State of EVs in CA
April Bolduc, S Curve Strategies
With 40% of California’s greenhouse gas emissions coming from transportation, the state has long been in the lead over other U.S. states for electric vehicle (EV) adoption due to its strong emission reduction climate policies. The 367,000 EV sales in California are just over 50% of nation's total sales -- 768,000. Over the last six months, there have been strong market indicators that tell us billions of dollars will be injected into the country’s EV industry in the coming years.
A 2017 analysis by Bloomberg New Energy Finance says, “EVs could account for 54% of all new cars sold by 2040,” up from the 35% they previously forecasted. This is due to EVs being cheaper to buy than internal combustion engines by 2025, battery prices dropping by 70% by 2030, and 8 million barrels of fuel per day being displaced by EVs by 2040. As a result, global electricity consumption will increase by 5%, which is one of the reasons California utilities have been moving swiftly toward grid preparation for transportation electrification.
U.S. Market Indicators
With China’s October 2017 announcement that they plan to do away with diesel and gasoline cars by 2030, major U.S. car manufacturers stood at attention since this is where a majority of their cars are sold. While manufacturer commitments to electrification made headlines, China further solidified its stance by announcing resumption of permits in 2018 for EV manufactures not currently building there – like Ford and Tesla.
During this time, U.S. carmaker announcements include:
- GM will eventually: 1) stop producing internal combustion engines, 2) add two 2018 EV models to their Volt plug-in hybrid and Bolt all-electric cars – Bolt was named this year’s Motor Trend’s Car of the Year, and the North American Car of the Year, and 3) by 2023 have 20 EV models.
- Ford’s CEO says their “Team Edison” has been tasked to develop all-electric cars, and they will: 1) reduce their gasoline cars, 2) shift to electric and autonomous, and 3) are on track to produce 13 EVs over the next 5 years.
- Mercedes will invest $1 billion in its 20-year-old Alabama plant to build electric cars.
- Tesla plans to shake up the shipping industry by significantly reducing the cost of transporting goods with a 500-mile range semi-truck and a new roadster that will go 0-60 in less than 2 seconds.
- Buffet’s Berkshire Hathaway-backed BYD electric truck, bus and car company will join GM and Ford in Ontario, Canada by opening a manufacturing plant in 2018. The cross-border location was chosen due to the friendlier business climate for Chinese owned companies he says.
When you consider it costs about $1 billion to bring a new vehicle to market, these were major investment announcements.
California EV Adoption
In 2012, California Governor Jerry Brown issued an Executive Order directing state government to help accelerate the market for zero-emission vehicles (ZEVs). It included the goal to have 1.5 million ZEVs on California roads by 2025, and installing infrastructure to support 1 million ZEVs by 2020. He developed the “ZEV Action Plan” to provide specific actions the state government would take to meet the Executive Order milestones.
In January 2018, Governor Brown increased that number to 5 million ZEVs by 2030, and as part of this plan included $2.5 billion in rebate and charging infrastructure investments to do so. Organizations throughout the state have been working toward this goal to provide driver incentives, education on the benefits of driving electric and install charging. With the state’s EV sales currently at approximately 335,000, California will need to see exponential growth in the next eight years to accomplish the Governor’s goals.
As stated by California Public Utilities Commissioner Michael Picker, “No one will be able to achieve the state’s greenhouse gas emission reduction goals by going 100% renewable alone, the state must electrify transportation to do so.”
Today California has 14,200 public charging stations and 42 EV models available. There is much work taking place to increase adoption by utilities, the California Public Utilities Commission, California Energy Commission and California Air Resources Board. They include:
- San Diego Gas & Electric is installing 3,500 charging stations at 350 workplaces, apartments and condos. This is the only program that has a first-of-its kind rate – a day-ahead, hourly price to incentivize drivers to charge their cars when renewable energy is abundant on the grid.
- Southern California Edison is now installing infrastructure to support 1,500 charges at 150 workplaces, multifamily communities and destination centers, along with a customer rebate to purchase charging equipment.
