May 11, 2020
This Trump administration rule proposal to reduce fuel-economy standards, released March 31, would be a step backward. It would harm air quality at a time when Westerners are more aware than ever before of the need to keep our air and lungs healthy. Electric vehicles offer a way forward.
Increased electric vehicle use is also crucial to reducing the emissions that drive climate change and affect the health and welfare of our families as well as generations to come. Although the economic outlook is uncertain in the short term now, failing to address climate change would bring even more health and economic consequences in the future, so we must continue to work on policies that have a long view.
Electric vehicles and the infrastructure they require also must be a critical component of economic stimulus efforts as we emerge from the coronavirus stay-at-home period.
Today, the auto industry as a whole is facing some short-term challenges, and the electric vehicle industry is certainly not exempt:
- Auto sales slow in economic downturns,
- Supply chains have been temporarily upset, and
- Oil prices are low at the moment, but we know those can fluctuate wildly.
But even if oil prices do temporarily result in even lower gasoline prices, those gas prices wouldn’t beat the ultra-low cost per vehicle mile traveled of an electric vehicle. According to the U.S. Department of Energy, the national average cost for fueling an electric vehicle is $1.15 per “eGallon,” compared with the national average gasoline price right now of $2.25 per gallon. So fueling an electric vehicle is still half the cost. Here in Colorado, the savings are even greater: the average cost for fueling an electric vehicle is $1.04 per “eGallon,” compared with an average statewide gasoline price now of $2.14 per gallon.
Electric Vehicle Infrastructure Should Be Part of Economic Stimulus Efforts
In 2009, the American Recovery and Reinvestment Act, the stimulus package which started the country back down the road to economic recovery after the 2008 financial crisis, helped transform the renewable energy industry. Clean energy infrastructure is an ideal component of an economic stimulus because it usually requires investment in new infrastructure, creates jobs, and injects capital into the economy. This year, clean energy investment should be a central part of any new economic stimulus policies, given the economic opportunities that clean energy now brings and the cost savings for consumers.
Electric vehicle charging infrastructure is a great example of this. It puts people to work and injects capital investment into the economy.
Luckily in Colorado we have enabling legislation which will allow for electric vehicle infrastructure investment to be a part of economic recovery. Other states in the West, including Nevada and Utah, have also made plans for significant buildout of electric vehicle infrastructure.
The electric vehicle market should bounce back after a temporary a lull. Manufacturers and governments have already directed significant resources towards electric vehicles, and further investments will continue when economic conditions improve.
One way that electric vehicles could feature prominently in an economic recovery is through a second coming of the “Cash for Clunkers” program, which was a key component of economic recovery for the automotive industry in 2009. The 2020 version of Cash for Clunkers could be an “Emitters for Electric Vehicles” version, which would give money to consumers for trading in their older fossil fuel car for an American made electric one. This idea was recently proposed by Senate leaders and automobile manufacturers as a way to help the automotive industry bounce back while helping a shift toward zero-emissions vehicles.
Electric Vehicles Offer Economic Benefits to Consumers
Electric vehicles, when compared with fossil-fueled cars, already offer significant savings to consumers over the life of the vehicle, and upfront costs are quickly coming down.
Plus, there is considerable political will to make this transition to protect our respiratory health and stem the challenge of climate change.
Leaders in states across the West and nationally should work to improve economic conditions in general and ensure the bounce back of the electric vehicle industry by putting clean energy investments such as charging stations at the center of their economic recovery packages, since those investments offer significant economic advantages and cost savings for consumers. These projects also would create jobs and inject capital into the economy. Transportation electrification can be a tool in our economic recovery.
Colorado last year adopted a zero-emission vehicle (ZEV) standard, and any temporary economic downturn likely will not impact Colorado’s ZEV program. Requirements for automakers don’t begin until 2022, and there is no requirement that consumers must buy electric vehicles. The fact is that in recent years dealers have not been bringing the volume and variety of electric vehicles to the market to meet consumer demand. The ZEV program in Colorado will fix that when it goes into effect and will enable better customer choice.
The economic situation now is fluid and uncertain, but Colorado’s electric vehicle goals, as well as other electric vehicle efforts across the Interior West, can play an important part in rebuilding.