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California, for example, offers EV buyers
an instant rebate of up to $2,500, with some
income limits, while the new fee will cost
buyers $100 per year. At this point, their
greater numbers mean high-efficiency ICE
vehicles are having a far bigger impact on
falling gas-tax revenues than EVs. However,
the fact that EVs use no gasoline at all is putting them in legislators’ crosshairs.
“It might be much easier to say an EV
never uses gasoline, so let’s tax electric
vehicles,” Dumortier said. “From a politi-
cal perspective, it’s probably much more
In the long run, Dumortier believes falling gasoline use
across the board will require road-funding mechanisms that
detach revenues from fuel consumption.
“The current taxing scheme isn’t sustainable,” he said. “The
person using the road more should probably pay more.”
He said an alternative approach could be a registration fee
that varies with actual miles driven.
The cost of deploying public charging stations is another
potential hurdle to cross should EV sales begin to hit BNEF’s
forecasts over the next decade. Of special note are the direct
current fast chargers (DCFCs) that allow EV owners to
recharge in 20–30 minutes. Unlike the more residential-style
Level II charging equipment one might see at a shopping mall
or commercial office building, DCFCs draw a large amount
of electricity—currently 50 kilowatts—during a brief period
of operation. These periodic spikes can lead to exceptionally
high electric-utility demand charges for equipment owners,
especially if one of the few times a month the equipment might
currently be used falls on a peak-demand period.
This added demand-charge expense could pose a major
roadblock to ambitious EV-deployment forecasts, said Chris
Nelder, a manager with Rocky Mountain Institute’s Electricity
Group and co-author of a recent study on the issue for EVGo,
operator of the largest U.S. publicly available DCFC network.
For the study, Nelder and fellow researcher Garrett Fitzgerald analyzed data from EVGo’s 230 DCFCs in California and
found that demand charges could be responsible for more
than 90 percent of a station’s total electricity costs. If such
rate structures aren’t addressed, they could hinder broader
DCFC development, which could frustrate EV owners looking for a recharging experience as convenient as a gas station
for ICE vehicles.
“If you imagine a future that follows a gas station model,
then DCFC becomes very important,” Nelder said. “Especially
for high-density, high-traffic areas—places with a lot of traffic
and a lot of turnover.”
In the report, “EVGo Fleet and Tariff Analysis,” Nelder and
Fitzgerald argue the future success of DCFC networks will
require a utility rate structure tailored to their unique load pro-
files. Standard demand charges are added to the utility bills paid
by commercial and industrial customers and are based on the
highest 15 minutes of a facility’s demand over the course of a
month. Generally, such buildings present a fairly consistent load,
so the demand charge can encourage owners to improve overall
efficiency. DCFC load profiles spike steeply when the equip-
ment is in use, then drop to near zero once charging is complete.
“A spiky load with a 2-percent utilization rate should not
be penalized for drawing 50 kilowatts for one hour a month,”
Nelder said. “The DCFCs are being forced to pay more than
their fair share for meeting that load.”
In place of a demand charge, Nelder supports a variable
electricity rate based on time of use. If this rate were reflected
in the price an EV owner paid to recharge, it could encourage
greater use in low-demand periods. Both Southern California
Edison and San Diego Gas & Electric have proposed such rate
structures that are specific to the needs of their territories.
There is still time to address the policy questions an EV fleet
will raise in a nation whose fortunes have, in large part, been
built on petroleum. Even McKerracher recognizes that BNEF’s
prediction of EVs grabbing almost a quarter of all vehicle sales
in a little over a decade is difficult to believe.
“There are still a lot of people who disagree, but there is
much more optimism around EVs than there was a few years
ago. We’re not the only ones raising it up,” he said.
Economic and political forces, including dramatic battery
price reductions and a growing global policies promoting zero-emissions vehicles, are certainly lining up in the market’s favor.
Now, it’s only left to see if car buyers will start lining up as well.
“That’s the single biggest question hanging over the market,” McKerracher said.
RO SS is a freelance writer and editor who has covered building
and energy technologies for a range of industry publications and
websites for more than 25 years. He specializes in building and
energy technologies, along with electric-utility business issues.
Contact him at firstname.lastname@example.org. S H
If you imagine a future that follows a gas station
model, then DCFC becomes very important.
Especially for high-density, high-traffic areas—
places with a lot of traffic and a lot of turnover.
—Chris Nelder, Rocky Mountain Institute’s Electricity Group
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