Monthly Archives

January 2021

Electric Vehicles Are Front and Center for the Biden Administration

President Joe Biden signs his "Made in America" executive order

 

President Joe Biden signs his "Made in America" executive orderElectric vehicles (EVs) are taking center stage in Washington D.C. policy discussions.

President Biden announced plans this week to convert the entire fleet of federal vehicles, estimated to number 645,000, to electric as part of his Buy American Executive Order. It’s just the latest in a series of statements and pledges that underscore the president’s focus on electrifying our transportation system.

As a presidential candidate, Biden talked regularly about the many advantages of EVs. His $2 trillion Energy and Climate Plan calls for expanding EV tax credits to cover hundreds of thousands of additional vehicles, as well as the installation of 500,000 EV chargers across the United States.  

With this latest Biden EV announcement, it is clear that this White House views EVs as a central strategy  for addressing multiple challenges confronting the nation. 

US Federal Fleet to Go Electric, Says Biden 

“The federal government…owns an enormous fleet of vehicles, which we’re going to replace with clean electric vehicles made right here in America by American workers, creating a million auto worker jobs and clean energy and vehicles that are at zero emissions,” Biden said on  Monday.  While the timeline of this transition remains unclear, the focus on EVs is not. 

On fuel, maintenance, power and performance, electric fleet vehicles are unmatched. Current limitations are supply and initial sticker price, but as manufacturing volumes increase and battery technology advances, these should rapidly subside. 

Some states already provide incentives for organizations to purchase fleet vehicles. In Massachusetts, for example, under the state’s MOR-EV program, commercial and nonprofit fleets, which include company-owned vehicles, companies with vans, rental car companies, and companies that provide vehicles to employees instead of paying mileage, are eligible to receive purchase rebates of up to $2500 per vehicle. (Vehicles must have been purchased on or after June 25, 2020). 

As we pointed out in an earlier Recharge America blog post about EV equity and access, government initiatives that promote EV adoption are an effective means of ensuring that people of all backgrounds and geographic locations can access and take advantage of all the benefits EVs offer.

 

MIT Researchers: Electric Vehicles Save Money

EVs save you money

EVs save you moneyEvidence keeps piling up that supports the economic argument in favor of electric vehicles (EVs) over traditional internal combustion engines. We’ve cited a recent Consumer Reports EV study and our own data analysis showing how EVs save money. And now, according to the New York Times, researchers from MIT have reinforced that EVs cost less in the long run than traditional petroleum-powered vehicles: 

Jessika Trancik, an associate professor of energy studies at M.I.T. who led the research, said she hoped the data would “help people learn about how those upfront costs are spread over the lifetime of the car.”

For electric cars, lower maintenance costs and the lower costs of charging compared with gasoline prices tend to offset the higher upfront price over time. (Battery-electric engines have fewer moving parts that can break compared with gas-powered engines and they don’t require oil changes. Electric vehicles also use regenerative braking, which reduces wear and tear.)

An interactive tool developed by the MIT Trancik Lab allows you to compare emissions and monthly costs of traditional and electric vehicles at carboncounter.com. The contrast is stark, with EVs (in yellow) dominating the category of vehicles combining the “win-win” of cost efficiency and low emissions. 

Dot graph of vehicles and emissions by type

President Biden has said he will propose rebates that will help consumers replace their older, traditional vehicles with cleaner new ones. He also says he wants to expand national EV infrastructure by installing the hundreds of thousands of new charging stations required to make EVs accessible to more Americans, regardless of where they live. 

