Navigant Research Blog

How Incentives Are Driving EV Markets in California and Oregon

— June 22, 2015

In a recent study conducted by Navigant Research, 1,002 consumers in the United States were asked their opinions on electric vehicle (EV) ownership, its advantages, and its disadvantages. The survey revealed some not-so-surprising results of incentives and how they affect EV purchases, including how consumer opinions on tax credits and charging infrastructure are influencing the decision on whether to purchase electric cars.

In Oregon, where 23.5% of participants responded that the biggest impediment to purchasing an EV was the premium price, the only incentive offered is a credit of $750 on the purchase of a battery electric vehicle (BEV). The percentage was lower in California, which offers $2,500 in rebates for each battery-powered vehicle and allows EVs to travel in HOV lanes for free. Of those surveyed, 6.5% of California residents responded that the premium price was the reason they would be less likely to purchase an EV.

Range anxiety appears to be much more of a factor in California, with 19.6% of respondents saying it is their primary reason for not purchasing an EV. In Oregon, the number is 11.8%. While there are 2,114 charging stations in California and only 402 in Oregon, the number of charging stations per capita in California is .000055, whereas it’s .0001 in Oregon. This means that there are twice as many publicly available charging stations for each person in Oregon.

As far as the number of EVs in each state, the ratio is even worse. According to Navigant Research’s Electric Vehicle Geographic Forecasts report, in 2015, 106,550 light duty plug-in electric vehicles (PEVs) are expected to be sold in California while only 4,872 are expected to be sold in Oregon. If California’s infrastructure for EVs does not keep up with growing EV sales, the ratio will get worse. However, three major California utilities (Pacific Gas& Electric, San Diego Gas & Electric, and Southern California Edison) have petitioned to install thousands of EV chargers.

What It Boils Down To

California and Oregon are fairly similar geographically: both are located on the Pacific coast, with temperate areas along the shoreline, and hotter weather east of the mountain ranges. However, the opinions and market influences for EV purchases are very different in both states. California consumers are disadvantaged in infrastructure, with a lower number of public EV chargers both per capita and per EV purchased. Oregonians receive a lesser financial incentive to purchase an EV, with only around one-third the state incentive as Californians receive. However, when it comes to actual purchases, Californians are still coming out ahead. In the light duty EV market, one car is projected to be purchased for every 364 people in California. In Oregon, the ratio is 815 people per PEV. So, when it comes to incentivizing EV purchases, it seems like offering strong financial incentives and HOV access takes precedence.


California’s Investments Pay Off in PEVs

— June 3, 2015

Analysis of the penetration of plug-in electric vehicles (PEVs) per capita reveals that, to the surprise of no one, California is far ahead of the rest of the United States. Based on data from Navigant Research’s recently published Electric Vehicle Geographic Forecasts report, 7 of the 20 areas with the most PEVs on the road in 2015 are in the state.

As show in the below table, California’s seven metropolitan statistical areas are near the top of the list for PEVs sold per 100,000 residents. California’s route to success has included substantial investments in PEVs and EV charging infrastructure through incentives, project grants from the California Energy Commission and other state institutions, and by providing PEV access to HOV lanes. However, the coveted HOV stickers are nearly gone, so it would not be surprising if PEV sales in the Golden State slow unless new stickers are made available.

PEVs on the Road per 100,000 Residents

John blog table, june 2(Sources: Navigant Research, U.S. Census Bureau)

The regions on this list have many things in common that make owning a PEV favorable, including demographics like age and higher average incomes that lean toward PEV ownership. All of the states wherein these regions lie have some form of incentive for buying or driving an EV or for purchasing a charging station, often in the form of tax credits or the ability to drive in HOV lanes. Also, nearly all of the areas on the list were recipients of charging infrastructure funded by the Department of Energy’s EV Project and ChargePoint America projects, which deployed thousands of Level 1-2 and direct current (DC) fast charging stations between 2010 and 2013. The exceptions that were able to also create demand in PEVs are Honolulu, Denver, and Miami, although each area has received some federal funding for EV programs.

Investments in public EV charging infrastructure by federal or state agencies (or increasingly utilities) have resulted in greater PEV awareness by the general public, as well as increased PEV sales as potential buyers feel greater confidence knowing that they can charge at familiar spots around town. Conversely, states without investments in EV charging infrastructure have seen much less PEV penetration.