- PG&E is installing 7,500 charging stations at 750 workplaces and multifamily locations.
- As part of a mitigation effort for the energy crisis, the state required NRG to install charging stations instead of paying the state back in cash – 200 DC Fast Chargers and infrastructure installed to support 10,000 private chargers as part of their EVgo program.
- As part of the mitigation effort for Volkwagen diesel cars, the California Air Resources Board approved the first of four Electrify America Plans by the automaker to invest $800 million over 10 years in charging infrastructure and public outreach. The first phase includes:
- $120 million for 350 charging stations and 50 fast chargers in six: San Diego, Los Angeles, Sacramento, San Francisco, San Jose and Fresno.
- A $20 million multi-media, multi-stage ZEV Awareness Program.
- $44 million on various ZEV access projects in its first “Green City,” which it proposes to be Sacramento.
- The Governor’s Drive the Dream effort challenges companies throughout the state to offer workplace charging to their employees and hosts a bi-annual meeting of CEOs.
- Up to $2,500 cash rebate to EV drivers -- $2,500 for an all-electric car and $1,500 for a plug-in hybrid.
- Special stickers are issued to EV drivers allowing them to drive in the carpool lane with just one person.
- $7,500 Federal Tax Credit, under consideration to be discontinued.
- EV time-of-use rates offered by the utilities to provide EV drivers with the lowest price electricity when they program their cars to charge at night.
- The California Air Resources Board’s Low Carbon Fuel Standard credit funds are being passed on to EV drivers as utility bill credits or EV purchase rebates.
Clean Air Initiatives
Governor Brown has since signed numerous bills into legislation to reduce greenhouse gas emissions and increase the use of renewable energy. In 2016, Governor Brown signed Senate Bill 32 to reduce petroleum use in California by up to 50% by 2030, reduce greenhouse gas emissions 40% below 1990 levels by 2030, as well as an 80% reduction below 1990 levels by 2050. Auto manufacturers not able to meet these goals are unable to sell their cars in the state. Because of these high climate standards for vehicles, some EV models have been developed purely as compliance cars and are not available in states outside of California – like the Fiat 500e and Kia Soul EV.
Electric utilities are moving into the transportation electrification space in a big way to exponentially increase the amount of EV programs they can offer their customers. Senate Bill 350, the Clean Energy and Pollution Reduction Act of 2015, established widespread electrification of the transportation sector as a policy to meet the state’s 2030 and 2050 climate goals. It required the California Public Utilities Commission to direct utilities to submit programs to increase ZEV adoption.
Utilities look at transportation electrification as a way to increase their load factor, which they hope will in turn put downward pressure on rates that are already some of the highest in the country. Utilities also receive a return on such investments for shareholders, in a state where building new power plant investments will never be permitted for approval.
To meet this directive by the Commission, in January 2017, the three investor-owned utilities filed transportation electrification programs totaling more than $1 billion, and a proposed decision is expected in December 2017. These projects include charging for homes, medium-duty and heavy-duty trucks, Park-and-Rides, rideshare (i.e. Uber and Lyft), shuttle buses and mass transit.
New State Legislation
For his last year in office, Governor Brown continues to sign legislation that will reduce greenhouse gas emissions. While his most recent announcement to reach 5 million zero emission vehicles by 2030 has been one of his boldest, in October 2017, he signed 12 new Senate Bills into legislation, all aimed at using transportation electrification. In summary, they:
- Authorize municipalities to dedicate on-street parking spaces on public streets for EVs.
- Authorize a pilot program to install charging at state parks, beaches and schools – and requires the California Public Utilities Commission to work with its utilities to implement these programs.
- Require 50% of the state’s own light duty fleet to be ZEV by 2025, an increase from 25%.
- Allow some light-duty trucks to qualify as replacement vehicles if efficiency standards are met.
- Extend amount of years to allow plug-ins in the carpool lane.
- Extend income caps for the $2,500 EV state cash rebate.
- Codify the clean-air program that benefits low income residents by helping them replace their cars with EVs by offering them an additional $2,000 to the state cash rebate.
