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Introduction
Since the introduction of Henry Ford’s Model T in 1908, automobiles have become a staple of contemporary American society. The novel presence of an affordable, distributed mode of transportation and the infrastructure that sprang up around it, for the first time in human society, was able to sever the ties between a person’s location and the scope of opportunities accessible to them. This effective compression of space and time led to a paradigm shift in urban social structures, ultimately shaping the Concentric Zone model that we see present today. Instead of being located closer to their source of income, wealthier families began to settle further from their professions, using this new mode of transport to make up for the distance, forming modern suburbia while poorer families were forced inwards, forming modern high-density urban environments. Needless to say, automobiles have had extensive and far-reaching implications on American society, yet until recently, their core technologies have remained the same since the invention of the Internal Combustion Engine. In the 21st century, however, growing concern over the environmental impact of Greenhouse Gas (GHG) emissions and the limited availability of nonrenewable resources has led to the push for Alternative Fuel Vehicles (AFVs), the most successful type of which are Electric Vehicles (EVs). As of 2019, there were 1.2 million registered EVs on the road in America, an exponential increase from the 279,000 in 2018 (Rudman 2018).
The environmental impact of EVs are favorable and cost benefits are only predicted to rise in the coming years, but access and adoption must be facilitated by charging infrastructure and can be stimulated by governmental incentivization.
Environmental Impact
The environmental impact of vehicles is measured by CO2e/km (CO2 emissions per kilometer). Traditional gas vehicles are estimated to have 250–300 CO2e/km (taken from multiple sources). The CO2e/km of electric vehicles varies wildly depending on the electricity source composition of the country.
For example, in India which uses mostly carbon heavy coal power, it is 370 CO2e/km whereas in Brazil which is 86 percent renewable it is 89 CO2e/km. In America it is estimated to be 202 CO2e/km for electric vehicles which is less than that of gas vehicles despite American energy production being two-thirds nonrenewable (Wilson 2013). With renewable energy production in America accelerating over the past few decades, this is a good sign moving into the future for EV efficiency (EIA 2020). In America, the emission efficiency of an EV is equivalent to that of a 40-mpg gasoline vehicle. This means any EV driven in America at present already exhibits a demonstrable reduction in GHG emissions when compared to the fuel economy of a traditional American passenger vehicle (22 mpg highway) and this gap will only continue to widen. This also benefits the user in the form of fuel savings. The National Renewable Energy Laboratory (NREL) estimates that by 2035, even in their less aggressive models, EV usage will result in a net saving of $5–10 billion per year for U.S. citizens (Melaina 2016).
Charging
One of the most common hindrances against EV adoption is the time required to charge them. Even with the fastest DCFC (direct-current fast charger) charging technology and the most efficient vehicles, EV chargers take at least 6 minutes to add 100 miles of range while most traditional gasoline pumps can add up to 300 miles of range per minute (based on a 30 mpg car) (Lee & Clark 2018). The obvious counterpoint to this argument is that unlike ICE vehicles, EVs are able to be charged at home when not in use, resulting in lower downtime. However, when considering longer travel distances, this problem still persists. In terms of cost of fueling EVs, because of high preexisting electricity demands from elsewhere in the U.S energy infrastructure, charging of EVs during peak hours is not sustainable and will raise overall charging costs in the future. Because of this, a huge emphasis must be placed moving forward on tariffs for charging during off-peak electricity usage hours. The cost of investment in EV charging stations depends on the utilization rate of the system. Currently, utilization rates of electricity stations are below 10 percent. Given, the rising numbers of registered vehicles, if utilization rates can grow to 30 percent, charging stations will break even in terms of cost compared to gasoline vehicles (Lee & Clark 2018). Furthermore, currently developing Vehicle-to-Grid (V2G) technologies present an interesting prospect for current and future EV users. This technology would allow parked EVs to store and discharge energy to the local energy grid to meet local demand, essentially acting as a backup battery. This would reduce the need of companies to build physical power plants to store energy and increase their ability to meet peak demand rates. In addition, this profit could be returned back to the EV owner, with a report in 2015 estimating a yearly return of $300-$500 based on the amount of time spent parking (Zhou 2017).
Adoption
Despite the many impediments to their widespread usage, EV sales and market share in America has continued to rise steadily in the last decade. EV market share has risen to 2.1 percent as of 2019, a considerable increase from 1.5 percent the previous year. With current market trends and government incentivization, by the year 2020 EV sales are expected to account for 20 percent of all vehicle sales (Rudman 2018). At present, one of the largest obstacles to EV adoption is their cost, specifically the cost of developing their lithium-ion batteries. Thanks to extensive research and development over the past decade, manufacturing costs of lithium-ion batteries have decreased from around $1000 per kWh to $200 per kWh, and this number is expected to further decrease moving into the next decade with predicted costs in 2024 being just $94 per kWh (Goldie-Scot 2019). This translates to an end-user cost reduction of $5100 to $5700 by 2025, a number that might increase even faster given higher competition among battery manufacturers (Baik 2019). In addition to battery costs, other costs of EV adoption for individual owners include the price of home chargers and their installation. Depending on speed and quality, EVSE (Electric Vehicle Supply Equipment) standard chargers can cost $200-$1200 dollars and installation, depending U.S. region and permit cost, can cost $800-$1300. However, the cost of chargers is partially offset by EVSE benefits that exist in some shape or form in 45 of the 50 states.
