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Economic Impact Study Finds Grid-Enabled Vehicle Policies in Electrification Coalition Roadmap Would Result in Substantial Economic Benefit for US

Effects of Electrification Coalition Policies. Click to enlarge.

The Electrification Coalition (EC) has released a long-term macroeconomic analysis of the policy proposals put forward in its November 2009 Electrification Roadmap (earlier post). The Roadmap proposes completely transforming the US light-duty vehicle fleet into one in which grid-enabled mobility (grid-enabled vehicles, GEV) is the new conventional standard. By 2040, the report proposed, 75% of the light-duty vehicle miles traveled in the US should be electric miles.

The new paper, Economic Impact of the Electrification Roadmap, finds that the US economy would benefit substantially over the long term from implementation of the EC policy package, including the significant generation of jobs, reduction of the Federal deficit, increase in typical households’ annual income and increased income available for consumption or saving.

In short, the economic modeling shows that the electrification policy proposed by the Coalition offers significant and widespread benefits to the American people, including reducing our federal budget and trade deficit. I believe we are on the cusp of the next great tectonic shift in our economy, one that will transform the way we use energy both in our homes and on the road.

—Electrification Coalition member David Crane, President and CEO of NRG Energy

The Electrification Coalition is a group of business leaders representing the entire value chain of an electrified transportation sector. The Roadmap called for the creation of localized concentrations of electrification (electrification ecosystems): geographic areas in which all of the elements of an electrified transportation system are deployed, thus providing a crucial first step toward moving electrification beyond a niche product into a dominant, compelling, and ubiquitous concept.

Shortly after releasing the Roadmap, the Coalition commissioned the Interindustry Forecasting Project at the University of Maryland and Keybridge Research to study the long-term economic effects of their policy proposals. The analysts used the University of Maryland Inforum LIFT model to perform a detailed examination of the Electrification Coalition (EC) recommendations as proposed in the Roadmap.

The Inforum LIFT model is a detailed economic forecasting model, which captures, among other things, the effects of purchases and sales between industries. It is especially suitable for a study of this kind, the study authors said, because it models the interaction between detailed industry flows in the economy (such as energy use) with macroeconomic aggregates (such as GDP, consumption, employment and the trade balance).

A‘business-as-usual’ outlook for the US economy served as the base case, which was used as a control against which the effects of the various elements of the Roadmap policy package were evaluated. This comparative simulation was carried out over the period 2010 to 2030. For the purposes of this modeling exercise, the primary measurable components of the EC policy initiatives are:

  • Targeted incentives for the purchase of electric vehicles and plug-in hybrid electric vehicles in electrification ecosystems;

  • Targeted incentives for the deployment of charging infrastructure in electrification ecosystems;

  • Targeted incentives for utility IT upgrades needed to support electrified transportation in electrification ecosystems;

  • Incentives for accelerated domestic production and purchase of batteries for electric vehicles; and,

  • Government financial support for automakers to retool and re-equip automotive production facilities needed to manufacture electric vehicles.

The main findings of the study are:

  • Employment. By 2030, total employment would increase by 1.9 million jobs. There would be 560,000 more manufacturing jobs; 276,000 more jobs in travel and tourism; and 73,000 more jobs in professional services. Employment in the motor vehicle industry (including motor vehicle parts) would be about 106,000 jobs higher than the base. Employment in the industries that supply key electric and electronic components to electric vehicles would increase by 112,000 jobs.

  • Federal Revenues. Over time, the federal budget deficit would improve as a result of the policies in the Roadmap. Because of the higher levels of income and GDP resulting from the policies, the US federal budget deficit would improve by a cumulative (2010 to 2030) $336 billion, net of policy costs.

  • Annual Household Income. By 2030, the typical US household’s annual income would rise by $2,763 (2008 dollars). This represents an increase of about 2.2%.

  • Cumulative Household Income. Cumulatively, during the 2010-2030 period, households would experience an increase of $4.6 trillion (2008 dollars) in aggregate income—money that can be saved or spent on other goods and services.

  • Transportation Costs. By 2030, the typical US household would spend less per year directly on energy for transportation. The combination of higher income and less spending on energy means that the typical household would be able to enjoy about $3,687 (2008 dollars) more in consumption of goods and services (or personal savings).

  • Oil Imports. US crude oil and petroleum product imports would fall sharply, by 3.2 million barrels per day by 2030. Cumulatively, between 2010 and 2030, the United States would import nearly 11.9 billion fewer barrels of foreign oil. This compares to estimated reserves of 4.3 billion barrels for Prudhoe Bay, and slightly less than 30 billion barrels for total US proved reserves.

  • Trade Deficit. By 2030, the US trade balance would improve by about $127 billion dollars (2008 dollars).

  • Global Demand for Oil. World demand for oil would fall, leading to lower world oil prices. Outside commodity price experts have estimated that the price of oil would be almost 7% lower by 2030 than it would be without the EC policy package.

  • Resilience to Future Price Shocks. The US economy will be stronger and more resilient. The Electrification Coalition policies—once fully implemented—would mitigate roughly one-third of the economic losses caused by a future oil price shock. By 2025, the EC policies would prevent the loss of 1.4 million jobs in the first year alone of a price shock-induced recession.




