Kirk Brown

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

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