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Electric Vehicles

As much as $125 billion needed by 2030 to support EV growth: Brattle report

An investment of between $75 billion and $125 billion in the electric power system will be needed by 2030 to serve 20 million electric vehicles, according to a report by The Brattle Group.

There will be 10 to 35 million electric vehicles in the United States by 2030, a steep rise from the 1.5 million electric vehicles on U.S. roads in 2020, Brattle economists estimate. Factors driving the proliferation of electric vehicles include decreasing vehicle and battery costs, an expanding variety of electric vehicle models, more widespread charging infrastructure, as well as favorable federal and state policies and incentives, they say.

The investments needed to support the expected spread of electric vehicles includes $30 billion to $50 billion for generation and storage, $15 billion to $25 billion for transmission and distribution upgrades, and $30 billion to $50 billion for electric vehicle chargers and other customer-side infrastructure, the report, Getting to 20 Million EVs by 2030: Opportunities for the Electricity Industry in Preparing for an EV Future, says.

“While EVs and chargers are becoming more common in our everyday lives, the industry is really just seeing the tip of the iceberg when it comes to the impact that EVs will have on the grid,” Michael Hagerty, Brattle senior associate and study coauthor, said in a statement.

Among the challenges Brattle sees as electric vehicles become more prevalent is an increase in charging demand of between 60,000 gigawatt hours (GWh) and 95,000 GWh per year, including a 10 gigawatt (GW) to 20 GW rise in peak load from electric vehicle charging. Those increases in electricity use and load will require the addition of between 12 GW and 18 GW of renewable resources to maintain compliance with state mandates, such as renewable portfolio standards, that require minimum levels of renewable energy.

Deeper penetration of electric vehicles will also necessitate the expansion of charging infrastructure. So far, less than $2 billion has been approved for utilities to build charging infrastructure, but only 159 public charging stations are utility owned, representing about 0.6% of all public charging stations.

In all, the country will need about 1.25 million public chargers to fuel 20 million electric vehicles by 2030, representing a 20-fold increase in Level 2 chargers, a fivefold increase in direct current (DC) fast chargers, as well as 6 million to 10 million of residential Level 2 chargers installed at single family homes, Brattle estimates.

Meanwhile, Tesla has spent about $220 million building out its Supercharger network of over 800 stations. ChargePoint network has 38,000 chargers and plans to add 2.5 million globally by 2025. And Electrify America is investing $2 billion in Zero Emission Vehicle infrastructure by 2027.

Electrify America recently announced the completion of the first charging network that would enable an electric vehicle to travel cross country.

One of the challenges system planners will face is finding reliable, regional forecasts for electric vehicles sales, the report says. Most forecasts provide “limited insight” into local adoption rates as they are based on “black-box” models that can be challenging to understand

According to Brattle’s analysis, states with zero emission vehicle mandates have 26% higher electric vehicles sales, a $1,000 increase in electric vehicle incentives increases sales by 7.5%, a $10/kWh decrease in battery prices leads to a 4% increase in sales, and for every 10 additional electric vehicle models introduced sales increase by 8%.

Brattle recommends that industry planners and policy makers should develop plans, or roadmaps, that include detailed electric vehicle adoption forecasts, craft policies that articulate societal benefits of electric vehicle adoption, and facilitate collaboration across the electric vehicles supply chain to reduce market barriers, such as targeting under-served markets that are not prioritized by private investment.

More specifically, Brattle says the tension between private and utility investment needs to be resolved. Regulators often try to balance the need to provide sufficient charging infrastructure with the desire to keep the market open to competitive suppliers.

The Brattle report says there should be a “Win-Win-Win” approach among utilities, regulators and the private sector that recognizes that private investment will lead to increased product demand and sales and that increased electric vehicle utilization will lead to higher electricity sales and improved asset utilization for utilities.

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