Posted on March 7, 2022 by J.B. Ruhl
The Target near our home has a 20-unit Tesla supercharger station in the parking lot. I smiled the other day as I drove past it and saw all but one charger occupied (my “tank” was full). But then I drove on and saw hundreds of conventional internal combustion engine (ICE) cars and light trucks parked or zipping around the lot. I asked myself whether that picture will look much different in twenty years. Sadly, probably not, and that’s a policy problem. Do the math.
There were over 280 million cars and light trucks registered in the US in 2020, and the number is expected to rise. A tiny fraction of them were electric vehicles (EV). The average car owner in the US hangs on to the vehicle a little over 12 years. About 3.5 percent of new car sales in 2021 were EVs, and that share is projected to reach 30 percent in 2030 (the Biden Administration is pushing for 50 percent). By then the cumulative number of EVs on the road is expected to be around 25 million out of a total near 300 million cars and light trucks. From there the charging infrastructure network capacity will be a limiting factor on how much EVs can penetrate the market.
To push the transition along, some states (California and New York so far) are pushing the transition along by banning sale of ICE cars starting in 2035 and light trucks (which are the healthy majority of new vehicle sales) in 2045. But the bottom line is that between now and then, and for a good time thereafter, millions of new ICE cars and light trucks will be put into operation each year in the US, with the average owner hoping to operate the vehicle for at least a decade. Even if EVs take over all new car and light truck sales in the US by 2050—an ambitious goal to say the least—at that time there would still be well over 100 million ICE cars and light trucks on the road. The same story can be told for semi-trucks (2 million in operation in 2020; average life of over 12 years; EV semis only recently made available in small numbers), school busses (500,000 in operation; average life of 9 years; one percent are EVs), and public transit busses (65,000 in operation; service life of 12 years; roughly 2000 EVs with projected share of 33 percent by 2045), not to mention freight locomotives and commercial jets (I had to work in planes and trains).
Obviously, if it all plays out as projected in this “natural glidepath” phase out of ICE vehicles, that’s a complication for attaining net zero in the US by 2050. We’d need to continue extracting and refining petroleum and distributing gasoline and diesel throughout the nation even well past 2050. This calls for thinking about policy interventions designed to speed up the transition (I’m putting aside the possibility of fuel technology innovations that allow continued use of ICEs with extremely low emissions).
One approach is to continue doubling down on making EV cars and light trucks more attractive by stepping up purchase incentives, increasing battery range, building out extensive charging infrastructure, and offering more affordable options. The US has recently moved into an all-of-the-above policy mode, but the price point will be key. Car manufacturers in China offer a wide array of EVs at under $10,000, an option not yet available in the US. As EVs become more affordable and available here, it’s possible that shifting social norms will move strongly in favor of EVs and accelerate demand in the US faster than current projections predict.
In addition, however, it may be necessary to decrease the appeal of buying and continuing to operate ICE vehicles. Promotional campaigns could portray EVs as socially positive and owning an ICE vehicle as a negative. More directly, penalties could include increasing gasoline taxes at the pump and increasing taxes on new ICE vehicle purchases and ICE vehicle registration renewal fees (many governments will have an incentive to do so regardless, to keep those revenue streams as EVs displace ICE vehicles). Such measures would be regressive in impact, however, raising equity concerns. ICE vehicles could be banned from urban centers, but that also could have undesirable impacts on low-income wage earners who often rely on aging used ICE vehicles for work commutes. More widespread bans would present problems for rural areas, where charging infrastructure is likely last to reach. Although some other nations (China in particular) are beginning to experiment with policies like these, public shaming, taxes, and bans have been difficult to implement in the US in other contexts, and cars and trucks are unlikely to be an exception.
A softer touch would be to make it easier for people to get out of their ICE vehicles and into an EV. For example, Senator Schumer and the Biden Administration have suggested resurrecting the “cash for clunkers” program the Obama Administration operated in 2009, in this case to support turning in older ICE vehicles and purchasing a new or used EV. But that could run up a hefty price tag and needs to be designed carefully to target the worst vehicles to make it a cost effective program (see here for more analysis).
Stepping back from the US, the global picture has seen some impressive EV gains in many nations across many vehicle types, but there are still gaping holes. The US and EU export millions of aged ICE vehicles each year to nations in Eastern Europe, Africa, and elsewhere that have little hope of large-scale EV adoption by 2050. Should we ban those exports? Whether new or used, people in those nations will be purchasing and using ICE vehicles long past 2050 and their governments are unlikely to impose bans or taxes until EVs are a viable alternative. Even China, where EVs currently account for close to 20 percent of cars in operation, has over 280 million ICE cars on the road. Projections vary, but there could be close to 1 billion ICE cars and light trucks still in operation around the globe in 2050 (there are roughly 1.4 billion in operation today). That’s not net zero.
In short, without policy interventions or technological breakthroughs, the natural glidepath we are on in will leave well over 100 million ICE vehicles using gasoline and diesel on the road in the US in 2050, and close to 1 billion globally. My Target parking lot would have more EV charging stations then, but it would also have a lot of ICEs parked and zipping around. Getting affordable EVs into the US market will be essential even to stay on the natural glidepath. From there, cheerleading EVs may not be enough—we may need to get tough on ICEs. Talk about a bumpy road ahead…