With $7.5 billion being invested by the federal government, the majority of which will go to build out charging stations for electric vehicles (EV), now seems to be the perfect time to ask the questions how many chargers will we need, when, where and what type. It is incumbent upon the government and private entities to invest strategically, to maximize the utility of the infrastructure that is deployed to best service drivers and to expedite the establishment of a legitimate business case that can sustain market development over the long term. That is why the Fuels Institute Electric Vehicle Council (EVC) commissioned S&P Global Mobility (formerly IHS Markit) to produce “EV Charger Deployment Optimization – An Analysis of U.S. State-level Electric Vehicle Supply Equipment Demand Forecast and Supporting Infrastructure Considerations.” (Yes, that is a mouthful – but so is the topic the report seeks to address.)
How Many EVs Must Be Served?
To initiate the analysis, S&P Global Mobility first had to assess the rate at which the EV market might grow over the next several years. It must be noted that the forecast used in this study was developed in July 2021 and does not incorporate developments over the past year. In addition, the rate of development is significantly more conservative than other forecasts being discussed today. But I honestly believe it is a more realistic forecast than some of these others and, even if not, it serves as a baseline for analyzing demand for chargers and the methodology of this report can quite easily be applied to other forecasts.
That said, S&P Global Mobility forecast that by 2030 the U.S. might sell as many as 2.8 million plug-in electric vehicles (battery electric and plug-in hybrid electric). If light duty sales remain in the range of 16.5 million units per year, this would translate into a market share of about 17%. Meanwhile, the number of plug-in vehicles in operation by 2030 might just eclipse 18 million – which would represent a share of 6% of the total projected fleet of about 307 million.
Where are EVs in Operation?
Whether you think these numbers are too low or too high, they serve as a reference baseline. In addition, leveraging their industry leading vehicle registration database, S&P Global Mobility was able to demonstrate the regional diversity of EV registrations. It is clear that not all states are developing at the same pace, and this is projected to remain true even through 2030. According to their data and their forecast, in July 2021 15 states accounted for 82% of all EVs in operation and, by 2030 76% of EVs will remain concentrated in just 15 states. This means that charger deployment strategies must be customized to specific market conditions, not simply pushed out into every segment of the nation.
DC Fast or Level 2?
Given this insight on vehicle registrations, S&P Global Mobility then took a census track analytical approach, leveraging a variety of market-specific attributes and data points, to determine how many chargers would be needed in each market. They used the international benchmark for the ideal EV-to-charger ratio of 10.4:1. From this analysis, they determined the U.S. may require as many as 1.8 million charging stations by 2030 – significantly more than the federal government’s goal of 500,000. Yet, based upon mobility assessments and dwell time analysis, they project that 90% or more of these stations could be strategically located Level 2 chargers – a discovery that could save billions in capital investment while still effectively serving the needs of drivers.
Where Will We Need Chargers?
Rolling the census track analysis up to the state level, S&P Global Mobility was able to categorize each state into four levels of EV charger demand priority. This prioritization can help direct investments to the markets where the resulting chargers will have the greatest utilization – thereby benefiting drivers as well as those installing and operating the chargers. The following map demonstrates the prioritization of states within the U.S. from a top priority Level 1 to a lower priority Level 4.
How Do You Analyze a Market?
Finally, to demonstrate how to apply census track analysis to determine the optimal location for charger installation, S&P Global Mobility included within the report three case studies – Detroit, MI; Dallas, TX; and Portland, OR. Each case study looks at EVs in operation, number of chargers, income and housing composition, driver behavior and points of interest with significant dwell time, etc. These examples can help guide more granular analysis to ensure that charger investments are delivering the greatest value to their markets.
Achieving Strategic Deployment
It is often very easy to talk about future market development and needs using round numbers that are easy to remember, but this expediency for communications-sake does not result in the optimal investment of resources to support the growing market of electric vehicles. It is essential that infrastructure decisions be strategic in nature and based upon real market needs assessments, especially when taxpayer funds are being used.
As I wrote in our last blog, there is no definitive answer about what the future will be – there are only projections and scenarios of what it might become. Therefore, it is the hope of the Fuels Institute and the Electric Vehicle Council that this evaluation can serve as a valuable resource to help inform investment decisions and to guide charger deployment in such a way as to deliver value to all stakeholders involved. We look forward to continuing the discussion about how the transportation sector can evolve strategically and in a very consumer-friendly manner.