More EVs Might Mean Changes to Parking Garages

— May 27, 2015

The adoption of electric vehicles (EVs) seems to be unstoppable. In Electric Vehicle Market Forecasts, Navigant Research estimates that plug-in EVs will make up 2.4% of total worldwide light duty vehicle sales by 2023. EVs will thus have a profound impact on the electrical grid, but how will they affect buildings?

Currently, the most visible impact has been the proliferation of electric vehicle charging stations. Driven largely by LEED requirements and state-level incentives, many commercial buildings have dedicated parking spaces for EVs. Indeed, in some markets, EVs have enough of a presence that commercial buildings are installing charging stations in response to demand from the market. But, increased adoption of EVs may necessitate new paradigms for the design of parking garages.

The Solution to Pollution Is Dilution

Parking garages need ventilation. In addition to the carbon dioxide that contributes to climate change, internal combustion engines also emit a lot of other pollutants that are terrible to breathe. Parking garages need to exhaust these pollutants and replace them with fresh air in order to be compatible with human life. Building codes dictate the amount of air that needs to be exhausted based on the worst-case scenario: if every car in the garage was running at the same time.

This approach made sense when sensors and controls were expensive and difficult to use. However, with the sophistication of modern systems, demand-controlled ventilation (DCV) is becoming an attractive alternative to reduce energy consumption. DCV uses sensors to monitor air conditions and match the delivery of ventilated air with the actual need of the space. DCV saves substantial energy because the airflow that a fan provides has a cubic relationship with the power needed. As a result, halving the airflow of a fan reduces the power consumption to one-eighth of the full airflow. Some systems can reduce peak kilowatt-hour demand by up to 95%.

Unlike internal combustion engine vehicles, EVs do not create emissions that need to be exhausted (that happens at the power plant). So, in a future with all EVs, garage ventilation requirements can be drastically reduced. But, in the meantime, the presence of EVs in parking garages translates to greater savings through DCV operation.


Washington Encourages Utilities to Deploy EV Chargers

— May 13, 2015

On May 11, Washington Governor Jay Inslee signed into law a bill titled “Encouraging utility leadership in electric vehicle charging infrastructure build-out.” The law encourages public utilities commissions (PUCs) in the state to set rules for passing along the cost of electric vehicle (EV) charging to all ratepayers if they are requested to do so by investor-owned utilities.

The legislation enables utilities to pass on the cost of EV charging infrastructure as long as the rate increase does not exceed one-quarter of 1 percent. PUCs in other states have varied in their willingness to allow the cost of EV chargers to affect the rate base. For example, in Indianapolis, EV car share service Blue Indy is months behind the original launch date because the PUC there denied a similar request for EV infrastructure investments by the utility.

Washington State Representative Chad Magendanz (R-Issaquah), who sponsored the legislation, said in an email to Navigant that the law was created so that the upfront cost of charging equipment could move from the consumer to the utility. “My vision is for utility customers to be able to simply request an EV Level 2 charging station for their garage, just like they’d request a cable modem installation from the cable company … many of the current obstacles to charging at home or work will disappear.”

Restored Incentive

Washington is expected to have the fourth-most EVs on the road in 2015, according to Navigant Research’s recently published report, Electric Vehicle Geographic Forecasts.

Utilities are well-positioned to own and operate EV charging infrastructure since it increases the market for their product (electricity), and they also need to manage the impact of EV charging on grid stability. However, in many states, laws have prevented them from owning EV chargers, and some states, such as California, have had to revise laws to allow utility involvement.

“HB 1853 essentially restores the incentive a power company would normally have to invest in equipment that would increase its sales, but that we’ve eliminated through conservation programs,” said Magendanz. “Utilities have the expertise and purchasing power to dramatically reduce costs of this essential infrastructure build-out, and can break down barriers to EV ownership in high-density regions.”

The challenge has been for states that are pushing utilities to reduce energy consumption to recognize that transferring oil consumption from transportation into electricity delivered by utilities is economically and environmentally sound policy. States such as Washington that have low carbon intensity for producing energy (only Vermont has a lower carbon intensity, according to the U.S. Energy Information Administration) can see the greatest greenhouse gas savings by encouraging EV adoption.


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