The report only focuses on the economic benefits but there are equally important health benefits and national security benefits from going all electric in land transportation.

The economic benefits are also mitigated by the fact that electric cars are still rather expensive to produce. However, it is encouraging than Nissan’s Leaf will go on sale for less than 33.000 USD indicating Nissan are down to 400 to 500 USD per kW/h for their batteries. For EVs to be net economically beneficial (disregarding the health and the security benefits) that battery price still needs to be cut by about 50%. We will know this has happened when Nissan is able to price the Leaf at about 27.500 USD.


Absolutely right, Henrik.
That price is currently scheduled for around 2015 by Nissan.
Getting it down to around $100/kwh as some hope will be a lot tougher, as battery grade lithium carbonate costs around $50kg, and that gets you about 1kwh of battery.
The raw lithium carbonate is only about $8kg, the expense is in refining it.
Most of the lithium carbonate is obtained by evaporating brines. The very large resource in Bolivia has a large amount of magnesium, which is tough to separate from the lithium and so many lead to increased costs.
However there are substantial resources at Clayton Valley in Nevada, perhaps of an order to provide all the lithium to power the entire US light vehicle fleet.
This is not a brine resource, but clays.
The good news is that it may be a lot less costly to refine this to battery grade materials than brine resources.
So it is possible that the US has access and control of the cheapest lithium carbonate battery grade materials on the planet.
Quite a boost for the US economy!


And for the rest of the world too...


"Lithium is usually distributed in a chemical form such as lithium carbonate (Li2CO3) and production figures are often quoted in lithium carbonate equivalent quantities. By weight approximately 18.8% of lithium carbonate is lithium. Therefore 1kg of lithium is the equivalent of 5.3 kg of lithium carbonate."

Excellent discussion of the Clayton Valley operation here:


"The U.S. Energy Information Administration (EIA) projects that net imports of U.S. crude oil and petroleum products will decline from 12.1 MMbd in 2007 to 8.3 MMbd in 2030.2 Growth in total U.S. petroleum consumption is expected to remain relatively flat out to 2030. Meanwhile, the increase in U.S. crude oil production in the Gulf of Mexico and elsewhere, combined with increasing biofuel and coal-to-liquids (CTL) production, is expected to reduce the need for imports over the longer term."
EIA states 21% of 2008 crude oil imports came from Persian Gulf. 21% of 12.1 = 2.5 M bpd.

EC states "US crude oil and petroleum product imports would fall sharply, by 3.2 million barrels per day by 2030."

Hence CTL + biofuel + EC roadmap = no need to import any crude oil from Persian Gulf.


If it was JUST about "need" you'd be right. A lot of people have a lot invested in American being tied to the Persian Gulf.


The EIA's projections of domestic production have been grossly inaccurate (in the optimistic direction) for a very long time. If US imports are going to be reduced, the bulk of the change is going to come from the consumption end.

This can come either from efficiency or just contracting the economy. People who buy and operate inefficient vehicles are implicitly voting for contracting the economy.



Future batteries may use other materials or much less lithium per Kwh.

USA should not miss the train on EVs, e-storage units development and mass production, Solar & Wind energy converters, up-to-date transportable nuclear power plants, very high speed e-trains and other 21st century innovations; otherwise, the economy will keep on shrinking, relative to others.

fred schumacher

This will not happen if fixed costs remain so high for new electric vehicles. To fantasize over a lower variable cost for fuel while increasing fixed costs by 50 to 100% over a similar IC vehicle will not cut it in today's debt-burned world.

There is a way around the fixed cost problem and that's by focusing on vehicle morphology, that is, develoment of appropriately shaped vehicles for the primary transportation need: daily commuting. That need doesn't require a 5-seat, 4,000 pound machine. Reduce the size to a 2-seat, under 1,000 pound vehicle, and the battery costs will drop drastically.

Watch for Tata to come out with a sub-$10,000 electric vehicle. Nobody does parsimony and appropriate technology as well as Tata.


Trouble is the two seat Tata cannot haul the kids, dogs, boogie boards or groceries when necessary. hence the "family" car is a four or five seater.

fred schumacher

Re: "Trouble is the two seat Tata cannot haul the kids, dogs, boogie boards..."

But 87% of the time the average car does not haul any of those things. It only hauls the driver. That's it.

That is exactly the problem of morphology: we purchase a vehicle based on its ultimate use and then use it lightly loaded the vast majority of the time. What is needed, and what is not available, are single-purpose, not multi-purpose vehicles.

The average suburban family has at least two cars, because it has two working parents. What if two two-seat commuters could be bought for the price of one multi-purpose car, and those two commuter cars would fit into one garage space, leaving the other slot for the family's multi-purpose car.

Fixed cost for the three vehicles is the same as two multi-purpose cars, but the energy needed to operate those vehicles will be drastically lower than the present default situation. (And a two-seater will definitely be able to haul the groceries for the average family.)

Account Deleted

Yes, I agree with that statement. Electrification of car is effective in our community. Specially the Sunpowerport Solar Generator

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