Editor's note: Follow Duke Energy CEO Lynn Good on LinkedIn, where this article first appeared. LinkedIn members can read, like, share and comment on Good's posts.
The gas-powered car has remained the dominant mode of transportation since it first began fueling motor vehicles in 1886. But the internal combustion engine is finally starting to lose its stranglehold on the market. The disrupter? Electric vehicles (EVs).
The U.S. recently hit a major milestone – 1 million EVs on the road. And we’re seeing similar progress globally.
Earlier this year, we passed 4 million in global EV sales – and the pace is accelerating. Consider this statistic: It took 17 months to go from 2 million to 3 million EVs worldwide, but just six months to go from 3 million to 4 million.
What’s brought us to this point? Policy, affordable options for consumers and appropriate infrastructure.
In the U.S., California, which has a zero-emission vehicle (ZEV) program, is the clear leader in adoption. The state accounted for roughly half the country’s 200,000 EV sales in 2017. Nine other states have adopted similar programs. In addition, the federal government and many states offer financial incentives to make EVs more affordable, including a federal tax credit of up to $7,500 in this early stage of adoption. These incentives play a role in stimulating customer interest.
Countries like Norway, Iceland, China, Japan and the United Kingdom have also implemented policies to encourage EV adoption. With help from government subsidies, Shenzhen, China, became the first city to electrify 100 percent of its public buses. That’s over 16,000 buses – more than the combined fleets of New York City, Los Angeles, New Jersey, Chicago and Toronto.
Infrastructure and options
Two other important factors impacting the rate of adoption are the availability of more robust infrastructure and the expanding number of vehicle options.
There are now more than 56,700 charging outlets in the U.S. – a 20 percent increase in the past year – and that’s projected to increase dramatically over the next decade. Globally, there will be a projected 40 million charging stations by 2030.
As for choice, 45 EV/plug-in hybrid car models will be available by year-end. That number is expected to double by 2020, giving customers more choices.
Auto companies are announcing ambitious programs to transition their vehicle lineup to electric. For example, Volkswagen, the world’s largest automaker, plans to invest $50 billion – the market capitalization equivalent of General Motors – by 2023 as part of its shift to electric and autonomous vehicles.
The role of utilities
Energy providers need to be prepared to power this shift to EVs.
With the influx of EVs in our markets, Duke Energy, like other utilities, is helping build the infrastructure needed to support our customers – from public EV charging stations and residential charging rebates to direct current fast charger sites along major transportation corridors.
We see extraordinary potential in EVs to benefit our customers, the environment and the economy:
- Fuel cost savings: Customers can expect to save roughly $1,000 a year in fuel by switching to an EV. In addition, EVs help minimize maintenance costs since they do not require oil changes or engine tuneups and they have fewer moving parts.
- Environmental impact: In the U.S., transportation is now the leading producer of emissions. EVs enable customers to reduce their carbon footprint and greenhouse gas emissions.
- Economic stimulus: The fuel cost savings remain in the local economy, especially as consumption shifts from oil to more locally-produced energy sources. In addition, money now not spent on fuel or maintenance could be invested back into local communities.
EV batteries use the same lithium ion technology as utility-scale battery installations. So, the same battery in your Volt or Tesla, is the same basic technology as the one backing our wind farms in Texas – just a different packaging and size. So, as EV demand drives supply up – the technology will improve and costs will come down across all lithium ion battery technologies.
EVs also hold the potential for load balancing – meaning they could work as a kind of distributed battery to help take or provide energy to the grid. Today, we’re seeing the benefit from charging during off-peak hours where EV charging takes excess energy off the grid at night when other energy usage is down. In the future, with customers’ permission, utilities could potentially draw electricity from a car battery to the grid during times of peak energy demand.
The road ahead
The EV revolution is coming. The Edison Electric Institute (EEI) and the Institute for Electric Innovation (IEI) forecast that 18.7 million EVs will be on the road in the U.S. by 2030.
Utilities will remain engaged and enthusiastic participants in this growing market. The industry will play a critical role in the future of EVs, and we are ready to meet our customers’ needs as they make this historic switch.
Follow Lynn Good on LinkedIn, where you can read, like, share and comment on Good's posts.