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Electric Drive by ’25

How California Can Catalyze Mass Adoption of Electric Vehicles by 2025​

California will need mass consumer adoption of electric vehicles to meet its long-term energy and environmental goals and to improve its economy. In the past few years, major automakers have marketed mainstream electric vehicles, introducing a range of cars and trucks that can “plug in” to the grid for electricity to power the engine, either wholly or in part. California’s electric vehicle industry and its state and local policy makers should continue to create the market and policy conditions necessary to catalyze this mass adoption by 2025, a benchmark year for measuring long-term goals.

Burning fossil fuels to power vehicles contributes to harmful air pollution and exacerbates climate change. Electric vehicles result in significant net emissions reductions compared to fossil-fuel based vehicles over the long term.

Electric vehicles help California meet its clean energy goals. As electric vehicle owners may eventually be able to provide grid services that balance the intermittent energy supply by feeding electricity from the battery into the grid and even the driver’s home.

Electric vehicle adoption in CA offers significant benefits to the national and worldwide electric vehicle auto markets. California accounts for 11 percent of the national market for annual new car sales, as well as more than 20 percent of hybrid vehicle sales in the United States.

Policy Needs

Policy Solutions

Raising Consumer Awareness and Providing Better Access to Information.

Develop a Consistent and Pervasive Outreach Campaign.

Electric Vehicle Industry & Advocates

Develop consistent use of terms and create a simple message promoting electric vehicles.

Examples of confusing technology abbreviations include PEV, BEV, HEV, PHEV, along with terms like “Level 1 Charging” and V2G or “vehicle to grid.” The jargon makes outreach more complicated and may reinforce the perception that the cars are specialty items or confusing to own and operate. The electric vehicle industry could decide on simple and memorable terms to describe the cars and the infrastructure and charging processes and then use them consistently in all marketing materials.

Electric Vehicle Industry & Advocates

Launch an education and outreach campaign and target members of the media, public leaders, and consumers.

The campaign can advertise the benefits of electric vehicles, including the fun of driving them, how they are good for  the economy by using domestic energy and by saving drivers gas money, that they are easy to plug in and drive, and that the driving experience includes better torque, smoothness, less noise, and no gas smell compared to fossil fuel-powered cars.

Electric Vehicle Industry & Advocates

Raise funds to implement the outreach campaign.

While electric vehicle companies have a profit motive to invest in a communication campaign to encourage vehicle purchases, these companies can enlist other stakeholders to raise funds for the campaign. Charging companies, environmental groups advocating for electric vehicles, and companies with clienteles that would respond to the campaign positively or use their facilities for charging may be natural allies in the campaign.

Electric Vehicle Industry & Advocates

Continue to offer opportunities for test driving the vehicles and educate car dealers about them.

Auto manufacturers could boost efforts to have electric vehicles available where potential customers congregate. The driving experience would be a powerful source of persuasion to consumers and would dispel common misperceptions about the vehicles and their performance. Auto manufacturers may want to promote multi-day test drives for customers to learn how the vehicles would charge at home and integrate with their daily routines.

Electric Vehicle Industry & Advocates

Encourage high-profile adoption of the vehicles.

Electric vehicle companies and their advocates could target high-profile individuals and companies to showcase their cars. Companies that may be sympathetic to electric vehicle promotion efforts could feature the cars in their products and services, from Google home page artwork to Mattel toy cars.

Federal, State, & Local Leaders

Hold media events featuring electric vehicles and motivate public officials to drive them.

Federal, state, and local officials can contribute to the outreach campaign and reach a wide audience through media events that feature electric vehicles. Governors, agency heads, and legislators should consider driving electric vehicles to public events and organizing press conferences on electric vehicle infrastructure deployment and sales.

Federal, State, & Local Leaders

Designate a single point of contact in government for electric vehicle outreach efforts.

State and local leaders could help facilitate communications, outreach, and regulatory and legislative coordination by empowering a single point of contact within government who can oversee all aspects of electric vehicle information and deployment for the public. This electric vehicle “czar” can help ensure that public officials showcase electric vehicles and address the challenges to consumer adoption.

Appealing to a Broader Market.

Develop and Promote Incentives for Electric Vehicle Purchase.

Federal Leaders

Continue and strengthen funding for battery research and development that can benefit electric vehicles.

The federal government could continue its efforts through the Department of Energy loan and grant programs to fund or finance innovative battery research. Improved battery technologies will benefit not just electric vehicles but the effort to integrate variable renewable energy, provide backup power in case of emergency outages, and reduce the need for dirtier peak power production with the enhanced ability to store electricity.

