Dive Brief:

• Alternative light-duty vehicles will number 14 million by 2040, according to analysis released yesterday by the U.S. Energy Information Administration (EIA).
• Analysis of the EIA’s Annual Energy Outlook 2016 reference case projects that show by 2025, full zero-emission vehicles (ZEV) and transitional ZEVs will make up 6% of national light-duty vehicle sales and about 2% of the total light-duty vehicle stock.
• Adoption is being pushed by California's adoption of a ZEV program that EIA expects to increase sales of electric, plug-in hybrid, and other alternative light-duty vehicles throughout the United States. The program affects model 2018 vehicles and later, and would require automakers to earn credits for alternative-fueled vehicles based on a percentage of their sales in California.

Dive Insight:

While full penetration of electric vehicles is a long way off, utilities are eyeing EV charging stations as a way to boost grid resiliency. A path to cleaner transportation spells opportunities for utilities down the road looking to integrate distributed energy resources. 

California's economy is large enough to push automakers to adopt new standards nationally. Nine states have also adopted its ZEV program. Those states, which include Connecticut, Maine, Massachusetts, Rhode Island, Vermont, New Jersey, New York, Maryland, and Oregon, accounted for more than a quarter of U.S. sales of light duty vehicles in 2015.

EIA said that with the increased stock, "light-duty vehicles are projected to account for about half a percent of national electricity demand by 2025." After full implementation of the program in 2025, EIA projects market penetration and energy consumption for electric, plug-in hybrid, hydrogen, and other alternative vehicles to continue to grow through 2040.

The ZEV program covers several types of vehicles with different credit values for each, including full zero-emission vehicles, such as battery-only electric or hydrogen fuel cell vehicles, transitional ZEVs, like plug-in hybrid electrics, and others that may use some gasoline, diesel or compressed natural gas. The required credits are set as a percentage of an automaker’s conventional light-duty vehicle sales, beginning at 4.5% for model year 2018 sales. By 2025, the requirement increases to 22%, and full ZEVs must make up 16% of the required credits.

California leads the country in electric vehicle adoption, and the continued push towards plug-in vehicles means both new demand and a potential distributed resource for utilities.

California's three investor-owned utilities have proposed tens of millions in spending on charging stations, and Pacific Gas and Electric has proposed the most ambitious installation program in the nation.

Over the summer, the federal government announced a plan to accelerate the adoption of electric vehicles, including making available up to $4.5 billion in loan guarantees and inviting applications to support the commercial-scale deployment of charging infrastructure.