The Electric Vehicle Revolution is Approaching, But the Grid is Unprepared
When electric vehicles, or EVs, first popped into the public consciousness, they were an exciting oddity. A Tesla may have been spotted here or there along a road trip, and the idea of seeing an EV charger in a parking lot felt like a novelty, but with their high price tags, they seemed unattainable and more of a plaything of the wealthy than a vehicle the typical American could consider. In decade and a half since the first road-ready EVs rolled off of the production line, though, that landscape has evolved drastically: nearly every major automaker has an EV model currently for sale or soon to be available, buying one doesn’t cost the same as a down payment on a house, and EV chargers on the highway or parking garages have become common.
While this progress towards the electrified transportation future is no doubt a positive one when it comes to reducing carbon emissions and moving away from oil dependency, the rapid progress in the EV industry has brought about new challenges. Notably, taking cars out of gas stations and instead plugging them into the grid means the unification of the electric power industry and the transportation sector like never before, and this shift is on a scale with which utilities have never had to contend. While this transition has become a focus of all stakeholders and leaders driving the change, the power grid as it exists today is unprepared for where the EV market is going to shortly be.
But it’s not too late to play catchup, and stakeholders on the grid have the benefit of advancing technology ready to help with the revolution.
Current and Future Trend of EVs in the U.S.
When it comes to the rate at which the transportation sector is transitioning to electricity, the United States is somewhat behind the curve, though it’s looking to play catch up quickly. As of the end of 2021, EVs accounted for less than 3% of all vehicles on U.S. roads and were accounting for about 4.5% of total new car sales. Globally, though, EVs represent 8.6% of vehicle sales (and up to 16% in Europe and 14% in China).
That said, the U.S. markets do appear to be reaching a pivot point and are ready to ramp up, with forecasts of 32% of U.S. car sales being electric by 2030 and 45% by 2035. This trend is only going to accelerate as more automakers put out EV models to reduce price points, to overcome consumer concerns about vehicle range and charge times, and even to bring EVs to new potential audiences (such as the appeal of the Ford F150 Lightning to the traditional pickup truck consumer).
In anticipation of these future trends, automakers are committing to providing the necessary supply chain. For example, Nissan is building two new EV models at a plant in Mississippi, traditional automakers adding new EV models while new EV-only companies rise, Volkswagen commits millions of dollars to support EV infrastructure and transform its dealers to prepare for EVs, and so much more.
So, while the U.S. lags behind Europe and Asia in EV progress, perhaps that delay could be beneficial in the end, as the American power grid is not currently poised to meet the demand of the exploding EV needs. But grid investors and stakeholders can’t waste the time they have left.