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US adoption of electric vehicles

Hydrocarbon Engineering,

According to the US Energy Information Administration (EIA), in 2013 there were about 70 000 battery electric vehicles (EVs) and 104 000 plug in hybrid electric vehicles (PHEVs) – small numbers compared to approximately 226 million registered vehicles in the US. Total US sales of plug in electric vehicles (PEVs) have increased in recent years, but still represent only about 0.7% of new vehicle sales in 2014 so far, up from 0.6% in 2013 and 0.4% in 2012. California is home to almost half of all the nation’s PEVs, but even in California, only approximately five out of every 1000 registered vehicles are PEVs.

Several states offer tax incentives to reduce the upfront cost of PEVs to consumers. These incentives are in addition to a federal (nationwide) tax credit, which ranges from US$2500 to US$7500 depending on battery capacity and gross vehicle weight. Examples of incentives include the following:

  • California offers rebates of up to US$2500 for EVs that run only on a charge, and US$1500 for PHEVs, which can also run on gasoline.
  • Washington has exempted EVs from the state’s 6.5% sales and use tax. However, the incentive does not apply to the purchase of PHEVs. While PHEV ownership is higher than that of EVs for the US, the reverse is true in Washington.
  • Georgia offers a zero emissions vehicle (ZEV) tax credit of 20% of the cost, up to US$5000. ZEVs include vehicles powered by electricity or hydrogen fuel cells.
  • Maryland offers a tax credit of US$125 for each kilowatt hour of battery capacity of an EV, up to US$3000. Many EVs have a battery capacity sufficient to obtain the full credit. PHEVs have a lower capacity and therefore secure a lower credit; the state estimates that a consumer purchasing a plug in Toyota Prius would get a credit of US$550.
  • The District of Colombia has a tax credit of 50% of the incremental cost of an EV, up to US$19 000.  The District also exempts EVs from its excise tax. Which varies from 6 – 8% depending on vehicle weight.

Some utility companies offer special electricity rate structures for PEV owners to incentivise vehicle charging during off peak hours, generally in the eveneing. For instance, DTE Energy Michigan offers customers discounted electricity rates at off peak hours if they install a 240 volt Level 2 charger, which powers a PEV more quickly than a 120 volt Level 1 charger. The ratepayer must also install a separate meter dedicated to the PEV. Customers also have the option of paying a flat US$40 monthly fee for charging.

California implemented a ZEV mandate that required automobile companies to produce for sale a certain percentage of zero emission vehicles, such as electric and hydrogen fuel cell. By 2025, approximately 15% of all new light duty vehicles sold in the state must be wither electric or fuel cell powered.

Nine states have agreed to follow California’s ZEV mandate: Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Vermont. These ten states represent close to one quarter of the US light duty vehicle market.

Adapted from a press release by Emma McAleavey.

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