California has long been seen a leader on EVs of all kinds – plug-in hybrids, battery electric and fuel cell vehicles. The state established the first requirements for zero emission vehicles in 1990 and has been pushing the industry forward ever since. Governor Brown’s executive order last week gives another jolt to EV deployment in the state with a call for $2.5 billion in investments in infrastructure and consumer incentives over the next 8 years with the aim of reaching 5 million zero emissions vehicles by 2030 and the build out of 250,000 charging stations and 200 hydrogen refueling stations by 2025. The legislature will weigh in over the coming months about spending decisions including committing $200 million/year from Cap and Trade revenue for vehicle incentives. Reaching mass market adoption of EVs means making them affordable and convenient for less affluent drivers and addressing the needs of those without dedicated off-street parking. The Governor’s proposed investment plan faces this challenge head on.
Here are 4 reasons why Governor Brown’s Executive Order is important.
(1) California – and the rest of the world – can’t tackle climate change without a revolution in the transportation sector
California Climate Emissions. Source: 2015 data reported in California’s 2017 Climate Change Scoping Plan, November 2017.
Transportation accounts for nearly 40% of California’s climate emissions. And that’s not including the emissions from producing gasoline and diesel from crude oil. Including those sources pushes transportation to about half of all global warming emissions in the state.
Nationally, while transportation is a lower share of overall emissions than in CA, the trend in emissions is not encouraging. Transportation recently overtook the electricity sector as the largest source of CO2 emissions in the country.
Source: EIA Monthly Energy Report (12 month total)
(2) Electric vehicles are cleaner than gasoline vehicles today, and they will only get cleaner
Making our gasoline cars cleaner is absolutely critical to getting us on track toward our climate goals – which is why UCS is doing everything we can to protect the important federal global warming emission and fuel economy standards currently on the books (If these are important to you too – tell your automaker to support strong standards). But as we look ahead, electric vehicles will become more and more important to achieve deep emission reductions and transition away from oil.
This map shows how EVs compare to gasoline vehicles today on global warming emissions. For example, in California, a gasoline vehicle would have to achieve a fuel economy rating of 95 mpg to have the same emissions as an electric vehicle charged on California’s electricity grid. As the grid gets cleaner with more solar and wind power and less coal and natural gas – so will EVs.
Fuel economy rating a gasoline vehicle would need to achieve to have similar emissions to an EV, based on electricity grid emissions data from 2014. For more about this map, see my colleague David Reichmuth’s blog post.
(3) California needs millions of EVs on the road to meet our 2030 climate targets
California committed to cutting its global warming emissions to 40% below 1990 levels by 2030 with the passage of Senate Bill 32. As noted above, with transportation emissions nearly 50% of the state’s total that means major progress is needed in reducing emissions from our cars and trucks. Modeling from state regulators shows that even with continued steady progress in reducing emissions from new gasoline vehicles, at least 4.2 million zero emission vehicles (plug-in hybrid, battery electric and fuel cell vehicles) would need to be deployed in CA to meet climate and air quality goals.
Source: ARB Mobile Source Strategy Cleaner Technologies and Fuels Scenario (p. 66). Note: This is an illustrative scenario of the magnitude of adoption needed for plug-in hybrid, battery electric, and fuel cell vehicles.
This is just one scenario based on assumptions across all different sectors of the economy. Achieving Governor Brown’s new goal of 5 million zero emission vehicles by 2030 would help ensure California is achieving the state’s economy wide goals, while acting as a catalyst for accelerating EV adoption outside of the state as California leads by example.
(4) These investments target the most important barriers to owning an EV: upfront costs and access to charging
EV sales in California account for roughly half of all sales in the US. This is due to a combination of factors including the regulatory and financial incentives in place today. But keeping up that momentum over the next decade to reach the 5 million vehicle mark means average new EV sales need to average about a 19 percent year over year growth (see figure). For comparison, year over year sales growth between 2016 and 2017 was about 24%.
To make this happen, EVs need to become more affordable to more people and owners need a place to plug-in.
On the first measure, affordability, the good news is that EVs are cheaper to fuel, saving an average of $800 on fuel costs compared to a gasoline vehicle and prices of EVs are continuing to fall. EVs are likely to reach price parity with gasoline vehicles sometime in the next decade. But EVs still cost more than comparable gasoline vehicles today, so consumer incentives are critically important for accelerating their adoption.
Cap and trade funds have provided the bulk of the incentive funds to date for consumer rebates in CA, but the program has been subject to waitlists and uncertainty in the annual budget appropriations process. A commitment by the Legislature and Governor of at least $200 million per year for rebates would go along way towards creating greater stability for the program and ensure support during a critical time of the market.
Charging infrastructure is also a must. Single family home owners often have a place to park and plug in, but those in condos and apartments often face a more difficult challenge. Brown’s proposed investments in infrastructure through the California Energy Commission would provide steady investment over the next 8 years and supplement the proposed utility investments and VW settlement funds being directed towards building a charging network that can support 5 million vehicles.
Importantly, the executive order also calls for actions to increase investment in low-income and disadvantaged communities. These communities often suffer the most from air pollution and deploying EVs in these communities is an important priority for reducing emissions where it is needed most and where it will have the biggest impact. Higher vehicle rebate amounts that exist for lower income households helps ensure more people can take advantage of the direct benefits of owning an EV while current income limits on rebate eligibility help stretch the dollars where they are need most. Additional cap and trade funded programs to increase EV ownership in disadvantaged communities such as vehicle replacement programs and electric car sharing projects provide addition opportunities for deploying EVs more widely across all communities in the state.