This blog was written by Anne Blair, former Director of the Clean Fuels Program at the Southern Alliance for Clean Energy.Guest Blog | April 17, 2018
This is Part 2 of our blog series, Electric Vehicles: Driving Reduced Demand for Offshore Oil, which shows that given the advancements in vehicle electrification, expanding offshore drilling for oil and natural gas into protected areas (covered in Part 1) is intrinsically risky and unnecessary. Part 3 of the series, coming tomorrow, will provide analysis demonstrating that the rise of electric vehicles (EVs) in the U.S. is projected to offset oil demand more than could be produced by opening all of our nation’s protected offshore areas. This series commemorates both Earth Day and the 8th anniversary of the Deepwater Horizon tragedy. Take the #NextCarPledge and support electric vehicles today! To learn more, please see the recording of the webinar that summed this series up here.
Americans drive approximately 3.2 trillion miles annually, predominately using internal combustion engines that require gasoline or diesel fuel to operate. But technological advancements in light and heavy duty vehicle electrification over the past decade require a reassessment of future oil demands and a reevaluation of the assumed benefits of offshore drilling.
The electric vehicle (EV) market is quickly growing. Between 2010 and 2017, U.S. consumers purchased nearly 800,000 EVs, with sales expected to accelerate as new vehicle makes and models become more widely available. More and more drivers nationwide are making the switch to drive electric because EVs are cleaner, more convenient and save consumers money. Despite this sales growth, however, EVs currently represent less than 2% of the market in the U.S. There is significant market growth potential.
State and federal policies are helping to drive adoption. For example, several states in the U.S. have set a goal to reach 3.3 million EVs by 2025. Internationally, many countries are making strong EV commitments – India, France, Britain, Netherlands, Sweden and Norway have EV goals or want to completely eliminate gas and diesel cars in favor of cleaner vehicles. At least 10 other countries have also set sales targets for electric cars. China is currently leading the way – they are responsible for more than 40% of all EVs sold in the world.
Lower battery prices
Battery technology and costs are one key factor that will drive adoption rates. Fortunately, battery costs are significantly declining. In fact, EV battery prices are falling much faster than expected and could be lower than the $100 per kilowatt-hour mark by 2020, which would make EVs cost competitive with gasoline vehicles around 2025. With these advancements alone, the future of the transportation sector is widely seen to be electric. For example, the U.S. Energy Information Administration (EIA) Annual Energy Outlook estimates that nearly 15 million plug-in vehicles will be on the road by 2030.
Manufacturing investments, benefits for the Southeast
Manufacturers are making huge commitments to electrification. Nearly every major auto manufacturer has announced plans for the manufacture and sales release of an EV model or models by 2020. BMW, for example, has stated that they are working on 12 all-electric cars and 13 hybrids, which will be on the market by 2025. Daimler is investing $11 billion in its upcoming electric range of vehicles. Ford plans to launch 13 electrified vehicles over the next five years, including the release of an F-150 hybrid by 2020. General Motors plans to launch at least 20 new EVs by 2023. VW (Volkswagen) Group also plans to spend up to $84 billion in order to bring 300 electric vehicle models to market by 2030. Volvo will manufacture exclusively electric and hybrid vehicles starting next year.
Electrification is also not just for light-duty vehicles. Commercial and public sector vehicle fleets are also accelerating adoption of electric vehicles and equipment. Electric bus manufacturers Proterra, BYD, New Flyer, and others are ramping up production to meet the need of municipalities and transit agencies that want to break their addiction to fossil fuels. This will have significant impacts on fuel savings for fleets.
Electric vehicle manufacturing in the Southeast is also expanding. Proterra bus company is manufacturing electric buses in Greenville, South Carolina. Automotive supplier Denso announced plans to invest $1 billion and create more than 1,000 jobs at their Maryville, Tennessee, plant to meet growing demand for electric vehicle parts and systems. Mercedes is investing $1 billion to develop EVs in Alabama. Green4U Technologies, in Braselton, Georgia, is developing a full line-up of electric vehicles from neighborhood vehicles to SUVs and trucks. Volvo is investing $1 billion and hiring 4,000 workers for its new South Carolina plant where it will make electric and hybrid vehicles, and BMW has put billions into its Spartanburg plant which manufactures the X5 plug-in electric hybrid and will begin producing the all-electric X3 in 2020. Transit bus and motorcoach manufacturer, New Flyer, is investing $25 million in building renovations and expansions at its Anniston, Alabama production campus for a zero emissions bus innovation center.
EVs offer a superior driving experience – they are smooth, quiet, and have fast acceleration. With few moving parts, EVs have very low maintenance needs and cost less to fuel and operate than traditional internal combustion engines. In fact, the costs for an electric vehicle are one-third of those for conventional, internal combustion engines. For example, the average fuel efficiency of an internal combustion engine is 24.8 miles per gallon, but many EVs exceed 100 miles per gallon of gasoline equivalent. Annually, EV drivers save more than $800 on fuel costs, compared to driving gasoline vehicles.
Further, from an efficiency standpoint, EVs outrank all other fuel sources, including compressed natural gas (CNG), diesel hybrids, or hydrogen fuel cells. Fueling and driving EVs are also more convenient – you can fuel up at home. They also increase our energy security by reducing our dependence on oil imports. In the Southeast, our states spend billions of dollars annually to import oil. By using electricity instead, particularly renewable energy generated locally, the amount of money sent out of state is significantly reduced, keeping more money circulating locally and supporting more local jobs. Electricity prices are also much more stable than gasoline prices, thus reducing our vulnerability to gasoline spikes.
EVs are also simply better for the environment and public health by reducing transportation emissions. From a lifecycle emissions perspective, analysis shows that driving an EV in the Southeast is equivalent to driving a vehicle that gets 56 miles per gallon, making driving an EV cleaner than driving today’s gasoline or diesel engines. The emissions of EVs will continue to improve as the electricity grid gets cleaner as well.
Lastly, EVs offer electricity grid benefits. They offer load (increased electricity sales) growth for utilities. Additional load from EVs, particularly at night, during off-peak times, when the cost to produce electricity is lower, can make more efficient use of utility assets and put downward pressure on rates.