Click here to read the full New York Times article

Tim Allik is Communications Manager for Recharge America

Electric Vehicles Save Money? Yes – and Consumer Reports Details How Much

Consumer Reports EV Study / Recharge America

Consumer Reports EV Study / Recharge AmericaYou may have read that electric vehicles (EVs) cost more to purchase, but that the cars can actually save you money over time. That assessment often comes from comparing what can be higher purchase costs for an EV to the fuel costs they later save (EVs are much more efficient than gasoline cars). How should you factor that into a purchase decision? More precisely, how can you weigh future savings against purchase costs, particularly if there are any other cost factors between EVs and traditional cars, like vehicle maintenance, or even resale value, that would make sense to better understand at the point of purchase? Combining all of those elements would produce a single number that makes it easier to compare the total cost of an EV to a traditional gas car.

A recent study gives us a “cost advantage” number to do just that.

STUDY CONTEXT

There have been a few high-quality comprehensive looks at costs, but now there is a recent study by a well-known resource: Consumer Reports. Their October 2020 study demonstrates a good grasp of both the automaker and consumer aspects of the market and provides a comprehensive look at EV costs and savings.

Their numbers are subject to all the usual caveats – no one can predict the future, fuel costs may vary in your area, and specific costs related to specific vehicles depend on how far you drive, etc. Moreover, the Consumer Reports study solely examines owner costs; benefits to the grid and society, which are significant, are left for others to calculate. (For example, Recharge America examines some of those numbers at https://recharge-america.org/benefits-summary).

STUDY CONCLUSION

The study examines many different situations that confront potential vehicle owners and presents a wide range of numbers to accommodate them. The bottom line: the average EV has a total lifetime “cost advantage” of $6,000 to $10,000 over a comparable traditional gas car.

That means that for an individual owner weighing their options between two vehicles, owning the EV will come out roughly $8,000 ahead over its lifetime even factoring in the likely higher initial cost for the EV. Consumer Reports has already made the initial price difference part of its overall study calculation by converting those future savings to today’s dollars.  The EV will still save that owner $8,000 when compared to a comparable traditional gas car, despite what will likely be a “lower” initial price tag for the gas car.

If you drive more than the study assumes, you can save even more. And if you drive a larger vehicle (like an SUV or pickup), you can save even more. Perhaps best, if you compare the EV to a traditional gas car that matches its performance (which would mean a more expensive vehicle given how much better EVs perform than traditional alternatives) the study shows that consumers save even more.

Another interesting twist in terms of consumer benefits – the EV cost savings accrue over time, meaning that the longer you keep it, the more of the benefit you will reap. The good news is that this is a boon for used EV buyers, who can save far more money as a percentage of their purchase, yet the average new-car buyer still comes out ahead in most cases. Even in the few cases where they do not, the cost differences are small, yet they are still receiving the many benefits from driving electric – a smoother, quieter, more convenient car with class-leading performance.

SAMPLE STUDY FINDINGS

We offer a link below to the full report for those wanting to explore further. Here we present two of the easier-to-understand study charts that spotlight savings available to consumers. The first (CR Table 4.1) compares the total cost of owning several popular EVs to the best-selling gas car in their class. Note that CR calculated larger savings than these; but because the savings are in the future, they “discounted” the future savings at 3% per year. That means these savings are directly comparable to the money you spend to buy the car today. They are saying that in terms of ownership costs, the EV is this much cheaper than the gas car, even though the highly-visible price tag cost may look higher.

Costs of EVs compared

The second (CR Table 4.4) shows similar savings numbers over the vehicle lifetime and for the first owner. In this case, however, they are comparing to a gas car in the same class that has similar performance to the EV (these vehicles are more expensive because EVs feature better performance). These higher-end gas cars cost more both to purchase and to fuel, so the savings are larger. Note that the substantial vehicle lifetime savings mean that used vehicle purchasers, which account for most people in the US car market, often time save almost as much as the new car purchaser while confronting lower initial vehicle costs.

