What will it take for Americans to switch to electric vehicles?


One and a half million electric cars on the roads of the American West and the Midwest by 2030: that’s the vision of regional power company Xcel Energy, and part of its goal of being emission-free by 2050. These electric vehicles are certainly receiving a lot of attention on both sides of the Atlantic. In Europe, some companies are even offering them for free to encourage people to switch to electricity. However, Xcel Energy doesn’t go that far. It will just encourage people to switch to an EV.

An electrifying vision “Through new programs for electric vehicle customers and charging infrastructure, we will extend our leadership in clean energy to transportation, developing innovative partnerships with our communities, customers and others,” the company says. in a brochure. “The vision means that 20% of all vehicles in the areas we serve would be replaced by electric vehicles by 2030.”

The approach is smart: promote EVs by facilitating the installation of domestic chargers and the construction of a network of public chargers. The utility also said it will offer financial incentives to EV drivers in the form of discounts. However, this will mainly be promotional work by educating people about the benefits of electric vehicles, such as lower maintenance costs and also lower “fuel” costs. Will this be enough?

It really is is About the price tag

Despite all the hype surrounding electric cars, and for all of their real advantages and benefits over internal combustion engines, including lower costs and zero emissions, electric vehicles are still far too expensive for the market. most drivers.

Some of Excel Energy’s efforts in promoting EVs will specifically target low-income drivers and underserved communities through work with organizations that could help make EVs more widely available to these communities. But unless they donate money to these drivers and communities to buy electric vehicles, these promotional efforts will hardly go far enough to make the company’s vision a reality.

The truth is that even in Europe, where the incentives to buy electric vehicles are even more generous than in the United States, electric cars make up a small portion of all cars. And yes, this is still true despite a recent increase of EV sales on the continent: In annual terms, sales of electric and hybrid vehicles in June were up 95% compared to June 2019. In absolute terms, these EVs and hybrids only represented 8.2% of total sales . And electric vehicles alone accounted for 4.4% of that 8.2%. Not quite the boom that many still expect.

The grid that powers the cars

Given the economic fallout from the pandemic in the United States, promoting expensive electric vehicles will likely become even more difficult. But it’s not just the price of vehicles that’s a problem. There is also the grid that would supply these vehicles with electricity.

Related: Saudi Petroleum Minister: Oil Demand May Recover 97% By End of 2020 This week, California grabbed the headlines with its now-usual eating problems. Millions of people have been threatened with power cuts due to above-normal consumption amid a devastating heat wave. The breakdowns were avoid, this time because the advocacy for energy conservation has worked. But the concern remains that California is vulnerable to peaks in consumption.

California is the largest market for electric vehicles in the United States. That’s not to say EVs were responsible for the increase in energy use – air conditioners were – but the question remains: How reliable is the grid when you want to add a million EVs to it?

Xcel Energy is preparing for this charge: the company recently announced a $ 1.4 billion investment in upgrading its old wind farms, still as part of its 2050 zero-emission plan. The upgrade will further reduce the cost of electricity they produce and will prolong their life, according to the CEO of the company. And that should benefit all of those future EV drivers in the eight states served by the utility. If they ever come.

Slow growth

Plug-in vehicles (i.e. electric vehicles and plug-in hybrids) shown 5 percent of all US car sales in the first half of the year. Most of them, perhaps unsurprisingly, were Teslas, the rest a variety of brands. According to CleanTechnica’s Zachary Shannan, those who track electric vehicle sales note that there is no comprehensive report on them because “too many automakers do not publish data on electric vehicle sales to create a such report ”. Unfortunately, the reason some sales data is not released is usually that those sales are not large enough to make a difference in total sales.

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The outlook for EV around the world remains optimistic. Wood Mackenzie recently released a report That said, global electric vehicle sales could reach 45 million by 2040, with total roads that year rising to 323 million. But the drivers of this sales growth will not include the United States. The pilots, at least so far, will be Europe and China. And, analysts say, it’s businesses rather than consumers that will drive this wider adoption of EVs.

“Unlike retail customers, fleet owners are familiar with the capital and operating expenses of their vehicles. They also have well-defined operating routes, as well as overnight parking spots, ”Wood Mac senior analyst Ram Chandrasekaran noted in the report. In other words, fleet owners are much more aware of the benefits they could derive from the switch to electricity than consumers.

So, does this mean that Xcel Energy is targeting the wrong group? In a way, maybe. Its brochure certainly leaves the impression that it focuses, if not exclusively, on retail customers as the drivers of the EV transformation – retail customers who will obediently charge their new EVs only during off-peak hours. Some probably will. Others too, accustomed to the convenience of stopping at a gas station for a quick charge when you need it, will avoid the perks and advantages that electric vehicles can offer them over their consumers. gasoline, both in terms of costs and environmental impact.

By Irina Slav for OilUSD

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