The Biden administration released plans that will force automakers to embrace electric vehicles by targeting gas powered vehicles in the form of toughest-ever standards for greenhouse gas emissions. This could lead to EVs making up two-thirds of new car sales in US by 2032.
Under the light-duty vehicle standards, the EPA will require an increasingly stringent greenhouse gas standard. By model year 2032 it would result in an industry-wide average target of 82 grams of carbon dioxide created per mile traveled. That would be 56 percent lower than the model year 2026 standard set in 2021.
The transportation sector is the largest U.S. source of GHG emissions, representing 27.2 percent of total GHG emissions.8 Within the transportation sector, light-duty vehicles are the largest contributor, at 57.1 percent, and thus comprise 15.5 percent of total U.S. GHG emissions.
For medium-duty vehicles it is proposing to increase stringency to a target of 275 grams of carbon dioxide per mile by model year 2032, which would represent a 44 percent reduction compared to model year 2026 standard.
Under the tougher standards, the EPA projected EVs could account for 67 percent of new light-duty vehicles and 46 percent of new medium-duty vehicles sales by model year 2032, although this could vary depending upon how automakers choose to meet these standards.
Most major automakers are already racing to accelerate the transition of their vehicle lineups to electric cars. Tougher tailpipe-emissions standards overseas, and the success of EV leader Tesla Inc., have prodded the industry in the direction of battery-powered cars.
Some car companies have even pledged targets similar to those of the Biden administration. In 2021, General Motors Co., Ford Motor Co. and Jeep-maker Stellantis NV jointly voluntarily agreed to target 40-50% of their annual U.S. vehicle sales to be electric by 2030, in line with the administration’s goal at the time.
Since President Biden took office, the number of EV sales has tripled while the number of available models has doubled. There are over 130,000 public chargers across the country – a 40% increase over 2020. The private sector has also committed more than $120 billion in domestic EV and battery investments since President Biden signed the Inflation Reduction Act into law. The new standards proposed today reflect the advancements and investments in clean vehicle manufacturing, which have been accelerated by President Biden’s Investing in America agenda and complement the ongoing transition in the market towards cleaner vehicles.
Car makers globally have earmarked $1.2 trillion toward electrification, and are rapidly rolling out new plug-in models, the group said.
The new standards for light-duty vehicles cover model years 2027 to 2032 and include the country’s most stringent curbs on car pollution to date.
The new emission standards are the latest step in a methodical attempt by Biden’s embrace of electric vehicle and divorce from polluting internal combustion engines. Electric vehicles remain significantly more expensive than ICE vehicles and the EV charging station infrastructure is both unreliable and sparse in placement across the country leading to consumer range anxiety.
The reality is that electric vehicles face a skeptical public that is stalling mass adoption. Why is it the auto consumer so hesitant to embrace the technology of electric vehicles even though it dates back 200 years?
Here is a brief history of the electric vehicle
When was the first electric vehicle invented?
The invention of the first model electric vehicle is attributed to various people. In 1828, the Hungarian priest and physicist Ányos Jedlik invented an early type of electric motor, and created a small model car powered by his new motor. Between 1832 and 1839, Scottish inventor Robert Anderson also invented a crude electric carriage. In 1834, Vermont blacksmith Thomas Davenport built a similar contraption which operated on a short, circular, electrified track
In 1835, Professor Sibrandus Stratingh of Groningen, the Netherlands and his assistant Christopher Becker from Germany also created a small-scale electric car, powered by non-rechargeable primary cells.
But it wasn’t until the 1870s or later that electric cars became practical. Pictured here is an electric vehicle built by an English inventor in 1884.
Photos courtesy of the Smithsonian.
Death of the Electric Vehicle
In 1908 Henry Ford introduced to the world the mass-produced Model T, which was the first vehicle to make gasoline-powered cars widely available and affordable. By 1912, the gasoline car cost only $650, while an electric roadster sold for $1,750. That same year, Charles Kettering introduced the electric starter, eliminating the need for the hand crank and giving rise to more gasoline-powered vehicle sales.
It is ironic that the man many compare to Henry Ford, Elon Musk, has been the person mostly responsible for the rise of the electric vehicle.
GM’s EV1 was an electric car produced by General Motors (GM) from 1996 to 1999. It was one of the first modern electric vehicles to be mass-produced by a major car manufacturer.