STUDY DETAILS

The Consumer Reports study includes:

  • Actual purchase costs, not just MSRP
  • Financing costs
  • Incentives – the federal $7,500 tax credit for cars that are eligible
  • Reasonable vehicle lifetime assumptions – 200,000 miles over 15 years
  • Depreciation based on real data. Excluding compliance vehicles, and included a weighted average for state incentives, EV depreciation appears to be identical to gas vehicle depreciation
  • Maintenance costs based on real data. EVs cost almost exactly half as much as gas cars to maintain from CR’s data; and they cite other sources that report even lower EV costs
  • Future gasoline costs based on recent US Energy Information Administration baseline projections
  • Electricity costs covered both at-home charging and trip charging at DC fast-charge stations
  • A reasonable range of gas car comparisons in each class – each EV was compared to the best-selling, best-rated, most efficient, and most-similar performance gas vehicle in its class

Their study does not include sales tax, registration fees, insurance or charging station installation, as these numbers can vary widely based on location and owner characteristics.

STUDY QUOTES

EV Cost savings:

  • “Overall, these results show that the latest generation of mainstream EVs typically cost less to own than similar gas-powered vehicles, a new development in the automotive marketplace with serious potential consumer benefits.”
  • “For all [of the 9 most popular] EVs analyzed, the lifetime ownership costs were many thousands of dollars lower than all comparable ICE vehicles’ costs, with most EVs offering savings of between $6,000 and $10,000.”
  • “Overall, these results show that many EVs on the market today can provide consumers the two features they say they most want improved in their next vehicle—lower fuel and maintenance costs—in addition to the feature the auto industry advertises most often —performance—all at a lower overall cost.”
  • “Savings really ramp up when buyers seek an ICE vehicle that achieves the same acceleration performance as an EV.”

Used EVs:

  • “For ICE vehicles this used-car savings is partially offset by higher expected repair and maintenance costs for older vehicles, and the need to continue to pay for fuel, which makes up a large fraction of the total lifetime ownership costs for ICE vehicles. However, as shown in the previous chapters, EVs significantly reduce these costs, while their biggest drawback—higher purchase prices—is partially offset by depreciation.”
  • “While new EVs were found to offer significant cost savings over comparable ICE vehicles, the cost savings of 5- to 7-year-old used EVs was found to be two or three times larger on a percentage savings basis.”

DC Fast charging:

  • “Owners of EVs with a range of 250 miles or greater will be able to do 92% of their charging at home, needing only six stops at a public fast-charger per year.”

STUDY LINKS

Article: https://www.consumerreports.org/hybrids-evs/evs-offer-big-savings-over-traditional-gas-powered-cars/

Fact sheet: https://advocacy.consumerreports.org/wp-content/uploads/2020/10/EV-TCO-Overall-Fact-Sheet-FINAL-3.pdf

Study: https://advocacy.consumerreports.org/wp-content/uploads/2020/10/EV-Ownership-Cost-Final-Report-1.pdf

Chad Schwitters is an EV Technical Consultant 

Why Electric Vehicles Represent An Economic Powerhouse for Our Communities

Recharge America: National nonprofit spotlighting the strategies, stories, and initiatives leading the charge with electric vehicles.

Recharge America: National nonprofit spotlighting the strategies, stories, and initiatives leading the charge with electric vehicles.Over the past few years, Massachusetts has embarked on an ambitious program of statewide economic renewal and development, yet too few residents are aware of it. The initiative? Electric vehicles (EVs).

Massachusetts is offering tens of millions of dollars in rebates and incentives to consumers, businesses and nonprofits, both to get more EVs on the road and to build the charging infrastructure necessary to power them. The state’s goal is to have 300,000 EVs registered by 2025. By 2035, all new vehicles sold in the state will be required to be EVs. By contrast, fewer than 30,000 EVs were registered in Massachusetts in 2018.

The transition to electric vehicles marks an investment that will boast excellent returns for Massachusetts residents for decades to come.  

EVs and the Economy 

The economic potential to be unlocked with the transition to EVs is enormous. Electric vehicles are a powerhouse for local economies. 