Federal Leaders

Clarify the technical and cost requirements necessary to enable “vehicle-to-grid” services provided by electric vehicle owners.

The federal government, through the Federal Energy Regulatory Commission (FERC), could ensure that the interstate electricity market allows electric vehicle owners to receive payments for grid services provided by their vehicles (described as “smart charging” or “vehicle-to-grid”). In this scenario, vehicle owners would agree to allow utilities to regulate the rate and time of their battery charging. In some cases, if vehicle manufacturers enable it, the batteries can provide electricity back to the grid.

State Leaders

Extend the AB 118 electric vehicle rebate program beyond 2015.

AB 118 provides rebates for electric vehicle car purchases, manufacturing grants, and charging infrastructure programs but will expire in 2015. The State Legislature should consider extending this program to at least 2020 to ensure adequate support for the nascent electric vehicle market.

State Leaders

Create tax incentives and lower fees and insurance payments for electric vehicle owners.

State leaders can encourage electric vehicle purchases through targeted tax incentives and similar experimentation. For example, state income tax credits for vehicle purchases might encourage more purchases, while reducing the sales tax rate for electric vehicles would offset the higher upfront cost of purchasing them.

State Leaders

Work with utilities and stakeholders to promote adoption of electric vehicle charging rates by owners.

California’s investor-owned utilities offer two types of special rates for home and business owners to charge their electric vehicles at less expensive rates. The “whole-home” option allows all electrical usage in the building, including non-electric vehicle load, on a “time-of-use” rate via the primary meter. A second, more complicated option involves a separate meter that allows customers to keep non-vehicle uses on their standard rate but enables electric vehicle charging to switch to the time-of-use rates on a second meter.

State Leaders

Facilitate distribution of revenues from low carbon fuel standard credit sales to electric vehicle owners.

Electric utilities are eligible to receive low carbon fuel standard credits based on the amount of electricity they sell to residential customers for transportation via vehicle charging in their service territory. Other entities, such as public charging to participate as well in this program. Fuel suppliers regulated under the state’s low carbon fuel standard program can then purchase these credits for cash.

State Leaders

Work with vehicle manufacturers and utilities to develop separate battery financing programs.

On-bill financing represents one promising option for a financing arrangement, where a party (or consortium) would provide the capital for financing the battery purchase and then then the customer would repay the loan via monthly payments. The resulting payments could potentially be less than the overall monthly fuel savings.

State Leaders

Continue and expand programs to fund battery research and deployment.

The California Energy Commission has funded battery research for transportation through various grant programs. Funding came from the American Recovery and Reinvestment Act (ARRA), AB 118 revenue, and a public goods charge on electricity bills, which expired in 2011 and currently operates through the California Public Utility Commission’s Electric Program Investment Charge (EPIC). The Legislature could re-authorize this charge in order to continue and strengthen California’s battery research programs and ensure that they remain competitive.

State Leaders

Develop alternatives to the gas tax to fund infrastructure investments.

State governments fund transportation infrastructure investments in part from gas tax revenues, which are currently collected on a fixed, per gallon basis. However, inflation and deferred maintenance have squeezed transportations budgets, leading to declining road and highway quality. Consumers that purchase more fuel-efficient and electric and hybrid vehicles further diminish gas tax revenue. As a result, infrastructure for electric vehicles and other cars and trucks will decline in quality and safety unless policy makers develop an alternative, more stable source of funding.

Electric Vehicle Industry, Electric Utilities & Grid Operators

Develop consumer-financing packages to facilitate electric vehicle purchases.

Auto manufacturers may increase sales by partnering with utilities to offer discounts and specials. For example, auto manufacturers or electric utilities  set of miles free to charge. Similarly, auto manufacturers could work with utilities to facilitate on-bill financing of the battery costs.

Electric Vehicle Industry, Electric Utilities & Grid Operators

Develop rules and tariffs to support electric vehicle grid services.

Vehicle-to-grid services may provide an attractive revenue stream for electric vehicle owners. The California Public Utilities Commission and California Independent System Operator, which operates the majority of the state’s transmission system, could develop tariffs and appropriate guidelines to compensate vehicle owners for the grid services provided by the vehicle.

Electric Vehicle Industry, Electric Utilities & Grid Operators

Purchase used electric vehicle batteries for grid operations and for non-utility uses.

Electric utilities and other entities could provide an important market for purchasing electric vehicle batteries that no longer have sufficient life left for vehicle applications. Often these batteries still possess enough capacity for other applications, and utilities can use them as bulk energy storage at key parts of the transmission, distribution, and generation systems. The CPUC and electric utilities should consider developing programs to facilitate this market and to support research on the best use of these batteries, such as to support home solar energy storage.

