11.4 million EVs expected to be on U.S roads by 2025; will the grid be ready?

Impactos de la carga de los vehículos eléctricos según norma ISO 2015 (GWh y%) / EV Load Impacts by ISO, 2015 (GWh and %)

The electrification of passenger vehicles has become increasingly a part of decarbonization conversations in energy policy and business. Prior to 2010, Energy Information Administration (EIA) estimated a total of 57,000 EVs in use. Between 2010 and 2015, EV sales surpassed 400,000 vehicles with a value of $15 billion.

With a broader range of market options and a growing infrastructure, the passenger electric vehicles (EVs) market is projected to have 11.4 million EVs on the road, with cumulative sales of 12 million EVs and a value of over $400 billion by 2025, says one of the latest reports from GTM Research.

 

To-date around $3 billion of federal incentives have supported the growth of the EV market. Many states have also offered their own incentives. Furthermore, EV adoption is supported by consumer economics and a growing sentiment that EVs can support decarbonization. “A price and energy cost analysis of conventional, hybrid and electric vehicles illustrates that the EV has the lowest lifetime cost even in a low oil price environment,” says Timotej Gavrilovic, Consultant at GTM Research and author of the report.

However, questions around the impact of adoption on the grid, and how in turn, that will affect consumer trust, still remain. “The impact of EVs on the electricity grid, estimated at 1.4 TWh in 2015, depends on how quickly consumers and the utility infrastructure can adapt to this growing market,” Gavrilovic explains. Policy, incentives and overall renewables penetration present variables in different U.S. geographies and their respective grid operations. Gavrilovic adds that, “California and Hawaii are among the first geographies facing the most challenges resulting from renewable and EV penetration. These challenges led them to increase their efforts to innovate in demand side management (DSM). EVs are just one of many possible technological solutions in the DSM toolbox that can support overall renewable and decarbonization goals.”

This market growth will have a significant impact to existing and planned grid infrastructure, and will require action from regulators, planners, and operators. This creates opportunities for existing and new market players to provide integrated solutions for the EV driver, electric utility, wholesale energy market and aggregators. In GTM Research’s recent report, The Impact of Electric Vehicles on the Grid: Customer Adoption, Grid Load and Outlook, these complexities are discussed and analyzed, to ultimately provide a perspective on how customer adoption and grid load will unfold. The report provides an analytical toolkit for dissecting the factors that will affect the EV market through a series of data analysis and modelling exercises, to provide a comprehensive understanding of EV load and demand both in specific ISO/RTO territories and across the U.S.