Unlike petroleum-based fuels, electricity is produced within the Northeast and serviced locally, helping keep local transportation energy dollars local in Massachusetts. Investments in charging stations and other EV infrastructure projects employ Massachusetts workers and lower transportation costs because running on electricity is more efficient. A 2016 analysis estimated that reducing emissions and particulate matter created by combustion engines will save over $400 in healthcare costs per EV per year. A 2019 study by the Union of Concerned Scientists found that pollution produced by vehicles disproportionately impacts the air quality in minority communities in Massachusetts. This inequity would be eliminated with widespread EV adoption.

According to the October 2020 edition of Consumer Reports, EVs save their owners hundreds of dollars annually in fuel and maintenance costs. For the nine most popular EVs they analyzed, “lifetime ownership costs were many thousands of dollars lower than all comparable ICE vehicles’ costs, with most EVs offering savings of between $6,000 and $10,000.” (We will delve into the details of this analysis in a future post). 

As the technology evolves and production volume increases, many more EV choices for a wide range of households, and household incomes, are increasingly available. Lower-cost options from Nissan, Chevrolet, Ford, Kia, and more are on the market today, with more choices regularly introduced. Used EVs are also on the market at deep discounts, and if you buy a new electric vehicle in Massachusetts, you can reduce your cost by up to $10,000 in state and federal credits and rebates. Moreover, manufacturers including GM, Ford and Toyota have made public announcements that they will be offering EV options across their entire line-up, if not moving entirely away from manufacturing traditional gas-powered vehicles, meaning that many more options are soon to be in the market that can serve virtually every kind of household.

Add it all up and even conservative estimates show that each new electric vehicle in Massachusetts generates over $1,000 per year in economic savings and activity for the community where it is located. Those benefits repeat year over year. When 300,000 EVs are registered in Massachusetts they will generate over $3 billion per year in benefit, or over $30 billion over a decade. That’s more than the annual budgets for the state’s Office of Housing and Economic Development and the Executive Office of Health and Human Services combined

Businesses Leading the Way in  EV Adoption

Massachusetts employers interested in speeding the transition by installing EV charging stations for their workers can receive financial support from the state. The Massachusetts Electric Vehicle Incentive Program (MassEVIP) helps employers acquire electric vehicle charging stations through grants funded by the state’s Department of Environmental Protection. The program provides incentives for employers to acquire and install EV charging stations. Applicants with 15 or more employees in non-residential places of business are eligible. MassDEP provides 60 percent of the funding (up to $50,000 per street address) for hardware costs. 

For commercial business fleets, charging an electric vehicle is much more affordable than filling up the gas tank of a traditional vehicle, costing the equivalent of paying $1.30 a gallon for gas. Electric tractors and trailers can save 15-20% fuel costs over traditional equipment. Add in lower maintenance costs and the savings are significant.  

Providing employees with access to EV charging stations makes sense in another important way as well. They provide a reminder that an organization cares about its employees and the environment given that, in addition to their many economic benefits, EVs are a critical component of the Commonwealth’s strategy to reduce pollution and achieve net-zero global warming emissions by 2050.

EVs: a win for the economy, consumers, the environment, and Massachusetts.

Kirk Brown is President and CEO of Recharge America

Electric Vehicles and Equal Access: Making Sure No One Gets Left Behind

Massachusetts is doubling down on decarbonization. The Commonwealth unveiled its 2050 Decarbonization Roadmap on December 31, 2020 and electric vehicles (EVs) are a key component of the plan. Massachusetts aims to have one million EVs on the road by 2030, and will end sales of new conventional gas vehicles entirely by 2035. Two other states, California and New Jersey, have set a 2035 deadline as well. 

Why should Massachusetts declare an end to new sales of traditional vehicles when market forces are already moving the industry in that general direction? Because it can help organize and marshal resources to guarantee equal access to EVs and charging infrastructure across communities in every part of the Commonwealth. 

