The shift to electric vehicles must now prioritize charging stations
Incentives for developing and owning electric vehicles have done their part to steer the United States into a far more sustainable future. While currently comprising only about 2 percent of the U.S. fleet, EVs could more than 15 percent of all vehicles on the road by 2030, according to a PwC analysis.
Now, we need an aggressive build-out of a nationwide charging infrastructure that is so pervasive that any EV owner — no matter where they live and no matter their driving routes and patterns — will be able to conveniently charge up.
With automakers planning to introduce more than 70 EV nameplates over the next seven years, we are fast approaching an inflection point at which it may make more sense to shift from incentivizing the purchase of EVS to the development of commercial and public charging infrastructure.
With roughly 80 percent of EV owners now charging at home at night, one might wonder what’s the urgency? But home-charging doesn’t cure “range anxiety” on long trips. There’s also the problem of so-called charging deserts. What about that apartment-dweller in Brooklyn who has to charge up for a couple of hours in a different neighborhood or the family considering a cabin rental for the week? If EVs are ever to hit the mainstream — and our research shows it’s getting closer — incentives that act to clear as many early adopter barriers as possible at the point of purchase make the most sense.
A PricewaterhouseCoopers analysis estimates that in about four to six years, EVs can achieve total cost of ownership parity with internal combustion engine vehicles, at which time EV ownership will likely accelerate. Given this timeline, now is the time to put the pedal to the metal on incentivizing charging infrastructure. Put another way, the United States has just a few years to put in place a charging infrastructure for EVs that has taken a century to meet the needs of internal combustion engine vehicle owners. What good will it be if we reach a point when owning an EV is more economically attractive than an internal combustion engine vehicle, but it is still inconvenient or even untenable (for a large segment of the population) to charge up?
What more can be done to make EV charging an attractive investment? Solving the needs of “on-the-go” EV drivers and EV owners without access to home-charging will, in most cases, mean installing a commercial network of fast chargers (Level 3 and 4). But, they’re expensive — as much as $100,000 in capital investment. In some cases — such as charging in parking garages, at-work parking lots, shopping malls, etc., — slower and less expensive chargers (Level 1 and 2) could suffice. Overall, though, the economics of commercial charging stations is currently unattractive for many investors.
The good news is policies are starting to shift in favor of charging. An increasing number of states, municipal governments and even utilities offer additional tax credits, rebates and grants (for both homeowners and businesses) to support the growth of EV-charging investments. For example, the Take Charge Ready NY program provides a $4,000 rebate for every Level 2 charging station installed at most parking lots, whether it be residential, commercial lots, office buildings or public parking. More state and local governments following suit would further serve to achieve an equitable availability of charging to EV owners that cannot have a home charger.
A pro-charging policy emphasis is gaining traction on the federal level, too. President Joe Biden announced measures to accelerate EV adoption — including plans to deploy 500,000 new public charging stations by 2030. Also, in January 2020, the Alternative Fuel Infrastructure Tax Credit was retroactively reinstated and provides businesses a 30 percent (or up to $30,000) tax credit for EV charging stations installed and in service from 2018 through the end of 2021. Extending this tax credit beyond 2021 is critical to lowering the barrier to entry for potential stakeholders. Raising the tax credit would likely do even more to achieve this.
The end goal is not to dismantle the nation’s highly efficient and critical network of existing gas/diesel stations. Far from it. Rather, pulling policy levers toward incentivizing electric charging infrastructure is about expanding choice for the nation’s drivers on where and how they can fuel up — and right at the moment when many more are ready to make the switch.
Akshay Singh is principal, Industrial and Automotive Industries, at PricewaterhouseCoopers. email@example.com