E-Mobility Market on the Westcoast

Transportation fuels rank in the top three of America’s energy use sector with a daily consumption of 20 million barrels of gasoline. Fuel consumption is especially high in California, one of the largest automobile markets in the world. Over 18 billion gallons of gasoline and diesel fuel were consumed in 2010 in California. This produced 200 million tons of greenhouse gas emissions, comprising 36% of total US emissions. Notwithstanding, California continues to be one of the most progressive states in terms of CO2 emissions policies. With rising gas prices and a struggling economy, lower CO2 emissions and fossil fuel independence have been targeted more aggressively in recent years. In 2006, the California legislature passed the Global Warming Solutions Act of 2006 (AB32) to take direct action in lowering greenhouse gas emissions. AB32 benchmarked 2020 CO2 emissions to 1990 emissions levels.

In result of the aforementioned clean air policies, e-mobility technologies and products are more popular than ever. Electric vehicle sales have grown significantly since 2010, and the Obama administration has set a goal of having 1 million plug-in electrical vehicles (PEVs) on the road by 2015. The major automobile producers are slowly incorporating electric vehicles in their portfolios. Between January and August of 2012, California accounted for 32% of US-wide electric vehicle sales (incl. plug-in hybrids (PHEV)).

Facts about electric vehicles in the U.S.:

 

  • In the first half of 2012 electric and hybrid car sales in the US remained strong. For example, year over year sales for GM’s Volt model and Nissan’s Leaf model increased 264% and 617%, respectively.
  • According to Pine Research, PEV sales will continue to grow in the US, making it the global leader by 2020. The average growth rate between 2012 and 2020 is an estimated 30%.
  • There are national incentive programs such as tax credits ranging from 1,000 to 7,000 USD per vehicle purchase, depending on size and type.
  • Another market driver is the Corporate Average Fuel Economy (CAFE), which requires automobile companies to increase the average fuel efficiency of their light vehicles fleet by 2025.
  • California in particular has seen growth in this area thanks to the high number of potential buyers and relatively high fuel prices. California’s big cities (Los Angeles, San Francisco and San Diego) are among the top five cities most prepared for electric vehicles in terms of legislation, infrastructure and consumer readiness.
  • California offers some of the highest financial incentives for electric vehicles. These can then be combined with national incentives.
  • In the first half of 2011, California attracted 467 million USD in venture capital investment for electric vehicles. This accounts for a growth of 712% since 2006.
  • The California Energy Commission will provide 100 million USD per year until 2014 for clean, efficient, low-carbon alternative fuels and set up an investment plan which aims to install new charging stations and promote the development of new electric cars and more efficient batteries.
  • California is also the only state with an agency to set standards on maintaining clean air and restricting motor vehicle pollution, called the California Clean Air Board (CARB). The CARB mandates a certain proportion of PEVs to meet the required emission rules. Such standards have now been adopted by many other states across the US.
  • In 2013, the quota for Zero Emission Vehicles (ZEV) was raised. Between the model years 2018 and 2025, leading automobile companies will be required to increase the amount of emission-free light vehicles, or alternatively a mix with PHEVs, from 4.5% to 22%.
  • Other nationwide incentives include small cost perks (e.g. preferred parking), high cost incentives (e.g. infrastructure grants, more tax credits) and mandates to provide charging stations in newer buildings.
  • All these incentives anticipate a further growth of the e-mobility market, especially in California’s Silicon Valley where smart grid and energy storage firms have already formed a cluster. BMW, Mercedes-Benz, Volkswagen, Tesla, Aptera Motors, Fisker Automotive, Coda Automotive and Myer Motors, among others, all have branches and/or research and development facilities in the Silicon Valley.

Source: Roland Berger Strategy Consultants (2010): PEV Readiness Study; GTAI (April 30, 2013): Kalifornien schafft Voraussetzungen für Marktdurchbruch von Elektromobilen