Contrary to the expectations of electric vehicle bulls, the new 2023 Annual Energy Outlook from the U.S. Energy Information Administration doesn’t expect market dominance for EVs by mid-century.
From mid-single digit adoption in 2020, the modeled reference case projects adoption to only reach the high teens from 2030 to 2050.
Recall, for context, that EIA’s 10-year estimates previously had systematically underestimated renewables’ and gas’ market shares, and by 2016, solar PV penetration was 4,813% more than projected in 2006.
Back to EVs, despite a continual decline in EV prices and an increase in projected driving range, adoption is heavily dependent on gasoline price.
Among the attributes captured in EIA’s model are:
- Cost to drive
- Access to refueling
- Impact of vehicle price
- Effect that availability of vehicle propulsion options has on consumer purchase decisions.
“All of these factors contribute to the attractiveness of EVs to consumers and increases EV deployment relative to internal combustion engine vehicles. We assume Corporate Average Fuel Economy standards result in technological improvements and increased EV adoption because of declining cost and favorable fuel economy credits. The clean vehicle credit in the 2022 Inflation Reduction Act, which varies from $3,750 to $7,500 per vehicle, drives additional EV sales.”
This all sounds positive, but is still hard to square with the expectation that most consumer preferences stay the same for the next 27 years.
The other big X-factor besides the price of gasoline appears to be automated vehicles.
“We assume highly automated vehicles (HAVs), including SAE International automation Levels 4 and 5, enter the ride-hailing or taxi service fleet in 2025, and their adoption will be determined by a fleet operator monthly return on investment calculation.”
“HAVs are only offered in gasoline-powered vehicles because high-power HAV computation systems limit an electric vehicle’s range and would therefore require longer refueling times, reducing daily revenue potential.”
However, it appears to be about in-use automated ride-hailing fleets, rather than secondhand ownership:
“[C]ommercial light-duty fleet vehicles vary in survival rates and duration of in-fleet use, reflected in VMT, before being sold for use as personal vehicles. Fleet vehicles are sold to households for personal use at different rates for passenger cars and light-duty trucks, depending on the fleet type. Vehicles used for ride hailing or taxi service remain in fleet use for the life of the vehicle.”
This author’s interpretation of the EIA report is that the biggest factor is not just the price of gas, but also a presumption that automated ride-hailing vehicles are about to go mainstream, and will change how the U.S. population gets around.
This is an interesting assumption or finding, and one that asserts the continued need for vehicles to become electric, connected, and automated – all-of-the-above – to truly make a zero-emissions fleet realizable by mid-century.
Or they’re just wrong.