“We can only see a short distance ahead, but we can see plenty there that needs to be done.”
― Alan Turing
Every day, the utility industry is moving deeper into the energy transition. Its an exciting time for the industry, but as Mr. Turing notes, there is still work to be done. Nowhere is this more evident than in the growth of electric vehicles (EVs), even as the massive growth of EVs continues as noted in Figure 1 below.
Figure 1. US Light-Duty Plug-In Vehicle Sales By Type. (Source: US DoE.)
This growth continues to accelerate. Cox Automotive forecasts that EV sales in the US will surpass one million vehicles in 2023.
Additionally, The US federal government is providing incentives that will continue to drive the growth of EV sales. The Inflation Reduction Act, or IRA, provided credits of up to $7,500 for electric vehicle purchases if they’re assembled in North America and if their batteries are also built in North America and if they meet sourcing requirements for lithium and other critical minerals. The federal government is also funding the building of a national network of 500,000 public EV charging stations as part of the Biden administration’s goal of reducing national greenhouse gas emissions by 50–52% by 2030.
EVs are also emerging as a potential tool in the providing grid resiliency and back-up power with V2G (Vehicle-to-Grid) and V2X (Vehicle-to-Everything) capabilities. V2G enables bi-directional charging and can be part of a demand response program, ensuring greater reliability and resiliency during peak events. V2X, on the other hand, can provide charging for homes or business during outages.
So, clearly there are many benefits with the growth of EVs, but are there any downsides?
Looking at this holistically, one can argue that while EVs are part of our future, they are not a panacea. Consider the impact on the grid and the costs to modernize the grid for the growth in electrification of transportation. The classic example is that if all of the residents of a cul-de-sac came more from work and plugged in their EVs for charging at the same time the transformer serving these homes would fail. The response, of course, is that advances like smart charging and rate incentives will be a hedge against this type of cul-de-sac catastrophe. But as EVs scale along with overall electrification (cooking heating, etc.), load shifting and other initiatives will run into limits.
The cost estimates associated with modernizing the grid for the electrification movement range from the tens of billions into the trillions, depending on what is included. It is reasonable to ask, who is going to pay for this?
A second consideration is for the raw materials needs for EV batteries, and this challenge is two-fold. First is the availability of sufficient rare earth minerals to meet the goals and mandates for EV growth in the coming years. Forbes reports that meeting the Biden Administration’s EV goals will require 10x the rear earth minerals that are currently available in the US. Where will these resources come from? And as the laws of economics dictate, increases in demand will drive up prices.
Also of note is that many of the rare earth minerals for EV batteries are in countries where child labor and slave labor are being deployed to meet growing demand. Does EV growth that will help reduce the carbon footprint (perhaps minimally when considering the carbon footprint of the entire EV supply chain) justify horrendous labor practices that are lining the pockets of evil dictators and communists?
A final thought on the “con” side is around the social dynamics of EVs. The vast majority of EVs are purchased by upper-middle and upper classes. With the various incentives subsidizing these purchases, can this be viewed as a societal inequity and, again, does carbon reduction justify this societal cost?
Each of the topics raised here arguably justify a deeper dive. However, the point being made here is that jumping to the “EVs = good” conclusion without considering both the pros and the cons does not serve the interests of moving deeper into a successful energy transition.