The EV Market Requires Utilities to Collaborate

As EV adoption continues to quickly evolve and expand against the backdrop of aggressive climate change goals, the urgency increases for utilities to collaborate across diverse groups of stakeholders to prepare for the growing EV market. Such efforts extend beyond infrastructure upgrades. Utilities must work with stakeholders to establish best practices to meet federal decarbonization targets and EV market demand while maintaining grid reliability.

EV Adoption

Driven by growing consumer acceptance of EVs, an improving public charging landscape, and regulatory pressure, the automotive industry is expanding EV supply and investment. Guidehouse Insights forecasts annual plug-in EV sales in North America will grow from approximately 1.2 million units in 2022 to 7.6 million in 2031, at a compound annual growth rate of 22.9%.

Government policies and funding play a significant role in the EV market’s momentum. The Biden administration has called for a network of 500,000 EV chargers by 2030. The National EV Infrastructure Formula Program provides $5 billion for states to strategically deploy EV chargers along major transportation routes. Additionally, the Inflation Reduction Act’s revisions to EV tax credits, while limiting EV eligibility in the near term, will likely expand overall EV eligibility in the long term, as automakers reorient supply chains toward domestic production in response to eligibility criteria.

To support EV market growth, collaboration with utilities is also needed. A report released in April by the North American Electric Reliability Corporation and utility groups calls for utilities, EV manufacturers, and EV equipment industries to work together to ensure electric system reliability. The report recommends creating accepted industry practices and standards to prevent potential cascading blackouts and widespread power interruptions.

Collaborations

The Electric Power Research Institute is coordinating a collaborative effort, EVs2Scale2030, to better understand the magnitude of the EV threat to the grid. This 3-year initiative aims to help the utility industry and its regulators work with vehicle manufacturers, fleet operators, and consumers to build confidence in achieving the Biden administration’s EV goals. Announced in April, the work includes developing a national roadmap that outlines EV loads, grid impacts, lead times, and costs through 2030.

Companies within the EV space are also collaborating to provide solutions for electric utilities’ EV customers and to advance battery technology. For example, in late March, Eaton and Sunverge announced they would be collaborating on a platform that enables utilities to manage flexible loads behind the meter. And in April, StoreDot and VinES announced a joint development agreement to research, develop, and offer extreme fast charge battery cells.

Another management strategy is establishing new rate designs that encourage EV adoption as well as integration and charging technologies while ensuring equitable benefits for all customers. In April, Lawrence Berkeley National Laboratory released a report on a database it developed of piloted, proposed, and offered EV customer rates from investor-owned utilities. The objective of this work is to help regulators, utilities, and other EV stakeholders gain a better understanding of EV rate designs across the US.

Conclusions

The EV market is growing fast, and the stakes are high. If utilities, policymakers, manufacturers, and other stakeholders in the EV supply chain do not work together now, the pace of EV adoption may outstrip the value chain’s ability to support it. Indeed, US utilities must collaborate, or the EV industry, the grid, and utility customers may face damaging consequences.