The vehicle gained a measure of notoriety with “Who Killed the Electric Car?” The 2006 documentary explored the creation, limited commercialization and subsequent destruction of the battery electric vehicle in the U.S. market, specifically the EV1.
The EV1 was designed from the ground up as an electric car, and it was powered by an AC electric motor that produced up to 137 horsepower. The car’s battery pack consisted of 26 lead-acid batteries, which gave it a range of up to 80 miles on a single charge.
GM’s EV was available only through a lease program, and it was initially offered in California and Arizona. The car was praised for its smooth, quiet ride, and it was well-received by early adopters of electric cars.
As with all innovative products, the EV1 faced some challenges. The limited range and high cost of the car made it less practical for many drivers, and some critics argued that GM didn’t do enough to market the vehicle. In addition, the lease-only model made it difficult for customers to purchase and own the car outright.
Ultimately, GM discontinued production of the EV1 in 1999 and recalled most of the vehicles from leaseholders, citing a lack of demand and high costs. The company’s decision to discontinue the EV1 has been the subject of controversy, with some arguing that it was a missed opportunity to advance the development of electric vehicles.
Toyota Launches Prius
Toyota launched the Prius in Japan in 1997, and it became the world’s first mass-produced hybrid electric vehicle. The Prius was designed to be a fuel-efficient, environmentally friendly car that would help reduce dependence on fossil fuels and lower carbon emissions.
The Prius uses a combination of a gasoline engine and an electric motor, which work together to provide power to the car’s wheels. The electric motor is powered by a battery that is recharged by the gasoline engine and by regenerative braking, which converts some of the car’s kinetic energy into electrical energy and stores it in the battery.
The first-generation Prius was a compact sedan that achieved an impressive fuel economy rating of around 50 miles per gallon. In subsequent years, Toyota expanded the Prius lineup to include larger vehicles like the Prius V wagon and the Prius C compact hatchback.
The Prius has been a commercial success for Toyota, with over 6 million units sold worldwide as of 2021. The car has also helped to popularize hybrid and electric vehicles and has inspired other automakers to develop their own fuel-efficient models.
Today, Toyota continues to produce and improve the Prius, with the latest generation featuring advanced safety features, a sleek design, and even greater fuel efficiency. The Prius remains an important vehicle in the push towards more sustainable transportation options. Yet Toyota has made a series of blunders, embracing fuel cell technology over electric vehicles leading to Toyota’s president and chief executive, Akio Toyoda, stepping down in favor of Koji Sato.
Tesla and the Rise of Musk
Meanwhile, as Toyota was stagnating, Tesla was rising. The two automakers have a history as Toyota was an early investor in Tesla, the American electric vehicle and clean energy company founded in 2003 by a group of engineers in Silicon Valley, and formed a partnership. The alliance between Tesla and Toyota was established in 2010 to “to cooperate on the development of electric vehicles, parts, and production system and engineering support. It did not end well…and it turned out Tesla was just fine wothout it.
The rise of Tesla is often attributed to its charismatic CEO, Elon Musk. Musk is a South African-born entrepreneur and engineer who made his fortune as a co-founder of PayPal, an online payment system. Musk joined Tesla in 2004 as an investor and later became CEO in 2008.
Under Musk’s leadership, Tesla has become a leader in the electric vehicle market, with its Model S sedan and Model X SUV gaining critical acclaim for their range, performance, and style. The company has also made significant strides in the development of clean energy technologies, including solar panels and battery storage systems.
Musk has been known for his bold and often controversial statements, as well as his willingness to take risks in pursuit of his vision for the future of sustainable transportation and energy. Despite facing significant challenges along the way, Musk and Tesla have continued to thrive, with the company’s market value reaching over $1 trillion in 2021.
However, the rise of Tesla and Musk has not been without controversy, with some criticizing the company’s business practices and Musk’s leadership style. Nevertheless, there is no denying the impact that Tesla and Musk have had on the automotive industry and the broader push towards sustainable energy solutions.
The First Wave of EV Charging Companies
ChargePoint, EVgo, Blink, EV Connect, and Greenlots are some of the first wave of electric vehicle (EV) charging companies that emerged in the early 2010s. These companies were founded to help address the need for EV charging infrastructure, as more and more drivers began to switch to electric vehicles.
ChargePoint, founded in 2007, is one of the largest EV charging network providers in the world, with over 115,000 charging ports across 14 countries. The company offers a range of charging solutions for both businesses and individuals, including home chargers, workplace chargers, and public charging stations.