- Require 15% of heavy-duty vehicles purchased by the state to be ZEV by 2025 and 30% ZEV by 2030.
- Extend funding for heavy-duty trucks as part of California’s Clean Truck, Bus and Off-Road Vehicle program.
- Expand smog check exemption to cars 8 years old or newer and increase smog fee.
- Add irrigation and water conveyance engines to qualify for air quality incentives.
EVs in San Diego Region
The City of San Diego has been recognized for numerous efforts in the cleantech space, like having the most solar rooftops, the most electric cars, has a utility with one of the cleanest grids at 43% renewable energy and no coal, has hosted the world’s largest National Drive Electric Week EV ride-and-drive event for two years in a row, and among others was the named one of the smartest cities as a documentary by National Geographic featured.
While 40% of California’s greenhouse gas emissions come from transportation, in San Diego it’s even higher at 55%. This is due to the fact that the city doesn’t have a large industrial sector. If the state reaches its goal of 1.5 million EVs on its roads by 2025, the San Diego region could see 150,000 of these cars on its own roads, this is because this region is about 10% of the state. There is no doubt this would have a positive impact by reducing vehicle emissions.
The City of San Diego, like many other cities in the region, has developed a Climate Action Plan with a roadmap on how the City will reduce their greenhouse gas emissions and get to 100% renewable energy. As one way to accomplish this they are exploring Community Choice Aggregation, where the City has the option to purchase its own power vs. having the utility procure it for them – customers will still be billed and provided customer service by the utility. Woven throughout this Climate Action Plan are ways to increase zero-emission transportation within the City’s own fleet, as well as how to help their employees, residents and businesses do the same thing.
The City has long been a supporter of transportation electrification. They worked with San Diego Gas & Electric to bring the first all-electric car sharing program – Car2Go by Daimler – to San Diego, and while the company eventually left the region due to lack of public charging for their cars they continued to support charging companies like the utility, EVgo, Car Charging Group and others to increase public installation. In February 2017, San Diego Mayor Kevin Faulconer announced a California Energy Commission grant of $500,000 to the City to double the amount of public charging on City-owned land like parks, beaches and libraries.
Most recently, San Diego councilmembers (most of which drive electric cars) gave a unanimous vote to have more than 150 charging stations installed at City facilities for their fleet and employees as part of the utility’s Power Your Drive EV charging station installation program.
Role of the Utility
San Diego Gas & Electric, for example, is charged with how to fuel the increasing adoption of the region’s electric cars without having to build new power plants, and at the same time help customers take advantage of renewable energy to fuel their cars. The utility’s Power Your Drive EV charging station program will install 3,500 chargers at 350 apartments, condos and workplaces. With 50% of the region living in apartments and condos, residents will need to see a strong penetration here if half of drivers are to make the switch to electric.
The most important feature of the program is its day-ahead hourly rate that for the first time will allow EV driver to take advantage of lower prices in the middle of the day when renewable energy is plentiful. allows drivers to set a maximum price per kilowatt hour, and the charger will turn on and off throughout the day giving the car the electricity it needs without having the driver pay more than they prefer.
San Diego region currently has about 30,000 EVs on its roads and about 1,700 public chargers. Studies show that a majority of EV drivers charging takes place at home, which is one reason utilities are focusing their charging efforts in locations like home and work where EVs are parked the longest. Due to a ruling by the California Public Utilities Commission utilities in the state are not allowed to own and operate public chargers, only private.
In addition to charging station programs, San Diego Gas & Electric also provides:
- EV time-of-use rates for single family homes, where drivers program their cars to charge during the cheapest time of night.
- EV Climate Credit provides a customer bill credit of $200 per year to EV drivers.
- A special app to locate the best EV deals in the San Diego region by EV dealerships.
- A $1,000 rebate to teachers and first responders looking to purchase or lease an electric car.
- A partnership with Nissan Leaf and BMW i3 to take $10,000 off the purchase or lease of one of their all-electric cars.
- An online electric car guide to help make your EV buying decision the best one for your needs.