DURHAM – The Ford F-150 pickup truck is an iconic symbol of America and tne new electric version is an example of EVs that could one day rule the vehicle world. But … not yet.
Though Ford announced this week that the company expects that 40% of global sales will be electric vehicles by 2030, and will invest an additional $8 billion by 2025 and a total of about $20 billion to do so, and other U.S. automakers, like GM, plan to move all sales of new vehicles to electric vehicles by 2035, there remain challenges.
Timothy Johnson, a professor of the practice of energy and the environment at Duke University, discussed the state of the electric vehicle industry via a livestreamed Q&A with colleague Jennifer Weiss, senior policy associate at the Nicholas Institute for Environmental Policy Solutions at Duke University recently. The discussion took place shortly after President Joe Biden test drove a new electric F-150 in Michigan earlier this month.
“This is a mainstream, all-American vehicle, a pickup truck, it’s iconic,” said Johnson, “Which wasn’t originally designed as an electric vehicle, but these can be electric, and they can perform really well as well.”
Ford did not announce when its electric vehicles would hit the market, but it did note that much of its 40% sales target will come from sales in Europe–where the company pledged to convert all passenger vehicles to electric by 2030–not sales in the United States.
US adoption lagging behind?
An April 2021 report from the International Energy Agency (IEA) described the state of the automotive market in the United States, noting that while there was an overall decline in the U.S. car market of 23% in 2020, electric vehicle registrations fell less than the overall market, and the share of battery-powered electric vehicles increased to 2% in the United States in 2020, even as federal incentives, such as tax credits, decreased.
It’s a chicken-and-egg problem, said Weiss, addressing how and when electric vehicles could become more widespread. “Dealerships right now don’t have a lot of electric vehicles on the lots,” she noted. “Until we see a lot more of the electric vehicles actually on the lots so people can test drive them and compare them to a traditional fuel vehicle, I think we have a little bit more of an uphill climb.”
Cost remains a concern for consumers, as well, said Johnson. Despite the overall cost of ownership being lower for an electric vehicle, there is an up-front premium that consumers are required to pay in order to acquire an electric vehicle compared to a gas vehicle, he noted, which makes it challenging for electric vehicles to be a viable option for those with lower incomes. “And if you’re buying a used car, there are fewer used electric vehicles out there as well.”
Yet policymakers and businesses are anticipating an increasing adoption of electric vehicles, as announcements from GM, Volvo, and now Ford, regarding the transition to electric vehicle manufacturing, are opening eyes to the possibility of economic development. That’s especially true in the Southeast, noted Weiss.
“Over the last 10 years we’ve seen a shift in an understanding of how much economic development the electric vehicles can bring,” said Weiss. “Especially in here in the Southeast we’ve seen a lot of auto manufacturers start to either switch over entire plants to have electric vehicles or at least partially switch over.”
GM, for example, recently announced the intention to invest $2.3 billion in a new facility in Tennessee, and the electric vehicle startup Arrival, which develops electric lightweight commercial vehicles, chose Charlotte for its U.S. headquarters and is building out a manufacturing facility just across the South Carolina state line.
Economic development opportunity is not limited to manufacturing, said Weiss, as one follow-on effect of an automaker investing in a region is the relocation or creation of automotive suppliers.
“From a political perspective … that’s really important,” said Weiss. “We want to be building that, we want to have the economic development. At the same time, we want to be training our workers to work with electric vehicles. The jobs are going to be increasing in that area.”
But politics may also play a negative role in adoption, noted Johnson, stating that it’s unfortunate that electric vehicles have become a symbol that connotes something about an individual’s political views and opinions.
“My hope is that with EVs, whether they are individuals or fleet managers who become familiar with these things, realize the benefits of buying them, owning them, some of that political baggage will drop,” he added.