Electric Vehicles and Exponential Technology Progress

Advancements in EV technology are proceeding at such a rapid pace that traditional gas vehicles will likely be antiquated in the new vehicle marketplace by 2035, regardless of state policy proclamations. Better driving performance and lower maintenance and fuel costs mean that many drivers already recognize EVs as a superior choice to conventional vehicles. As falling battery prices and higher production volumes continue to drive their costs down, EVs will be the obvious choice for most people in the vehicle market much earlier – possibly within the next few years.

While incremental improvements to combustion engines have been made over time, their  fundamental principles have remained largely unchanged for decades. In contrast, vehicle electrification has unlocked the kind of astounding technological progress we are more used to seeing with the information economy. According to BloombergNEF’s annual battery price survey, lithium-ion battery pack prices, which were above $1,100 per kilowatt-hour in 2010, have fallen 89 percent in real terms to $137/kWh in 2020. Average prices will be close to $100/kWh by 2023. Tesla regularly updates the software for its vehicles, adding new features and functionality to cars already on the road. In short, EVs are steadily getting better and less costly, and are well on the way to winning the technology and market contest with traditional vehicles. Soon, the customer preference will not be close.  

Government Action Can Set the Stage

State government initiatives setting an end date for conventional vehicle sales serve an important purpose. Though electricity is available everywhere, charging EVs on the road requires different infrastructure than gas-powered vehicles. Making certain that EV charging infrastructure makes inroads in all of our communities, and not just some of them, is a shared objective that statewide goals for vehicle sales can help reinforce. Nobody should miss out on all of the advantages EVs offer. 

State governments learned an important lesson from the rollout of the Internet and the ensuing Digital Divide that separated the haves and have nots of high speed Internet access, limiting accessibility to underserved communities, primarily rural and minority ones. While the FCC claims that significant progress has been made to rectify this problem, the pandemic has revealed that many students in rural and underserved communities remain unable to engage in online learning due to slow connections. Transportation electrification gives states an opportunity to do things differently from the start to ensure a different outcome related to EVs. 

EV Benefits to Underserved Communities: Lower Health, Transportation Costs 

Heath considerations alone should make ensuring equal access to EVs a crucial statewide objective.  A 2019 study by the Union of Concerned Scientists found that pollution produced by vehicles disproportionately impacts the air quality in minority communities in Massachusetts, leading to chronic health issues such as asthma and heart disease. Asian Americans, African Americans and Latinos all face higher rates of exposure to hazardous vehicle emissions than white residents – as much as 36 percent worse. Given the clear benefits of clean air, when lower healthcare costs are factored along with the lower maintenance and fuel costs that come from driving electric, these communities potentially stand to gain the most from widespread EV adoption.

In Massachusetts, conservative estimates find that EV drivers can expect annual maintenance savings of $353 per vehicle, fuel savings of $144, air pollution-related health costs of $434, and climate-related savings of $271, totalling $1202 in annual economic benefit. In relative terms, lower income residents should benefit the most from these savings. The Bureau of Labor Statistics’s Consumer Expenditure Survey has shown that transportation is the second highest American household expenditure, only exceeded by housing costs, and that households in poverty spend a higher proportion of their income on transportation expenses. 

Rural Access to EV Charging Infrastructure

For their part, rural community members tend to drive much longer distances to perform everyday tasks than their urban counterparts. Ensuring ready access to charging stations near homes and businesses in less populated parts of the state will be crucial to support the transition to clean transportation across these areas. Moreover, rural communities with a healthy allocation of EV charging options quite literally put themselves on the map as driving destinations for EV driving visitors and tourists.  

EVs today are already significantly more affordable to fuel and maintain than traditional vehicles. Federal and state tax credits and rebates are helping to lower the sticker price of buying a new EV to make them more accessible today. State initiatives to eventually make EVs the vehicle of choice statewide are another practical way to make sure that residents from all walks of life can benefit from the many concrete advantages they offer. 

Kirk Brown is President and CEO of Recharge America