Growing pressure to cut greenhouse gas emissions is likely to make America one of the world’s largest electric vehicle markets. Here’s what to expect over the next decade.
Climate change is at the top of the global political agenda, and it will mean re-thinking the way we travel. Transportation produces almost a third (28%) of United States’ greenhouse gas emissions, according to the EPA, with 80% of that coming from road vehicles. Worse still, emissions are still rising; a growing population and healthy economy have fuelled a 47% increase in total mileage between 1990 and 2022, counteracting year-over-year improvements in vehicle efficiency [1].
Although the pathway to sustainable transport is still up for debate, electric vehicles will undoubtedly play an important role. In the United States, the International Council on Clean Transportation (ICCT) claims lifecycle CO2 emissions are already between 57% and 68% lower than gasoline vehicles, and that gap will widen to between 61% and 76% in 2030 [2]. Not surprisingly, lawmakers are aligning behind electrification – and it’s happening quickly.
How big is the U.S. electric vehicle market?
The transition is already underway. According to the latest International Energy Agency (IEA) data, only 2.3% of new cars were electric or plug-in hybrid in 2018 – last year, this had increased to 9.5% [3] as consumers accessed a wider choice of longer range, faster charging and more competitive vehicles. Federal tax credits of up to $7,500 [8] and state incentives are also helping to bring prices down.
That trend isn’t likely to reverse. Production costs are shrinking with economies scale and localisation of supply chains, and battery prices are falling too. The average price per kilowatt-hour fell 82% between 2013 and 2023 [4], and two of China’s biggest manufacturers have announced a 50% reduction this year [5].
What are the sales targets for electric cars?
Manufacturers are facing state and federal targets, both of which are setting a pathway to phasing out traditional gasoline and diesel engines:
- Advanced Clean Cars II, devised by the California Air Resources Board (CARB), requires all new passenger cars, trucks and SUVs to be zero-emission vehicles by 2035. Targets are adjusted annually, starting at 35% of sales in 2026 [6]. An additional 13 states and the District of Columbia have adopted the same 2035 deadline, but with different start dates [7].
The EPA’s latest Greenhouse Gas standards were announced in March 2024, and require a 50% reduction in average CO2 emissions between 2026 and 2032. There are no specific electric vehicle targets, but the agency expects they will account for between 30% and 56% of sales from 2030 [8].
What are the sales targets for heavy-duty vehicles?
The transition away from fossil fuels will happen more slowly for larger vehicles. However, demands at a state and national level are ramping up – and there are targets for fleets, too.
Manufacturers are working towards several non-aligned deadlines:
- The Multi-State ZEV Action Plan includes 17 states and the District of Columbia. It’s a memorandum of understanding aiming for at least 30% of new medium and heavy-duty vehicles to be electric by 2030, and 100% by 2050 [9].
- The EPA’s Greenhouse Gas Emission Standard (Phase III) includes CO2 reduction targets for heavy-duty vehicles between 2026 and 2032, ranging from 25% for long-haul semi tractors to 60% for vocational trucks. It’s a technology-neutral standard, leaving it up to manufacturers to deploy sector-appropriate solutions – even if they are not zero-emission [10].
- CARB’s Advanced Clean Trucks rule sets progressively higher zero-emission sales targets starting in the 2024 model year, depending on the class of vehicle. By 2035, 55% of new Class 2b and Class 3 sales, 75% of Class 4-8 vehicles and 40% of new semi-truck tractors will need to be zero emission models [11]. Another 11 states have adopted the same timeline.
Some truck fleets also have transition targets ahead:
The CARB Advanced Clean Fleet rule will end the sale of new combustion-engine trucks by 2036, with a range of deadlines for different fleet types to electrify their vehicles. The targets apply any business operating one or more vehicles in California, even if they are headquartered out of state [12].
How is the government supporting charging infrastructure?
By 2030, the IEA predicts 55% or new cars will be plug-in hybrid or electric vehicles, displacing 1.65 million barrels of oil over the course of the year [3]. It’s a big change for fuel retailers, with Boston Consulting Group claiming up to 80% of c-stores will be unprofitable by 2035 unless they adapt to the increasingly electrified vehicle parc [13].
