of the population, 46% of auto sales, 67% of new EV registrations and 53% of EV charging stations.
All data is as of the end of 2014. After analyzing, researchers drew four conclusions...
The first is that states with leading EV sales have attractive incentives for buyers. Not too surprisingly, car manufacturers with EV models are targeting these areas.
Five of the seven leading EV cities are in states that subscribe to California’s “Zero Emission Vehicle” program. If you live in San Francisco, you hit the jackpot with EV rebates.
According to CA.gov’s Plug-In Electric Vehicle Resource Center (how many states have one of these?), you can get a boatload of incentives. Here’s what you get if you live in San Francisco and buy an EV:
- $1,500 for retiring an internal combustion engine vehicle
- $7,500 federal EV tax credit
- $5,000 California rebate
- $2,500 rebate from San Francisco
That’s a total of $16,500 off the price of your new EV. It’s no wonder Californians are adopting EVs in droves.
The second finding from the study was that different cities are leading the EV charge in a number of ways. California’s commitment to EVs and consumer incentives to buy them is a long-term one.
Seattle also has a mix of EV incentives. The city claims it’s been focused on being “EV ready” since 2009.
Setting an example for the public to follow, Seattle is converting its fleet of city-owned vehicles to all-electric. So far, it has 43 of them and claims to have saved more than 7,600 gallons of fuel.
The city provides potential EV owners with a study that talks about Seattle’s charging infrastructure. It’s an attempt to ease new EV owners’ “range anxiety” fears.
Atlanta has EV subsidies, and it allows drivers of these vehicles access to carpool lanes on its highways. As a result, its EV sales are over eight times the national average.
Portland, Oregon, has the most extensive EV charging network of any U.S. city - 109 stations, in total. Its EV adoption rate is three times the national average.
The study’s third finding is that EV adoption has many stakeholders. These include state and local governments, as well as private entities like malls and parking garages.
Taken together, they are driving EV growth. Model availability, actions by cities and towns, charging infrastructure and consumer incentives all need to come together to kick-start EV adoption.
The last finding of the study was that cities, not states, are the important focal point for government collaboration with utilities, the auto industry and EV advocates.
The Real EV Tipping Point
The study does a good job of looking at the role small governments play in EV adoption. However, there’s another factor it missed… something that will act as the real tipping point for EV adoption. What is it?
Cheap battery prices.
In less than five years time, EV battery prices are on track to drop 50%. Right now, they are decreasing at a rate of 8% per year.
It’s one of the reasons Tesla Motors (NYSE: TSLA) is building its battery “Gigafactory” outside of Las Vegas. Elon Musk will drive the price of batteries down with volume manufacturing.
So if you’re contemplating the purchase of an EV, you can expect less expensive prices in the years ahead. Or you can be an early adopter like my wife and me.
I can tell you, driving past gas stations is quite satisfying.
Editorial Note: Like Dave, we’re big fans of renewables - both as a safe energy source and an investable trend. We know many of you feel the same way. However, some folks are understandably skeptical about whether solar and wind can ever overtake fuel sources like oil and natural gas. But as you know, refiners aren’t exactly making money hand-over-fist these days, either. To that point, in tomorrow’s issue, Matthew Carr will ask the question: “Is crude on the same suicide path as coal?” Don’t miss it. (And don’t forget to check out Matt and Dave’s weekly contributions to Energy & Resources Digest here.)