How do we prepare for the “hockey stick growth” of the EV market?

By Saumya Jain

The latest forecasts by Bloomberg show the current sales of electric vehicles increasing from 1 million worldwide, to 11 million in 2025, and then surging to 30 million in 2030. Many other forecasts come very close, and a recent report by the Lawrence Berkeley National Laboratory describes the future market of EVs as following a ‘hockey stick growth’ pattern. The report is tenth in the series Future Electric Utility Regulation, and discusses the role of utility companies, the auto industry, and the consumer perspective with regard to the future of EV adoption in the United States. It puts forward various differing viewpoints on crucial questions like:

  • What are the potential benefits and risks of transportation electrification?
  • What type of utility infrastructure would be needed?
  • Who is going to pay for it and how can the distribution be made equitable?
  • What policy and regulatory changes with EV adoption.

The report highlights the huge gap between EV market projections and current infrastructure investment plans. According to the researchers, not even California, with its progressive Zero Emission Vehicle mandate and market incentives, is ready to provide the infrastructure that the near-future market projections demand. In an analysis of Hawaii’s efforts to shape a clean energy future, SSTI pointed out a similar concern. If every vehicle in the state were to be electric, but vehicle miles traveled remained the same, the current electrical production would be insufficient.

Though the role of public sector leadership, utilities, and private firms in the development and adoption of transportation electrification is still being debated, a representative from the Alliance for Transportation Electrification stresses the need for the efforts to be proactive rather than reactive. To ensure adoption and environmental justice regional planners, policy makers, and state energy offices need to be active participants along with utility commissions and the private sector.

There are various market models discussed in the report, all of which define the role of utility commissions as an important catalyst to ensure equitable adoption and distribution. The industry and policy makers together need to design protocols and infrastructure standards that are interoperable for a smooth transition between regions and states, very much like the telecommunication industry. The report emphasizes the need for long-term country-wide policies to be in place rather than short-term capitalist interests. Jonathan Levy from EVgo describes the most pressing industry needs as building awareness among consumers and pushing the highest VMT users, especially the ride-share companies, for rapid adoption.

Like all other adoption trends, there exists a social risk that low-income and challenged communities would be the last to benefit from the electrification of transportation and would be the most burdened by its payment rates. To avoid this, the report calls for EV investment options that equitably allocate costs and benefits of EV infrastructure, like electrification of public transit, school buses, and affordable car-share programs.

The various perspectives discussed in the report make it clear that for a more rapid and uniform adoption of electrified transportation, a very consolidated effort is required by all of the stakeholders, which include not only utility commissions and private firms but also the state transportation departments, regional planners, local leaderships, and environmental justice groups.

Saumya Jain is a Senior Associate at SSTI.