EVgo, founded in 2010, is another major player in the EV charging industry. The company operates over 1,200 public charging stations in the United States, with a focus on fast charging technology that can provide up to 90 miles of range in just 30 minutes.
Blink, founded in 2009, operates a network of EV charging stations across the United States, with over 4,000 charging ports. The company also offers a mobile app that allows users to find and reserve charging stations, as well as manage their charging sessions.
EV Connect, founded in 2009, provides a range of EV charging solutions for businesses and government agencies, including network management software and charging station installation services. The company has worked with a range of clients, from small businesses to major corporations like Amazon and Google.
Greenlots, founded in 2008, is a global provider of EV charging solutions that offers a range of hardware and software products for charging station owners and network operators. The company’s products include charging station management software, payment processing, and energy management solutions.
These first wave EV charging companies played a crucial role in establishing the infrastructure needed to support the growing number of electric vehicles on the road. Today, the EV charging industry continues to evolve and expand, with new companies and technologies emerging to meet the needs of drivers and the changing landscape of transportation. Greenlots and EV Connect have both been acquired by companies looking for EV charging software solutions.
Volkswagen Diesel Emissions Scandal and the Creation of Electrify America
The Volkswagen diesel emissions scandal, also known as “Dieselgate,” was a global controversy that began in September 2015 when the United States Environmental Protection Agency (EPA) issued a notice of violation of the Clean Air Act to Volkswagen Group. The agency accused the German automaker of using software in its diesel engines that allowed them to emit up to 40 times the legal limit of nitrogen oxides (NOx) during normal driving conditions.
The scandal had far-reaching consequences for Volkswagen, including billions of dollars in fines and settlements, a drop in stock price, and damage to its reputation. In response, Volkswagen created a subsidiary called Electrify America in 2016 to help fund and implement a nationwide electric vehicle (EV) charging network in the United States.
Electrify America was established as part of a settlement agreement between Volkswagen and the US government, which required the company to spend $2 billion over a 10-year period on EV infrastructure and education programs. Electrify America is tasked with building and operating a network of fast-charging stations across the country, with a goal of having 800 stations in operation by the end of 2021.
The creation of Electrify America was seen as a positive outcome of the Volkswagen diesel emissions scandal, as it has helped to accelerate the adoption of EVs in the US by addressing one of the main barriers to EV ownership: range anxiety. With a robust network of fast-charging stations, EV drivers can travel longer distances with confidence, and the availability of charging infrastructure helps to overcome concerns about running out of battery power.
The Volkswagen diesel emissions scandal and the creation of Electrify America have had a significant impact on the automotive industry and the transition to sustainable transportation. The scandal has highlighted the importance of environmental regulations and the need for transparency and accountability in the automotive industry, while Electrify America is helping to pave the way for a future where EVs are the norm rather than the exception.
California Standards and ZEV States
California has long been a leader in setting emissions standards for automobiles, and in 1990, the state enacted the Zero Emission Vehicle (ZEV) mandate, which requires a certain percentage of new vehicle sales to be electric or other zero-emission vehicles.
Other states, collectively referred to as ZEV states, have adopted California’s ZEV mandate. The ZEV mandate sets specific targets for automakers to sell a certain percentage of zero-emission vehicles, such as battery electric vehicles (BEVs), fuel cell electric vehicles (FCEVs), and plug-in hybrid electric vehicles (PHEVs), in their fleets. The percentage of ZEV sales required increases each year, with the goal of having all new passenger vehicles sold in the state be zero-emission by 2035.
The ZEV mandate has played a significant role in promoting the adoption of electric vehicles in California and other ZEV states. Automakers have responded to the mandate by developing more electric and other zero-emission vehicles, which has led to greater consumer choice and improved affordability for these vehicles. The mandate has also helped to spur the development of charging and fueling infrastructure for electric and fuel cell vehicles.
In addition to the ZEV mandate, California has also set more stringent emissions standards than those set by the federal government, which has led to a patchwork of emissions regulations across the country. Other states have adopted California’s emissions standards, collectively referred to as the California Air Resources Board (CARB) standards, which require automakers to sell vehicles with lower emissions than the federal government’s standards.
Overall, California’s emissions standards and the ZEV mandate have been successful in promoting the adoption of electric and other zero-emission vehicles, reducing greenhouse gas emissions, and improving air quality. As more states adopt these standards and more automakers develop electric and other zero-emission vehicles, the future of transportation looks increasingly sustainable.
