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ICCT assesses factors driving EV market in US cities

A new white paper from a team at the International Council on Clean Transportation (ICCT) assesses the growing US electric vehicle market and the factors that are driving it, with a focus on the 50 most populous US metropolitan areas.

Peter Slowik and Nic Lutsey analyze the connections among various state and local policies; public and workplace charging infrastructure; consumer incentives; model availability; and the share of new vehicles that are plug-in electric (both fully electric and plug-in hybrid). The San Jose area had the highest share at 10%, followed by other California areas (4% to 6%) and markets in Colorado, Hawaii, Oregon, Vermont, and Washington (2% to 4%). Overall, the share of new vehicles that are plug-in electric in these 50 areas is 1.2%, about 3 times the proportion in the rest of the United States.

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Electric vehicle share of new 2016 vehicle registrations by metropolitan area. (New vehicle registration data from IHS Automotive.) Source: The ICCT. Click to enlarge.

Many factors are helping to spur electric vehicle growth in markets across the United States. The activities and policies analyzed in this report help to explain why the electric vehicle market is growing more quickly in some areas than others. We catalogued dozens of unique electric vehicle actions and found statistically significant relationships between the electric vehicle share of new light-duty vehicle sales and model availability, consumer incentives, public charging infrastructure, workplace charging, HOV lane access, and city promotion actions. The markets across the United States that are seeing more of the underlying support activities are seeing results in the form of greater electric vehicle market growth.

—Slowik and Lutsey (2017)

The ICCT duo drew four overarching conclusions:

  • Growth in the electric vehicle market requires many actions by many players. Actions by many local, state, and utility stakeholders work to reduce consumer barriers by means of policy, incentives, and awareness campaigns. Such a comprehensive approach is exemplified by California, where the Zero Emission Vehicle regulation helps to catalyze automaker marketing and model availability, complementary policy incentives, and sustained investment in charging infrastructure.

  • Expansion of electric vehicle options is a prerequisite to market growth. The five leading electric vehicle markets by volume, representing nearly half of all US electric vehicle sales, each had at least 24 available electric vehicle models in 2016. Yet across the major US markets, about half of the population has access to 10 or fewer electric models, and many dealerships have very low inventories of those models. Availability of more models across vehicle types, offered at a range of price points and passenger capacities, is an essential precursor to more substantial market development.

  • Consumer incentives remain key to growing the electric vehicle market. Electric vehicle uptake is linked with incentives that reduce the effective electric vehicle cost. Ten of the top 12 major metropolitan areas with the highest electric vehicle uptake offered consumer incentives typically worth $2,000 to $5,000. Consumers in California markets and Salt Lake City were offered both consumer purchase incentives and carpool lane access, and those in Denver and Seattle had substantial purchase incentives.

  • Electric vehicle charging infrastructure remains a barrier in many markets. The analysis found that the availability of public charge points and workplace charging is linked with electric vehicle market uptake. The markets of Charlotte, Detroit, Kansas City, Minneapolis, Pittsburgh, Providence, and Virginia Beach showed charging infrastructure growth of approximately 30% to 80%, corresponding with at least a doubling of their electric vehicle uptake from 2015 to 2016.

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Electric vehicle public charging availability, promotion actions, and share of new vehicles. Source: The ICCT. Click to enlarge.

More electric vehicle models with lower cost and longer electric range keep coming, and governments around the world stand to gain from learning from each other’s policy and market experiences. The collective adoption of similar actions to help overcome barriers and develop electric vehicle markets will help all regions around the world achieve their air pollution, climate, and fuel saving benefits. The more markets that are embracing the leading electric vehicle policies, the faster the transition to an electric vehicle eet will occur.

—Slowik and Lutsey (2017)

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