Developing an Adequate Charging Infrastructure.

Coordinate and Offer Incentives for Deployment of Charging Facilities.

Federal Leaders

Develop favorable tax policies for businesses that install workplace and multi-unit building charging stations.

The federal government could provide tax breaks to businesses that make these investments. Owners of office buildings and other work sites, as well as landlords of multi-unit buildings, may not have an incentive to install charging stations for their tenants and employees. However, they will be more likely to place them in their buildings’ parking lots if the state offered them tax incentives for installing the stations.

Federal Leaders

Work with industry stakeholders to promote uniform rules and standards related to charging infrastructure.

The United States and many individual states have a patchwork of utility regulations affecting charging infrastructure. Federal leaders could work with stakeholder organizations to standardize these regulations with respect to electric vehicle charging. Federal leaders could also work with manufacturers to develop standards for interoperability among charging infrastructure providers.

Federal Leaders

Encourage lenders to finance electric vehicle infrastructure deployment at low-cost rates.

Federal leaders could explore options, such as tax breaks, for encouraging lending institutions to make low-cost loans available to electric vehicle charging companies. Consumers will be more motivated to purchase the vehicles if low-cost loans increase the availability of charging stations.

State Leaders

Develop a statewide guidance document on charging infrastructure priorities.

The Governor’s Office of Planning and Research or the California Energy Commission may be logical entities, among others in state government, to develop a document outlining state priorities for deploying the charging infrastructure, including best practices for installation and permitting, priority types of charging sites, and utility rules and tariffs. Agency staff could draft the document in consultation with stakeholders and ensure that they update the document regularly to reflect  changing policy and technology conditions.

State Leaders

Streamline and standardize permitting for charging infrastructure.

The Legislature could help standardize and streamline the permitting process for deploying charging infrastructure in both residential and public/commercial contexts. Charing companies spend significant resources navigating multiple permitting regimes among various local governments. Policy makers may therefore want to develop a more certain and consistent process to expedite this deployment.

State Leaders

Continue to work with industry to collect and analyze data on charging patterns and impacts.

The California Energy Commission and utilities, per California Public Utilities Commission directive, are collecting data and information on where the optimal points of charging occur. These entities could use the data to inform the statewide guidance document on charging infrastructure and help state and local governments streamline permitting in the most effective areas for deployment.

State Leaders

Consider developing targets for parking lot owners to install a minimum number of charging stations.

The state (and local governments) could develop a policy to require charging stations for parking lots of a certain minimum size to ensure electric vehicle owners have equal access to fuel based on usage patterns and informed cost/benefit analysis. Policy makers could also develop options for multiple parking lot owners to share charging infrastructure with their customers or encourage use of mobile charging technologies that do not require permanent installations.

State Leaders

Ensure that utilities develop consistent standards for grid access for electric vehicle supply equipment.

Charging companies face myriad utility standards for installing their technologies and interconnecting to the grid. The state, through the California Public Utilities Commission, could develop consistent standards to facilitate the deployment and usage of electric vehicle charging technology in homes and businesses.

State Leaders

Ensure that new homes and business are pre-wired for electric vehicle charging.

The state, possibly through regulations by the California Energy Commission, should consider requiring new homes and businesses to pre-wire for vehicle charging. The wiring would reduce the cost of adding power capability beyond Level 1 charging to already-built homes and businesses.

State Leaders

Coordinate ongoing maintenance and operation of charging infrastructure and provide database for charging customers.

With the diversity of charging companies and technologies, policy makers have an interest in ensuring that public or private entities continue to maintain and operate the network of charging sites already in operation over the long term. Policy makers can also help this process by creating a real-time database to track the status and availability of charging options for electric vehicle drivers.

Charging Companies

Develop common standard and communications protocols.

Charging companies could work with policy makers to develop common interoperability standards, as presently being addressed by the National Electrical Manufacturers Association (NEMA), and to standardize utility processes and best practices governing installation of the charging technologies.

Charging Companies

Ensure transparent fueling prices for consumers.

Consumers may be deterred by the prospect of a complex and confusing pricing system for charging vehicles. Charging companies could coordinate to ensure that they have a simple, effective, and transparent method of communicating charging costs to vehicle owners.

“If I’m a grid operator, and I have 50 percent renewables on-line, giving me a few million EVs will make me happy. The opportunity for that is important. So we can’t just think about the consumer and the car.”

Eric Woychik, Itron