Future Driven Forum Panelists Highlight Increasing Urgency for Investment in Electric Vehicle Infrastructure

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On September 14, 2021, the Alliance for Automotive Innovation hosted a program entitled “Accelerating Electrification: Plugging In” through its Future Driven Forum.  The program was moderated by John Bozzella – President & CEO of the Alliance, and speakers included Max Baumhefner – Senior Attorney, Climate & Clean Energy Program at the Natural Resources Defense Council, Maria S. Bocanegra – Commissioner of the Illinois Commerce Commission, Kellen Schefter –  Director of Electric Transportation at Edison Electric Institute, and Terry Travis – Managing Partner and Co-founder at EVNoire.

The program focused on the importance and impact of investment in infrastructure needed to support Electric Vehicles (EVs).  Currently, EVs account for approximately 3% of new vehicle sales in the United States, but several auto manufacturers have set aggressive goals and sales targets for EVs through the end of the decade.  In fact, auto manufacturers have committed to investing about $330 billion on electrification by 2025.  As the panelists explained, an increase in the use of EVs and the general electrification of vehicles would have significant effects on several industries, including public transportation, ride sharing, delivery, and distribution, and would also impact climate change.

In order to achieve these ambitious goals, stakeholders will need to address numerous concerns, such as employment implications, availability of charging stations, the impact on the electrical grid, proper recycling of batteries, utility company involvement and state and local regulation of the energy market.  With those concerns in mind, the panelists estimated that the electrification of vehicles at the rate desired by many stakeholders could add as many as 2 million jobs by 2030.  For example, workers will be needed for manufacturing, installation, maintenance, and customer management, at minimum.  The panelists also highlighted the infrastructure bill pending in Congress, which provides $7.5 billion designated for electric charging network investments over a 5-year period, but they questioned whether that investment would be enough to achieve the aggressive industry goals.

Partnerships between private companies and utility companies will be useful, as they can share some of the burden and cost of infrastructure improvements and changes to the current electricity billing scheme.  Observed data suggests that substantial investment in EVs could lead to lower electricity utility costs for all consumers, whether or not they actually purchase or lease EVs.

Stakeholders will also need to find a way to bring affordable charging to people’s homes and places of work, where EVs could be charged during periods of consumer downtime.  One idea is for utility companies to provide time-of-use incentives where EV owners could voluntarily charge their vehicles during off-peak hours to reduce the strain on the electric grid and, in turn, lower their own cost of charging.

Regulation of the electric energy market throughout the infrastructure improvement process is also a key issue.  Whereas fossil fuels are regulated substantially at the federal level, electricity is largely regulated by state and local authorities.  Accordingly, proper regulation of the energy market by state and local authorities, and coordination with utility companies, will be crucial to the success of a push toward EVs.

These proposed changes to infrastructure also have implications relating to diversity, equity, and inclusion (DEI).  Having dealt with more than 100 years of habit with fossil fuels, EV stakeholders will need to rethink how they invest in, maintain, and track the effects of the electrification of vehicles on DEI.  Who will be the beneficiaries of new investments in infrastructure?  How will stakeholders account for equity of investment across differences in race, socioeconomic status, and urban versus rural environments?  Should there be statutorily-mandated reporting requirements for utility companies and other stakeholders?  These are all questions that stakeholders will need to tackle.

Although the goal set is ambitious, the panelists laid out some pathways to success and strategies for navigating the necessary changes to current infrastructure that would accommodate the new EV outlook.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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