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Summary The electric vehicle offers many promisesâincreasing U.S. energy security by reducing petroleum dependence, contributing to climate-change initiatives by decreasing greenhouse gas (GHG) emissions, stimulating long-term economic growth through the development of new technologies and industries, and improving public health by improving local air quality. There are, however, substantial technical, social, and economic barriers to widespread adoption of electric vehicles, including vehicle cost, small driving range, long charging times, and the need for a charging infrastructure. In addition, people are unfamiliar with electric vehicles, are uncertain about their costs and benefits, and have diverse needs that current electric vehicles might not meet. Although a person might derive some personal benefits from ownership, the costs of achieving the social benefits, such as reduced GHG emissions, are borne largely by the people who purchase the vehicles. Given the recognized barriers to electric-vehicle adoption, Congress asked the Department of Energy (DOE) to commission a study by the National Academies to address market barriers that are slowing the purchase of electric vehicles and hindering the deployment of supporting infrastructure. As a result of the request, the National Research Council (NRC)âa part of the National Academiesâappointed the Committee on Overcoming Barriers to Electric-Vehicle Deployment. The committeeâs analysis is to be documented in two reportsâa short interim report focused on near-term options and a final comprehensive report. The present report fulfills the request for the short interim report that addresses specifically the following issues: infrastructure needs for electric vehicles, barriers to deploying the infrastructure, and possible roles of the federal government in overcoming the barriers; the report also includes an initial discussion of the pros and cons of the possible roles. This interim report does not address the committeeâs full statement of task and does not offer any recommendations because the committee is still in its early stages of data-gathering. The committee will continue to gather and review information and conduct analyses through late spring 2014 and will issue its final report in late summer 2014. This report focuses on the light-duty vehicle sector in the United States and restricts its discussion of electric vehicles to plug-in electric vehicles (PEVs), which include battery electric vehicles (BEVs) 1 and plug-in hybrid electric vehicles (PHEVs). The common feature of these vehicles is that their batteries are charged by being plugged into the electric grid. BEVs differ from PHEVs because they operate solely on electricity stored in a battery (that is, there is no other power source); PHEVs have internal combustion engines that can supplement the electric power train. 2 Although this report considers PEVs generally, the committee recognizes that there are fundamental differences between PHEVs and BEVs. Given that PHEVs can switch over to gasoline when their batteries are depleted, the driving experience tends to be more familiar than that of BEVs, and they do not have the range issues of BEVs. Those differences might influence the type, number, and locations of charging infrastructure required to support the different vehicles. PHEVs have seen a substantial growth in sales over the past year, boosted largely by the existence of more models and range options. However, BEVs have also seen their share rise relative to that of conventional vehicles. Generally, the value proposition for a PHEV versus a BEV is determined by how well it meets a customerâs needs and 1 The term all-electric vehicle (AEV) is sometimes used instead of BEV. 2 PHEVs can use engines powered by various fuels. This report, however, focuses on those powered by gasoline because they are the ones available in the U.S. market. 1
by how well its price matches what a customer is willing to pay. Because the market is still evolving, it is difficult to know whether PHEVs or BEVs will provide the best value proposition for most customers. To identify the needs and barriers associated with PEV deployment, the committee considered the automobile manufacturers, which supply the vehicles to dealers; the customers, who purchase or lease the vehicles; the charging infrastructure, which allows the vehicles to connect to the electric grid and recharge their batteries; and the electric grid, which is the source of the power used for charging the vehicle batteries. The following sections provide the committeeâs findings and possible roles for the federal government in overcoming the identified barriers. THE CUSTOMERS, MANUFACTURERS, AND DEALERS Customers include individuals, households, and organizations, such as rental-car companies, corporations, and governments. The committee focused primarily on individuals and households because they make up the largest segment of potential buyers and because there might be more obstacles to their adoption of PEVs. It also considered barriers that automobile manufacturers and dealerships face in promoting the adoption of PEVs. Major findings and possible federal roles in overcoming barriers are presented below. Finding: Most potential PEV customers have little knowledge of PEVs and almost no experience with them. Lack of familiarity with the vehicles and their operation and maintenance creates a substantial barrier to widespread PEV deployment. Possible Federal Roles: Produce public-service announcements that showcase current PEV owners, describe the benefits of PEV ownership, and illustrate how a PEV meets various transportation needs; create marketing campaigns to help customers to understand incentives and that target audiences that have transportation needs that might fit PEVs; and provide ride-and-drive activities or demonstrations at high-visibility locations to familiarize the public with PEVs. Finding: PEVs have higher purchase prices than comparable conventional vehicles. Research indicates that people heavily discount the value of future gains; sticker- price premiums typically will be difficult to overcome with fuel-savings promises alone. Possible Federal Roles: Continue to provide economic incentivesâsuch as continuing or extending tax credits or rebatesâto encourage customers to buy PEVs; increase the tax on gasoline by increasing taxes on motor fuels or by instituting a broad-based carbon tax; and use the convening function to coordinate state and local incentives that would encourage PEV ownership and use, such as access to carpool lanes, parking benefits, and reduced vehicle registration or licensing fees. Some research has shown that purchase rebates can be more effective than income-tax credits. Finding: Most BEVs have small driving ranges, and this could be a substantial barrier to their widespread adoption. However, commuting by electricity stored in vehicles should be feasible on a large scale in the United States given that some BEVs can routinely travel 40-80 miles on one charge and that nearly 70 percent of average daily travel is less than 40 miles and more than 90 percent is less than 80 miles. Finding: Few data on customer perceptions, attitudes, and behavior regarding PEVs are publicly available. Although some studies have examined those topics, further research could help to determine how to structure effective programs and policies. 2