To date, 13 states have adopted the ZEV Program – California, Colorado, Connecticut, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont and Washington.
The Second Wave of EV Charging Companies
Electric vehicles (EVs) are becoming more popular as people seek to reduce their carbon footprint and save money on fuel costs. This has led to a surge in demand for EV charging infrastructure, creating opportunities for companies that specialize in this area.
The first wave of EV charging companies focused primarily on building and installing charging stations. Tho
se companies included ChargePoint, EVgo, and Blink Charging. However, the second wave of EV charging companies is now emerging, focusing on improving the user experience and expanding the range of services offered to EV drivers.
As incentives and rebates for electric vehicle adoption and charging station infrastructure have gained steam, a new wave of EV charging companies have emerged. The numbers are staggering:
- Worldwide investment in the electric vehicle industry in $860 billion
- Global VC investment in electric vehicle startups in 2021 topped $17.8 billion, blowing past the 2020 total of $10.6 billion, according to PitchBook data
- Total current federal ($7.5 billion from IIJA) and utility ($4.7 billion) EV charging incentive commitments total $12.2 billion
- As the electric vehicle (EV) market continues to heat up, automakers are going all in on electrification. Vehicle manufacturers and battery makers plan to invest $860 billion globally by 2030 in the transition to EVs. Nearly a quarter, $210 billion, is expected to be invested in the United States
Overall, the second wave of EV charging companies is focused on cashing in on these incentives and rebates to improving the user experience, expanding the range of services offered, and exploring new business models to make EV charging more accessible and convenient.
IIJA and NEVI
President Biden in November of 2021 signed the Infrastructure Investment and Jobs Act (IIJA) into law, he made the most significant commitment of federal dollars toward electric vehicle charging in our nation’s history. Also called the Bipartisan Infrastructure Law, this legislation includes $7.5 billion to build out a nationwide network of 500,000 electric vehicle chargers. Of these funds, $4.75 billion will be distributed in formula funding to states under the National Electric Vehicle Infrastructure (NEVI) Program, and an additional $2.5 billion will be distributed through a competitive grant program.
The IIJA established the NEVI formula program to provide funding to States to strategically deploy electric vehicle (EV) charging infrastructure and to establish an interconnected network to facilitate data collection, access, and reliability.
The bill immediately played a critical role in advancing electric vehicle charging infrastructure as well as accelerating the adoption of electric vehicles by addressing the issue of “range anxiety,” which has historically been one of the biggest barriers to widespread EV adoption.
What is the trend line in the EV charging industry as a result of NEVI? The number of charge points in the US is poised to grow from about 4 million today to an estimated 35 million in 2030. The electric vehicle supply equipment (EVSE) market could grow from $11 billion today to $119 billion by 2030 at a 27% compound annual growth rate.
EV Adoption Spikes
Electric vehicle adoption has been on the rise in recent years, driven by a combination of factors such as government policies promoting the use of electric cars, improvements in EV technology, and increasing public awareness about the environmental benefits of electric vehicles.
In some countries, EV adoption has spiked dramatically in recent years. For example, Norway has the highest rate of EV adoption in the world, with electric cars accounting for more than half of all new car sales in the country in 2021. This is largely due to strong government incentives and tax breaks for EV owners, as well as a growing network of charging stations across the country.
Other countries that have seen a significant increase in EV adoption include China, the United States, the United Kingdom, and Germany. In China, the government has set ambitious targets for EV adoption, and in 2020, electric cars accounted for around 5% of total car sales in the country. In the United States, EV sales have also been on the rise, with Tesla leading the way as the most popular electric car brand. In the United Kingdom and Germany, government incentives and regulations have helped to drive EV adoption, with electric cars accounting for around 10% of new car sales in both countries in 2021.
The trend towards electric vehicle adoption is expected to continue in the coming years, as more people become aware of the environmental benefits of electric cars, and as governments and automakers invest in EV technology and infrastructure.
Meanwhile, the horse is already out of the barn on this:
- EV volumes generally expected to grow by 25-30% p.a. for the next 5-10 years
- 19% of CA vehicles sold in 2022 were EVs
- Automakers sold 807,180 fully electric vehicles in the U.S. in 2022, a 65% increase from 2021 to 2022:
- 3.2% of all vehicles sold in 2021
- 5.8% of all vehicles sold in 2022
The future is the electric vehicle and that is more and more becoming plain to see.