Electric vehicle ownership in the United States is growing at a rapid pace. In 2022, 8 percent of new vehicle sales domestically were electric cars, while they made up 14 percent worldwide. Electric vehicles are even more popular in the EU and China, both of which had over 20 percent of new vehicles running on electric power in 2022. Electric vehicles are often purported to be a massive help to climate change, as traditional vehicle exhaust accounts for about a tenth of all CO2 emissions. As we recently covered American Car Culture, cars are one of the largest industries in the country. Yet, serious doubts about the future of EVs remain.
Are electric vehicles the future or a fantasy?
Electric vehicles, or EVs, are not new. In fact, some of the first cars were electric, but were ultimately limited by the times and quickly overtaken by more robust designs and access to cheap oil. Electric vehicle sales remained virtually inconsequential for around a century, before finally making a reappearance in the 2010s.
Today, EVs are still significantly more expensive than gas cars, but the price is declining. In 2023, an electric car will cost just 10 percent more on average than a new gas-powered car. This cost disparity is only as narrow as it is due to certain subsidies from the government, incentivizing people to buy electric. China has huge production subsidies for EV, making the US and EU wary that China could control the world EV market.
EVs have many supporters, and many critics. Electric vehicles have become political in the United States. Many people who are skeptical of climate change or its severity have become openly hostile towards EVs, particularly the subsidies that help the industry massively. The Biden administration contends that it is just trying to stay competitive in the global market, that there is demand for EVs, and that the US can be a production hub.
The other main critique of EVs, particularly in the United States, is a lack of adequate infrastructure. One can find gas stations on virtually any street corner, but charging infrastructure– particularly with fast-charging ports – is just not there yet. A fast charging port can cost up to $175,000, and still takes much longer than a stop at the pump.
Critics rightfully point out that an EV would have a tough time on a road trip, with almost all EV chargers in cities. The average EV in 2023 has a range of just 219 miles, roughly the same as a drive to Boston from New York. An EV is not as convenient when attempting to make it across the country. Some states have very few charging points, and federal money hoping to solve the problem so far hasn’t gotten anywhere in rural areas.
The technology for long-distance electric vehicles is just not here yet. Even more so for electric cargo carriers. Road freight accounts for 30 percent of all transportation emissions, but so far there is no market-scale EV suitable to dislodge diesel powered big rigs. There have been some impressive advancements in electric semi-trucks, but range is still severely limited on most models and the capital cost is prohibitive in a competitive market.
Supporters of EVs will point out that not every car needs to be able to travel great distances, and that most of the time people simply use a car to get across town. The average commute to work in the U.S. is 41 miles each day. An average EV in 2023 could make that trip five times without recharging. If someone is just using their vehicle for commuting and errands, there isn’t really a need for fast charging, they can simply charge it at home overnight. Indeed, powering an electric car is far cheaper than a gas one.
The average cost of electricity in August 2023 in the US was about 16 cents per kWh for residential. For a common 75 kWh electric battery, it would cost $12 at that price to get a full charge. Different 75 kWh batteries have different ranges, but assuming it gets 250 miles, it will cost a little less than 5 cents per mile to drive an EV (not including maintenance). The average American car from 2020 gets 25.4 miles to the gallon and the average price of gas is currently $3.342 per gallon. To drive 250 miles, one would need a little less than 10 gallons on an average car, which would cost $32.90. Overall cost would be a bit more than 13 cents per mile (not including maintenance) for a non-electric car.
EVs are still range limited, but Americans love cars enough that it might not matter. As discussed in the American Car Culture policy blog, there are 1.79 cars per household in the U.S. as of 2019, and the figure keeps rising. If a household has two cars, it doesn’t matter if one of them has a range of just a couple hundred miles, because another car is available. It might even become an economical option to own an EV.
As of now, electric cars are still primarily for the wealthy. In Norway, the world’s largest adopter of electric vehicles, hefty subsidies have benefitted the affluent more and increased inequality. Electric cars are closing in on competitive pricing with traditional vehicles, but still cost significantly more.The traditional pickup market has been without any real electric competition until the recent Ford Lightning, a well-reviewed car that is designed to mimic a regular F-150. The price, however, is still not the same. A new 2024 standard Lightning costs 36 percent higher than a standard F-150.
There is also the question of how green EVs are in reality. EVs have far higher manufacturing emissions than traditional cars, mostly due to the battery. EV batteries require huge amounts of materials including lithium and graphite. As mentioned in a previous policy blog, transitioning to renewable energy sources and electric vehicles will require a huge increase in mining and resource extraction. Much of the world’s production of these vital resources also goes through China, giving them power and economic leverage.
Electric vehicles also typically charge from the regular electric grid, meaning they use energy generated from non-renewable sources, contributing to emissions. That being said, EVs still generate significantly fewer lifecycle emissions, according to the EPA. EVs are not carbon negative or even carbon neutral, but they are less carbon intensive. Plugging into the grid also adds considerable demand, which in certain regions can lead to black or brown outs. This has led to concerns for people not being able to charge even at their own homes or worse, proposals that would allow the grid to suck power out of people’s vehicles to meet peak demand.
In conclusion, EVs can help reduce emissions, cost less to refuel, and are projected to approach the price of traditional cars as technology improves and subsidies continue. They also have much higher capital cost, are more resource intensive, are limited in distance capabilities, and lack adequate infrastructure in much of the United States. Some of the disadvantages may fall away as innovation improves, but things could also get much worse in the event of any kind of trade dispute or conflict with China. The advantages of EVs are great enough that demand will continue to grow, but it could take multiple decades to truly overtake the traditional car in sales and overall adaptability.
Written by Owen Rogers, Public Policy Intern
The Alliance for Innovation and Infrastructure (Aii) is an independent, national research and educational organization. An innovative think tank, Aii explores the intersection of economics, law, and public policy in the areas of climate, damage prevention, energy, infrastructure, innovation, technology, and transportation.