Little research has been conducted to determine which government policies concerning PEVs are the most successful and why. Possible Federal Role: Support research to obtain a better understanding of why potential customers would or would not purchase PEVs and how they have responded to various initiatives, programs, or incentives that are aimed at promoting widespread PEV adoption, including DOEâs Clean Cities programs; and revise or adapt programs as information on their effectiveness is collected. Finding: Few PEV model choices are offered to customers, and the variety offered does not meet the needs of all customers. However, sales of PEVs must increase to justify further investment by automobile manufacturers to diversify the products offered. Possible Federal Role: Continue to support research on and development of electric-drive technologies to improve their performance and reduce their costs; reduced costs would encourage purchase and indirectly encourage the use of electric-drive technology in a variety of models. Finding: Dealerships are independent franchises that are not owned or operated by the automobile manufacturers. Training and educating dealership personnelâ salespersons, mechanics, financial specialists, and managersâentail substantial costs to a franchise. Given those costs, many dealerships do not appear to be fully prepared to explain PEVs and educate customers about them. As a result, there appears to be an information gap at the primary point of sales. THE CHARGING INFRASTRUCTURE Charging a PEV is analogous to filling the fuel tank of a conventional vehicle with gasoline, although at a much lower rate. PEVs can be âfilledâ at a variety of locations, including private residences and workplaces; thus, the electric analogue of a gas station is not likely to be the primary source of energy for a PEV. Furthermore, unlike a conventional vehicle, PEVs can be âfilledâ at different rates by using different charger types. Charging rate affects the length of time required to charge a PEV, the equipment and installation requirements, and the cost of providing charging at a particular location. Most electric charging infrastructure is (and is likely to remain) at residences, where PEVs are available for charging for the longest time. Because PEVs are also parked at workplaces for substantial periods on each workday, workplace charging is a promising option if practical ways can be found to provide the needed infrastructure. PEVs typically have much less time available for charging while parked in public places, but charging in public places may be feasible if fast charging is available, if a vehicle is parked for at least 4 hours, or if only a partial battery charge is needed. In addressing issues about charging-infrastructure needs, the committee assumed that the goal was to maximize the fraction of miles fueled by electricity for light-duty vehicles. The committee recognizes that the goal influences the type, number, and location of charging infrastructure needed and that other potential goals, such as maximizing the number of PEVs on the road or maximizing the number of miles traveled by BEVs, might lead to different conclusions. In light of the committeeâs stated goal, it is indifferent to whether PEV electric miles are traveled by BEVs or PHEVs. The infrastructure needs and barriers and some options for overcoming the barriers at the various locations are offered below. Finding: An overarching need for the deployment of all aspects of the PEV charging infrastructure is an understanding of the charging needs for PHEV and BEV drivers, how their needs might change in the future, and how they might change in response to various policy initiatives. Those needs are affected by a variety of 3
factors, including the types of PEVs on the road, travel patterns of these vehicles, and the costs of charging at different locations. Possible Federal Role: Continue efforts to collect, analyze, and disseminate data on vehicle charging, PEV sales, and policy effectiveness. The resulting information could help address the extent to which various charging options meet residential, workplace, and publicly accessible charging needs. It could also improve understanding of what policies are most effective in maximizing the fraction of electric miles traveled. The analysis could include research to understand the effects of installing charging infrastructure on economic and related activity. Residential Charging Finding: There are no serious technical barriers to the installation of charging infrastructure at most residences that have access to garages or carports. Charging at such residences would meet the needs of all foreseeable PHEVs and of most BEVs that have ranges of up to 100 miles. The main barriers to the widespread adoption of residential charging of PEVs appear to be the cost and the effort of installing the wiring and charging apparatus. Possible Federal Role: Continue tax incentives and subsidies for installing charging infrastructure and encourage state and local governments to streamline permitting and to adopt building codes that require new construction to be PEV-charging-enabled. Finding: Residential charging is problematic for residences that have access only to on-street parking, as might be the case for multifamily dwellings in high-density locations. Residential charging also might be problematic for those who rent their homes and therefore would not have authority to make structural changes to the property that would be required for installing a charger and possible electricity upgrades. An owner of a rental property could be reluctant to invest in charging equipment that might not be used by the next tenant. Thus, for those drivers who lack access to residential charging, the barriers might be partially overcome by having access to workplace or public-charging infrastructure. Possible Federal Role: Encourage or subsidize local governments to establish dedicated parking spots or install charging infrastructure that is publicly accessible. Workplace Charging Finding: Increasing the availability of workplace charging infrastructure offers a potentially important opportunity to encourage the adoption of PEVs. The workplace provides a place where vehicles are parked typically for at least 8 hours during the day. Over that time, even a low-power charger can add a useful amount of vehicle range. Important unknowns regarding workplace charging infrastructure are the potential effects and needs if and when much larger battery capacity becomes affordable; this might be particularly important in less densely populated areas. Another important unknown is how the use of workplace charging might depend on whether employees have to pay for it. 4
