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Breaking Down the Precise Value of EVs

The number of connected EV (electric vehicle) charging points in North America and Europe is set to reach 7.9 million by 2025. The EV market is on the rise, according to many reports. Add to that the fact the Biden administration has pledged to extend EV tax credits, and California has moved to ban new internal combustion engine cars in 2035, and it is the perfect storm that is going to catapult EVs forward.

But here are my questions we need to examine: How do you make the transition in your home to charge your EV (electric vehicle)? And how expensive is it?

Let’s start by looking at the cost to charge. According to the U.S. EIA (Energy Information Admin.), the average U.S. household pays nearly 14 cents per kWh as of May 2021. Kelley Blue Book adds to use a simplified example, if you used 1,400 kilowatt-hours of electricity and your monthly bill is an even $100, you’re paying exactly 14 cents for each kWh. Let’s say you drive about 540 miles per month. For an EV, you will use 180 kWh in that timeframe. Using the U.S. household average from May 2021 of 14 cents per kWh, it would cost $25.20/month to charge an EV. Less than a month’s worth of gas, right?

But, wait. Next let’s look at the cost of the infrastructure. PwC says EV chargers are defined by the amount of energy delivered to the vehicle’s battery per unit of time. There are four “levels,” with Level 4 being the fastest. Capex for a charger consists of the charging equipment itself (similar to a gas pump) plus any required upgrades to the local electricity grid, land, civil works, etc. Most capital cost comprises the charging hardware itself.

Level 1 chargers—like a residential 110-volt outlet—are the least expensive. Level 3 and 4 chargers, however, are more expensive and complex. Most EV owners are expected to do up to 80-90% of their charging overnight at home or during the day at work, estimates the U.S. Dept. of Energy. In these use cases, Level 2 chargers will likely be used.

A Level 2 charger in a home can halve charging time, but Kelley Blue Book says the cost isn’t cheap. About $2,000 for parts and installation is a reasonable ballpark figure.

Here is another concern I have. If the initial costs are high, will the distribution of EVs be equitable? This was a question presented by Dr. Shelley Francis, cofounder and principal, EVNoire. She envisions a world where all communities have access to this innovative technology—and wants to ensure it is available to frontline communities—those adjacent to manufacturing and transportation hubs—impacted by climate change. She suggests one of the best ways to do this is by engaging in the frontline communities to help unlock the potential for electrification.

There are a few things we can do to make this a little bit more equitable. For one, we need to understand the root problems—or the history—which I explain on my recent episode of The Peggy Smedley Show. Here are three other things we can do next.

  1. Be intentional in our outreach and marketing to different communities.
  2. Use data to inform policy, messaging, programming recommendations, and pilots.
  3. Make sure all communities have ample charging infrastructure.

The cost of EVs and the related charging infrastructure might be high now—but as we all know costs often fall after the early adopter phase. Now, it is just a matter of how quickly that might happen—and how widely we might spread out the infrastructure. We need to work within our communities to make adoption a reality. It’s more than talking about it. It’s about listening and recognizing this isn’t a cheap endeavor. It’s about infrastructure, technology, and people. Once we put all the pieces together, we can begin to map out a real solution for success. I look forward to seeing your participation in making EVs a reality for all communities.

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