Imagine—it’s 2050, and downtown Detroit is humming with electric vehicles. Once novel, electric vehicles now make up the majority of new car sales worldwide, and more than a third of all cars on the road. Transportation emissions have fallen, and health outcomes have improved. Our businesses are better off too, pocketing billions of dollars in savings through reduced electricity rates. This picture is not as far-fetched than many might think. Michigan’s automakers, regulators and electric utilities are beginning to take steps in the right direction, but much more must be done to unlock the immense potential of the electric vehicle market today.
This was the clear message at the Michigan Technical Conference on Alternative Fuel Vehicles, hosted by the Michigan Public Service Commission and Agency for Energy. Throughout the conference, State officials, automakers, charging companies, utilities and environmental experts showed their support for expanding electric vehicle adoption in Michigan. With robust regulatory framework and adequate charging infrastructure, electric vehicles can be an economic boon for the state, improve air quality and continue to reduce carbon emissions.
Unfortunately, Michigan is just not there yet. We heard representatives from Ford and General Motors express their frustration with the pace at which Michigan is electrifying the transportation sector. Steve Henderson, manager of electrification infrastructure, programs and policy at Ford said it plainly, “We simply don’t have enough chargers to support what we need in the future.”
Britta Gross, director of advanced vehicle commercialization policy at General Motors echoed this sentiment and added, “There is a lot of belief that this market will come. This is going to happen. We should get ready, and get it done.”
And she’s right. Detroit automakers have increasingly embraced electrified transportation, and more than 600,000 electric vehicles have been sold across the country to date. In fact, Michigan is among the top 10 states in electric vehicle sales, and top 20 by share of the total vehicle market. But to get the market to scale, and meet our climate goals, the United States needs to be significantly more ambitious. To do this, automakers must continue to develop new product lines and invest in customer education and awareness. Major utilities and independent power producers also stand to reap the rewards of a projected surge in electricity demand and should be clamoring to invest in electric vehicle charging infrastructure. While the MPSC can provide a clear regulatory pathway for utilities, and lawmakers can provide guiding policy and incentives, a cross-sector effort is needed to spur electric vehicle adoption in Michigan.
Many businesses see this potential and support policies that help accelerate the transition to a clean, low-carbon economy. Now that emissions from the transportation sector have surpassed emissions from the electric power sector in the United States, businesses are increasingly looking to state governments to support the electric vehicle market so that they too can adopt electric vehicle fleets and supply charging stations for employees and customers. Not only do electric vehicles reduce emissions, but they reduce fuel and operating costs relative to internal combustion engine vehicles. Off-peak electric vehicle charging, in particular, can also take pressure off the grid—helping all ratepayers save money on their electricity bills.
To put these benefits into perspective, a recent report from M.J. Bradley & Associates found significant potential for electric vehicle growth and subsequent savings for ratepayers, regardless of whether or not they own an electric vehicle. According to the report, Michigan ratepayers can expect to save up to $2.6 billion on their electricity bills by 2050, and reap $5.7 billion from reduced greenhouse gas emissions. Electric vehicle owners can also expect to save an incredible $23.1 billion in fuel and maintenance costs. But if Michigan is to achieve this transformative change, regulators, lawmakers, automakers and utilities must continue to work together to create a robust framework for the electric vehicles market.
This fall, the MPSC will release a briefing paper that examines major trends and regulatory options on the role of utilities, rate design and incentives. Ceres has offered a few recommendations to the MPSC:
• Allocate the maximum amount (15 percent) of VW Environmental Mitigation Trust funds on charging infrastructure for electric vehicles.
• Locate infrastructure investments at sites that are best situated to accelerate and maximize clean vehicle adoption, including workplaces, highway corridors and multi-unit dwellings.
• Foster a competitive marketplace by supporting investments that add to existing and planned infrastructure.
• Implement well-designed time-of-use charging rates that will maximize fuel costs savings and improve the utilization of the grid, thereby reducing electricity costs for all ratepayers.
• Prioritize investment in communities disproportionately affected by higher levels of pollution, nonattainment or maintenance areas, or designated Federal Class 1 areas.
With the right structure, programs and policies in place, Michigan can deliver widespread benefits to all ratepayers, including reduced electricity rates, lower vehicle operating costs, cleaner air, and an alternative to volatile oil markets.
Editor’s note: this article has been updated with minor edits for clarity.
Sarah Tyler is an associate on the state policy team at Ceres. Ceres is a sustainability nonprofit organization working with the most influential investors and companies to build leadership and drive solutions throughout the economy.