Possible Federal Roles: Offer a financial incentive, such as an accelerated depreciation schedule, so that businesses are more willing to offer workplace charging; exempt electricity provided by workplace charging infrastructure from being treated as a taxable benefit; work with utilities and their regulators to minimize special charges that might be incurred because of workplace charging; and support research on demonstration installations. Publicly Accessible Charging Finding: Publicly accessible charging infrastructure provides several important benefits, such as extending the electric range of all PEVs, relieving range concerns of BEV owners, and providing increased visibility of both PHEVs and BEVs. However, the high cost of installing public charging stations and the little revenue obtained from providing electricity present challenges for developing sustainable business models. In the near term, deploying publicly accessible charging infrastructure might require public-private partnerships or other forms of continued government support. Possible Federal Roles: Provide incentives to demonstration projects that propose credible business models that could eventually be sustained when subsidies are no longer available; provide increased clarity and simplicity regarding regulatory compliance with such laws as the Americans with Disabilities Act; and incentivize landowners, retailers, and public agencies to offer host sites for installing charging infrastructure in key highway corridors. Standardization of Charging Infrastructure Finding: It is critical to standardize the many components of the charging infrastructure. Multiple plugs for fast chargers and the lack of standardization of payment methods for various charging networks are particularly problematic. Possible Federal Role: Use the convening function to encourage standardization of charging plugs and payment methods. The committee recognizes that such standardization might restrain innovation, but increasing compatibility increases coverage of the whole charging infrastructure. THE ELECTRIC GRID Another important consideration for PEV deployment is the electric grid, which provides the electricity that powers PEVs. The mass deployment of PEVs would create a substantial new load for the electric grid, and how the power sector handles such a new load might affect the deployment of PEVs. This section presents the committeeâs findings regarding the electric grid. Finding: The existing electric infrastructure does not present a barrier to the expansion of PEV technology in the United States given the projected growth of PEV use in the next decade. With the exception of a scenario in which PEVs are concentrated within an overburdened branch of the distribution system, no major physical barriers have been identified. Finding: As PEVs account for a more significant share of total electricity consumption, the committee sees no barriers to provision of generation and 5
distribution capacity to accommodate the growth through the normal processes of infrastructure expansion and upgrades in the electric utility industry. Finding: The current time-based rate structures (time-of-use or real-time pricing) available to most commercial and industrial customers and some residential customers provide an incentive to PEV owners and utilities in that they encourage charging at times when lower-cost generating capacity is available. Finding: Regulating third-party entities (nonowner, nonutility charging service providers) as utilities could increase operating costs and decrease business-model flexibility. Furthermore, the role and scope allowed to utilities (as opposed to third- party entities) in providing charging equipment are unclear. Finding: The lack of access to or price premium for clean electricity could be a barrier to PEV adoption by vehicle owners who are seeking to mitigate their environmental impact. Overall, however, there is already a net benefit of using PEVs compared with using vehicles that have traditional internal combustion engines given the existing mix of electricity-generation sources. The benefit can be increased by a continued transition to generation sources that have lower life-cycle emissions. CONCLUDING REMARKS Overall, the committee found that there are no serious technical barriers to the deployment of charging infrastructure at residences, workplaces, and publicly accessible locations. A substantial fraction of detached homes have the capacity for at least basic charging, although widespread deployment might pose challenges in the case of multifamily housing and rental properties. Increasing the availability of workplace charging is an important infrastructure opportunity given that vehicles are typically parked at workplaces for at least 8 hours each day during the workweek. Workplace charging might also present a primary charging opportunity for those who lack access to residential charging. In the case of publicly accessible charging, the high installation costs and low revenue associated with providing electricity present challenges for developing sustainable business models and thus might require public-private partnerships or other forms of continued government support in the near term. The committee has suggested a variety of possible roles for the federal government, some of which the federal government is already pursuing. Many of the activities suggested here could increase the publicâs familiarity with PEVs and encourage their adoption. Others could provide information that would help in designing effective policies and ensure that the PEV investment is working to increase the fraction of electric miles traveled. The disadvantages of the possible activities are that they require resourcesâtime, money, or staff. The strain on federal resources emphasizes the need to understand which policies are most effective, what does not work, and the best ways to revise or restructure policies or programs to make them more effective. The committeeâs final report will explore those and other options further and will consider other barriers to PEV deployment, including technologic and economic ones. 6