Methodology
Materials
I sourced my data from the datasets provided by the U.S. Department of Energy’s Alternative Fuels Data Center. The specific datasets that were used were the EV Registration by state set, the Alternative fuel stations set, and the Laws and Incentives set.
Procedure
The purpose of my project is to determine what factors, if any, are most statistically significant when it comes to EV adoption in the United States. I created a spreadsheet and recorded the electric vehicle registration counts by state using the data provided by the Alternative Fuels data center. I then used the Alternative Fuels and Laws and Incentives to record the number of EV charging stations and state/district legislation pertaining to EVs for each state. The data sets contained information for all alternative fuels, so I had to filter the results to only those relating to EV’s. I then used keyword filtering in the title column of the Laws and Incentives column to isolate and record which states had EV legislation that fit into the following categories: tax exemptions, HOV lane Exemptions, HOT lane exemptions, EV Supply Equipment benefits, emissions test exemptions, and loan exemptions. I used scatterplots to plot the relation between the registration count, number of charging stations and number of incentives for all states, making sure to denote which states fell into the aforementioned categories. For the purposes of the graphs, the state of California was excluded for being an outlier, having abnormally large numbers of registered EVs, charging stations, and incentives that skewed the distribution and artificially increased the coefficient of correlation. From an innovation standpoint, California is years ahead of competing states, so in many cases, analyses exclusively consider the other states in California’s absence.
Results
Analysis
When plotted against each other, the data for EV registration count and number of EV charging stations gives us a correlation coefficient of r = 0.92 when using an exponential regression model. While not necessarily demonstrating causation, this coefficient indicates a strong positive correlation between EV charging station count and the popularity of EVs within that state. On the other hand, when State/District incentive count was compared to vehicle registration count and number of EV charging stations the correlation, while still positive, was considerably weaker with coefficients of r = .67 and r = .62 respectively.
When analyzing the types of incentives, the categories of HOV lane exemptions, tax exemptions and loan incentives both demonstrated a roughly equal distribution above and below the trendline, leading to inconclusive results regarding their effectiveness when compared to other types of incentives. However, the distributions of states with these incentives are definitely skewed in the direction of higher EV registration counts, suggesting a correlation between higher adoption rates and the willingness of state governments to issue progressive, monetary benefits to EV owners.
This trend is even more true for states with HOV lane exemptions, all of which fall in the top 40 percentile of states when it comes to EV registration counts. In the same graph, we can also observe a statistically significant data point in the form of Georgia which, despite having a relatively low amount of incentives towards EV adoption, still has one of the largest EV registration counts. This can possibly be explained due to it being the only state other than California (which was excluded in the graph due to being an outlier) to have both a HOV and a HOT lane exemption for EV owners. This could possibly indicate the high effectiveness of HOT lane exemption as an incentive due to its ability to drive high rates of EV adoption despite a relative lack of other EV-related incentives.
Conclusion
The data above parallels the results of a 2014 study done by the International Council on Clean Transportation (ICCT) which utilized a stepwise regression model to conclude that there does, in fact, exist a positive correlation between state EV incentives and EV sales (Jin 2014). The same study also agreed that most effective incentives for EV adoption are subsidies, carpool lane access, emissions testing exemptions, and charger availability (Jin 2014) which can be seen to be true in the graphs above.
In order to suggest optimal policy options for legislators regarding EV incentives a cost-benefit analysis must be conducted. While the conclusions above can give some assessment on the marginal benefit of various types of EV incentives, it is difficult to assess the marginal cost of EV incentives to state governments without accounting for variables such as time, convenience, etc. In terms of benefit, loan-related incentives appear to be the least significant in raising the EV adoption rate, however the cost of these incentives is by far the lowest, even being negative in some cases, which gives them decent value to state legislators.
While it is apparent that number of available public chargers and number of EV incentives are positively correlated with EV sales in a region, the relative impacts of tax exemptions, HOV lane access, and rebates are still decidedly unclear. This conclusion is mirrored both in the data above and in a 2015 study by the NREL (Clinton 2015). With this in mind, when it comes to EV incentive design, state legislators should focus on the auxiliary factors surrounding incentives such as timing, uncertainty, availability, and durability. According to a subsequent study by the ICCT, to have the largest environmental impact and return on investment, EV incentives should be made available to consumers immediately upon purchase, their value should be elucidated to prospective consumers prior to purchase, and they should be available to the full target market for a substantial period of time (Yang 2016).
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