Utilities Need to Keep Pace with the Surging EV Market

Although the COVID-19 pandemic depressed the overall automotive market, the EV market thrived and is robust. EV sales increased by 160% in the first half of 2021 from a year earlier to 2.6 million units. Two of America’s major automakers, GM and Ford, have invested heavily in EV development in anticipation of increasingly strict emissions regulations in every major global market. A growing list of other automakers have embraced the transition to electric and aren’t looking back. Meanwhile, China is close to achieving 20% EV deployment before 2025.

The success of EVs is giving momentum to more aggressive stances on transport-related greenhouse gas emissions from world leaders. President Biden plans for half of all new US vehicle sales to be electric by 2030 and has committed $174 million to support EV uptake. Meanwhile, as part of the European Union Commission’s Fit for 55 climate package, the region is looking to phase out the internal combustion engine in new light duty vehicle sales by 2035. These initiatives and others are expected to result in a global fleet of more than 185 million EVs by 2030.

EV Surge Will Create Grid Challenges

The global surge in EV deployment presents challenges and opportunities. Among the key challenges is the ability of the incumbent grid infrastructure to cope with ensuing demand. Utilities and other power generators are central to grid infrastructure. Understanding where demand is coming from, as well as consumer driving and charging habits, will be pivotal to utilities and other power generators to appropriately size, scale, and shape infrastructure.

Uptake of EVs is unlikely to significantly add to overall grid system energy demands for some time. However, challenges remain in highly localized distribution grid capacities and in shaping the EV load profile so that it does not exacerbate load volatility. All while utilities must also face the challenge of both increasing the mix of renewables in the grid and firming the grid amid increasingly disruptive climate and cyber threats.

Utility Preparation Is Required

In preparing local networks, utilities should calibrate for continuous improvements in new EV capabilities. They have to grapple with increasingly sophisticated technologies with higher charging capacities and bidirectionality. Fleets and consumers are likely to pressure utilities to transform to keep pace with what iterative EV technologies can enable. This means implementing demand management programs, investing in non-wires alternatives rather than building new grid capacity, and communicating with EVs and chargers to aggregate and shift loads to benefit the grid.

Guidehouse Insights’ Market Data: EV Charging Equipment report summarizes the technologies and applications making up the global EV charging market. It provides forecasts through 2030 and identifies forces, challenges, and opportunities driving the market.