California, for example, offers EV buyers an instant rebate of up to $2,500, with some income limits, while the new fee will cost buyers $100 per year. At this point, their greater numbers mean high-efficiency ICE vehicles are having a far bigger impact on falling gas-tax revenues than EVs. However, the fact that EVs use no gasoline at all is putting them in legislators’ crosshairs.
detach revenues from fuel consumption.
that varies with actual miles driven.
The cost of deploying public charging stations is another potential hurdle to cross should EV sales begin to hit BNEF’s forecasts over the next decade. Of special note are the direct current fast chargers (DCFCs) that allow EV owners to recharge in 20–30 minutes. Unlike the more residential-style Level II charging equipment one might see at a shopping mall or commercial office building, DCFCs draw a large amount of electricity—currently 50 kilowatts—during a brief period of operation. These periodic spikes can lead to exceptionally high electric-utility demand charges for equipment owners, especially if one of the few times a month the equipment might currently be used falls on a peak-demand period.
This added demand-charge expense could pose a major roadblock to ambitious EV-deployment forecasts, said Chris Nelder, a manager with Rocky Mountain Institute’s Electricity Group and co-author of a recent study on the issue for EVGo, operator of the largest U.S. publicly available DCFC network. For the study, Nelder and fellow researcher Garrett Fitzgerald analyzed data from EVGo’s 230 DCFCs in California and found that demand charges could be responsible for more than 90 percent of a station’s total electricity costs. If such rate structures aren’t addressed, they could hinder broader DCFC development, which could frustrate EV owners looking for a recharging experience as convenient as a gas station for ICE vehicles.
ment is in use, then drop to near zero once charging is complete.
In place of a demand charge, Nelder supports a variable electricity rate based on time of use. If this rate were reflected in the price an EV owner paid to recharge, it could encourage greater use in low-demand periods. Both Southern California Edison and San Diego Gas & Electric have proposed such rate structures that are specific to the needs of their territories.
There is still time to address the policy questions an EV fleet will raise in a nation whose fortunes have, in large part, been built on petroleum. Even McKerracher recognizes that BNEF’s prediction of EVs grabbing almost a quarter of all vehicle sales in a little over a decade is difficult to believe.
“There are still a lot of people who disagree, but there is much more optimism around EVs than there was a few years ago. We’re not the only ones raising it up,” he said.
Economic and political forces, including dramatic battery price reductions and a growing global policies promoting zero-emissions vehicles, are certainly lining up in the market’s favor. Now, it’s only left to see if car buyers will start lining up as well.
“That’s the single biggest question hanging over the market,” McKerracher said.
model, then DCFC becomes very important.
places with a lot of traffic and a lot of turnover.