Climate Tech Break: Paving the Way for EVs
The accelerated adoption of electric vehicles (EVs) has changed the automotive industry forever. Tax credits and subsidies have lowered the initial cost barrier for many. According to the Edison Electric Institute, the number of EVs on U.S. roads is projected to reach 26 million in 2030, up from 19 million in 2018. All eyes now turn to whether or not domestic infrastructure to charge all those EVs can keep pace.
EVs are on the rise
This rise in EV popularity can be attributed to several factors, including a greater awareness of the environmental impact of traditional gasoline-powered vehicles and advances in EV technology. The decreasing cost of EV batteries and the availability of government incentives and tax credits also have contributed to this increased adoption.
As more automakers invest in EV technology, the number of available models on the market is increasing rapidly. Visual Capitalist reports 48 EV models were available for sale last year in the U.S., compared to just eight in 2012. It’s expected that there will be more than 130 models on sale in the U.S. by 2024, with companies such as Ford and General Motors investing heavily in EV production facilities.
Charging infrastructure needs to quadruple by 2025
But the U.S. doesn’t have nearly enough chargers to accommodate this skyrocketing growth in EV sales and production. President Biden's bipartisan infrastructure law has provided $5 billion to help states install EV chargers in high-demand locations such as highways. While the Department of Transportation has made it clear that fund allocation will be the states’ responsibility, questions will surely arise regarding the necessity of charging infrastructure in urban environments such as cities with multi-family residences.
“Specifically, the U.S. needs to quadruple its charging infrastructure by 2025,” according to Business Insider’s Alexa St. John. In response to the demand for EV charging infrastructure, energy service companies (ESCOs) are poised to help cities and building owners connect chargers by leveraging long-term benefits like charging fees and energy cost savings to reduce upfront costs.
Challenges for the power grid
Power consumption also remains a critical concern. Leading consulting firm McKinsey estimates that total fleet consumption could increase from 11 billion kilowatt-hours today to a whopping 230 billion kilowatt-hours in 2030, representing 5% of domestic electricity consumption by the end of the decade. This demonstrates that strengthening and retrofitting our existing power grid must be a top priority for the private sector and lawmakers in paving the way to fully electrified transportation.
At Silverline, we’re watching several angles such as how low-and middle-income communities will be prioritized in the coming push to build charging infrastructure, federal and state funding for charging systems, and how additional means of generation can come online to support the growing need for transportation electrification.
Transportation generates the largest share of greenhouse emissions in the U.S., so making the switch can be one of the best ways to slow the effects of global warming. While the transition to EVs is an important step towards decarbonization, it cannot happen overnight. A gradual and strategic approach that addresses the infrastructure, consumer, and policy challenges is needed to achieve a sustainable -- and equitable -- transition to electric mobility.