However, there is support available for that transition. The Federal Highway Association’s National Electric Vehicle Infrastructure (NEVI) fund provides up to 80% towards installing, operating, maintaining and gathering data from charging points [14]. Its aim is to create Alternative Fuel Corridors, in phases, along the country’s main road networks – and c-stores are ideally located to meet that demand.
Konect by Gilbarco Veeder-Root is designed to help fuel retailers capitalise on the opportunities ahead. It’s a unique, turnkey charging ecosystem designed to integrate easily into forecourt systems and enable c-stores to introduce their own infrastructure with confidence. To find out more, click here.
REFERENCES:
[1] Environmental Protection Agency (EPA) (n.d.) Sources of Greenhouse Gas Emissions. Available at: https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions (Accessed 5 June 2024).
[2] International Council on Clean Transportation (2021) Global Vehicle Life Cycle Assessment (LCA) White Paper. Available at: https://theicct.org/wp-content/uploads/2021/07/Global-Vehicle-LCA-White-Paper-A4-revised-v2.pdf (Accessed 5 June 2024).
[3] International Energy Agency (2024) Global EV Data Explorer. Available at: https://www.iea.org/data-and-statistics/data-tools/global-ev-data-explorer (Accessed 5 June 2024).
[4] BloombergNEF (2023) Lithium-ion Battery Pack Prices Hit Record Low of $139/kWh. Available at: https://about.bnef.com/blog/lithium-ion-battery-pack-prices-hit-record-low-of-139-kwh/ (Accessed 5 June 2024).
[5] CnEVPost (2024) Battery Price War: CATL and BYD Drive Costs Down. Available at: https://cnevpost.com/2024/01/17/battery-price-war-catl-byd-costs-down/ (Accessed: 5 June 2024).
[6] California Air Resources Board (2023) Advanced Clean Cars II. Available at: https://ww2.arb.ca.gov/our-work/programs/advanced-clean-cars-program/advanced-clean-cars-ii (Accessed 5 June 2024).
[7] California Air Resources Board (n.d.) States That Have Adopted California’s Vehicle Regulations. Available at: https://ww2.arb.ca.gov/our-work/programs/advanced-clean-cars-program/states-have-adopted-californias-vehicle-regulations (Accessed 5 June 2024).
[8] Environmental Protection Agency (2024) Regulations for Greenhouse Gas Emissions from Passenger Cars and Trucks. Available at: https://www.epa.gov/regulations-emissions-vehicles-and-engines/regulations-greenhouse-gas-emissions-passenger-cars-and (Accessed 5 June 2024).
[9] Northeast States for Coordinated Air Use Management (n.d.) Multi-State Medium- and Heavy-Duty Zero-Emission Vehicle Action Plan. Available at: https://www-f.nescaum.org/documents/multi-state-medium-and-heavy-duty-zero-emission-vehicle-action-plan (Accessed 5 June 2024).
[10] Environmental Protection Agency (2024) Final Rule for Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles. Available at: https://www.epa.gov/regulations-emissions-vehicles-and-engines/final-rule-greenhouse-gas-emissions-standards-heavy-duty (Accessed 5 June 2024).
[11] Environmental Protection Agency (2024) Final Standards to Reduce Greenhouse Gas Emissions from Heavy-Duty Vehicles for Model Year 2027 and Beyond. Available at: https://www.epa.gov/system/files/documents/2024-04/420f24018.pdf (Accessed 5 June 2024).
[12] California Air Resources Board (n.d.) Advanced Clean Fleets Regulation Overview. Available at: https://ww2.arb.ca.gov/resources/fact-sheets/advanced-clean-fleets-regulation-overview (Accessed 5 June 2024).
[13] Environmental Protection Agency (EPA) (n.d.) Clean Heavy-Duty Vehicles Grant Program. Available at: https://www.epa.gov/clean-heavy-duty-vehicles-program/clean-heavy-duty-vehicles-grant-program (Accessed 5 June 2024).
[14] Federal Highway Administration (n.d.) National Electric Vehicle Infrastructure (NEVI). Available at: https://www.fhwa.dot.gov/environment/nevi/ (Accessed 5 June 2024).