To understand the rise in electric vehicle adoption and its impact on the grid, it is easiest to start with the stakeholders.

First – the manufacturers. By 2035, many major auto manufacturers will have shifted to only electric models, from luxury sports cars to mass-market economy vehicles. More specifically, these notable manufacturers have shared their all-electric target dates:

  • Jaguar – 2025
  • Volvo – 2030
  • Ford – only EV (Electric Vehicle) in Europe by 2030
  • General Motors – 2035

It is not just passenger cars in the mix, fleet owners are also committing to EVs (Electric Vehicles) – in early 2021, Amazon announced they planned to employ 10,000 electric vehicle delivery vans in 2022 and 100,000 by 2030.

Second – the drivers. While growing numbers of people were environmentally minded prior to COVID-19, the pandemic has accelerated concerns about sustainability. Mastercard reported that in a study in 24 countries, 85% of respondents said they were willing to take personal action to support sustainability. That includes 54% who believe it is even more important than ever to reduce their personal carbon footprint since the onset of COVID-19. As a result, demand for electric passenger cars is growing significantly and is expected to reach a compound annual growth rate (CAGR) of 26.8% from 2021-2030.

Third – the elected leaders. Government policies are playing a role in electric vehicle growth. President Biden announced a robust new goal to make half of all new cars sold in 2030 zero-emissions vehicles. This target includes battery-electric, plug-in hybrid electric, or fuel-cell electric vehicles. In Europe, The European Commission is aiming to have 30 million electric vehicles on the road by the end of the decade.

Powering the Rise in Electric Vehicle Demand

As electric vehicle usage gains traction, there have been continued debates on the impacts on the grid. Our grid infrastructure is undeniably aging and already strained beyond its original capacity. Nationally, energy demand for electric vehicle charging could reach 53 billion kilowatt-hours by 2030, a 20-fold jump. Based on stats like this, analysts point to the need to build new power plants and upgrade transmission systems yet understand that this type of monumental change does not happen overnight. On the other hand, proper grid management can prevent capacity issues.

It is clear, one way or another, utilities, energy partners, businesses and other stakeholders need to prepare for the accelerated growth of electric vehicle charging stations. In California alone, a new $437 million fund was approved to build thousands of charge ports across the state. If there is a surge in vehicles all trying to charge at once, the grid will quickly become overloaded. Careful planning of this uptick in usage will be critical to maintaining grid reliability. Methods like time-of-use rates and off-peak charging can manage demand and load. It is important to approach future electricity demand proactively, with a focus on efficient allocation.

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Some utilities are already making strides in proactive grid management. For example, Southern California Edison offers significantly reduced rates if vehicles charge up when solar power is abundant. Shifts like this are still in the preliminary stages but could yield significant benefits. Boston Consulting Group reported that utilities could save up to 70% of grid upgrade costs by shifting to optimized charging strategies.

Electric vehicle adoption used to be a matter of “if,” and now it’s a matter of “how.” Auto manufacturers have made bold commitments, consumers are increasingly ready for non-fossil fuel-powered cars, and local, national, and international governments are putting policies in place to support these changes. Concerns about grid overload and the rapid pace of change are valid. Still, with adaptive grid management techniques and a proactive approach to anticipating demand, we will be better prepared for the electric future.