There’s been a fair amount of interest in electric vehicles on the fleet side, noted Johnson, and that’s because of the economic opportunity available to fleet managers and to the purchasers of fleet vehicles, which can absorb the larger up-front costs of an electric vehicle, knowing that they’re a lot cheaper to operate and to maintain in the long run.
“The fuel costs are lower but the maintenance costs are a lot lower,” said Johnson. “From an economic standpoint there’s growing interest.”
“Gasoline prices would have to be very cheap or electricity prices would have to be very high before, on a per-mile basis, it’s going to cost you more to charge an electric vehicle than to tank up a gasoline vehicle,” he added.
State of EV infrastructure
Infrastructure will be needed, agreed Johnson and Weiss, for light-duty, private vehicles, as well as for heavy-duty vehicles like freight, emergency vehicles, buses, and garbage trucks.
“Right now for people who own electric vehicles, and you can argue whether they’re representative of the general population, most charging takes place at home,” said Johnson. “These are people who tend to live in single-family homes, with garages or at least a charging unit.”
The way most Americans most often use their private vehicles is for in-town trips, such as a trip to the office and back, a trip to a grocery store or shopping center, or a trip to activities. Nearly all electric vehicle batteries are now capable of providing the range necessary for a personally-used vehicle to make these daily trips, however, that’s the current state of the market and it’s important to figure out the additional infrastructure that will be needed, noted Johnson, as more electric vehicles enter the roadways.
Investments in electric vehicle infrastructure, typically charging stations, is already underway in North Carolina, including a $25 million pilot program launched by Duke Energy that will install, own, and operate 160 Level 2 charging stations at public destinations, as well as 40 fast-charging direct current stations in North Carolina.
But these investments have largely been along major transit corridors, I-95, I-85, and I-40, and leave out investments in rural parts of the state, said Weiss. “They’re not always on the radar when we’re building out investment because they’re not on the main corridors, the main highways. But it’s so important to build out the infrastructure in our rural areas.”
Infrastructure installation has a utilitarian function, noted Johnson, in that a charging station, say, at a workplace, provides workers the use of a station while they’re working. It’s also important to think about other functions and benefits that ample infrastructure could provide.
Weiss noted that a common prevailing concern among non-electric vehicle owners, who have considered an electric vehicle purchase, is range anxiety, or the worry and concern that there wouldn’t be an adequate charging station available when it was most needed. She, herself, experienced that anxiety as a driver of an electric vehicle, noting that she would stop using her car when it had 40 miles left, just because she wanted to ensure it was fully charged before using it again.
So another goal of installing infrastructure might be addressing this concern, meaning that there may be a benefit to charging stations being ubiquitous, in every community across the state, not just along major highway corridors.
“Give the end user the comfort and feeling that they’re going to be able to charge wherever they go, just like going to a gas station today,” said Weiss. “If they’re going to a workplace every day, make sure there’s a charger there. That’ll reduce the anxiety of getting to work and back. If they’re going to the grocery store, if they’re going to a restaurant or a doctor, just make sure we’re placing it where they are so that while they’re doing the other things they do in their life, they’re able to charge the car back up and get over that range anxiety.”
As it turns out, there’s an economic argument that can be made to induce retailers or gas station owners to invest their own working capital in charging stations, and to make the use of those stations cheap, or complimentary.
“Owners of filling stations or gasoline stations are surely interested in what this means for their business,” said Johnson, noting that the majority of profit actually comes from the purchase of things other than gasoline.
Retailers know that the longer that someone remains in their store, the more likely they are to spend, or increase their spending, said Weiss. Retailers may have an incentive to install charging stations, and some are looking at their data and noting that they can provide charging for free, she said, due to the expected increase of revenue in their store from visitors using those charging stations.
“Where you may see more of an opportunity for fun is with fast charging. You’re trying to attract EV owners who are traveling a far distance and need a fast charge to get back on the road,” said Johnson. “It may still take 45 minutes to an hour to get back on the road, so the restaurant pairing with an EV charger makes sense there.”