Electric vehicles (EVs) are rolling out of dealerships and into family homes across the country, bringing with them less local air pollution, carbon pollution, and noise. While EV sales in 2017 were just 1.2% of total vehicle sales, consumer demand for these quiet, fuel-efficient cars is growing as car prices fall and consumer awareness grows.
Modeling suggests EVs will hit 65% of sales by 2050.
Given EVs’ minimal environmental footprint and benefits from reduced reliance on foreign oil, governments have a strong interest in supporting the developing market and promoting innovation. State governments are already playing a major role, but our research shows that it’s not enough. There’s more they can do to accelerate deployment even further.
Educate consumers and retailers
There isn’t a standard definition for “electric vehicles.” It’s an ambiguous term used in different ways depending on the situation. Most of the time (and here), “electric vehicles” means plug-in electric vehicles (PEVs), which can be charged via an external electric power source. PEVs can be just battery-powered (battery EVs) or can have a gas backup (plug-in hybrid EVs). These differ from hybrids like the popular Toyota (TM) Prius, which supplements an internal combustion engine (ICE) with batteries charged through regenerative braking.
Surveys have repeatedly found that consumers do not understand these nuances—which confuse even policy wonks like me—let alone the suite of tax breaks and rebates available. A study found that dealers are similarly uninformed. Inconsistent practices and limited information led dealers in the top 10 EV markets to push buyers toward non-EV models they were more comfortable selling. State programs aimed at educating consumers and dealers could start to close the knowledge gap.
Join the zero-emission vehicle mandate
As allowed in the Clean Air Act, California requires manufacturers to sell a certain number of zero-emission vehicles (ZEVs, a label that includes PEVs along with fuel cell electric vehicles, which run off of a battery powered by hydrogen), and other states can join the mandate. So far, nine states have signed on. According to a recent report from the Center for American Progress (CAP), joining the ZEV mandate is the most effective thing states can do to increase the share of EVs in their state. In Colorado, Gov. Hickenlooper recently adopted a program modeled off California’s.
Provide vehicle and charging infrastructure incentives
Financial incentives for charging infrastructure—such as tax credits or rebates—are some of the most effective ways to influence the market penetration of EVs in a given state, and incentives for purchasing vehicles are also effective. In some states, the layering of incentives at the federal, state, and utility levels could make a new EV extremely cost-competitive with traditional vehicles. A Maryland resident, for example, could apply and receive up to $13,500 off a new Nissan Leaf and $20,500 off a new BMW i3. Norway—the country leading on EV deployment—has used policy to make EVs cost-competitive with ICE vehicles.
Fully utilize Volkswagen Mitigation Trust funds
Volkswagen (VW) recently settled with the federal government over allegations that the company cheated emissions standards. From the settlement, all U.S. states will receive a collective $2.7 billion to fund projects that reduce air pollution. Up to 15% of that can go toward electric vehicle chargers. Eighteen states have finalized their spending plans, and just seven so far will dedicate the full 15% to charging infrastructure. Other state plans are still in development, and many offer the opportunity for the public to provide input on what they would like to see included. Combined with planned allocations in final and draft plans, $322 million could be devoted to charging infrastructure if all states in the pre-draft phase of their mitigation plans commit all funds available.
Support electric utilities’ efforts to expand EV access
Electric utilities across the country are recognizing that a transition to EVs benefits consumers and provides a new source of revenue for their industry. The industry’s state-run regulators, Public Utility Commissions, can leverage industry’s interest in supporting EV development. For example, California recently approved a $750 million spending plan from the state’s three largest utilities to build charging infrastructure and provide rebates to customers who want to purchase EVs. State regulators made sure the plan complements private spending and invests in disadvantaged communities.
With the right support from states, EVs will start to deliver significant benefits and usher in the clean transportation system of the future.
Lia Cattaneo is a research associate for Energy and Environment Policy at the Center for American Progress.
