Electric Vehicle Adoption Requires More Effective Public and Private Management – State of the Planet

Last week, the EPA set new and more rigorous emission targets for heavy vehicle fleets, just as earlier it set new targets for passenger vehicles. These rules are designed to accelerate the pace of electric vehicle adoption. Republicans in Congress and on the campaign trail oppose these efforts, and if President Biden loses his bid to be re-elected, we can expect these new rules to die before they are implemented. If Biden is re-elected, the rules will influence the rate of electric vehicle utilization, but public policy alone is not enough to end the use of the internal combustion engine. New technologies, infrastructure, and lower prices will also be needed, and that is as much a management challenge as a policy challenge. If the management challenge is not met, and auto companies are unable to meet the new standards, even a re-elected Biden team will negotiate a slower rate of compliance with the new rules.

A cautionary tale is the slow pace of the construction of federally-funded charging stations. According to Shannon Osaka of the Washington Post:

“The Bipartisan Infrastructure Law, which Biden signed in November 2021, included $7.5 billion for EV charging. Of that, $5 billion was allocated to individual states in so-called “formula funding” to build a network of fast chargers along major highways in the National Electric Vehicle Infrastructure, or NEVI, program. But after two years, that program has only delivered seven open charging stations with a total of 38 spots where drivers can charge their vehicles, according to a spokesperson for the Federal Highway Administration.”

The problem is the slow process of approving state charging proposals and the fact that the states have never built charging stations or requested funding to build them, and our risk-averse federal Department of Transportation (DOT) does not want to fund charging stations that don’t work well. Of course, the states have long applied for grants from DOT, and the Department has lots of experience in grant-making, but speed did not seem to matter to these federal officials. The grant-making process for states was long and cumbersome, and after two years, billions of dollars still remain unspent.

While government funding for charging stations will eventually result in more chargers brought online faster than we’d see with an absence of federal money, private charging stations will be a more important element of a national vehicle charging system. The federal government never had to fund gas stations, they developed due to market demand. We will see the same phenomenon in private charging. While selling gasoline is a profitable business, selling Slurpees and lottery tickets is far more profitable. Since charging a vehicle takes more time than filling a tank with gasoline, the businesses that attract customers with charging stations will be sit-down cafes, big-box stores, and supermarkets. Gas stations and convenience stores may find it more difficult to install charging stations because they sit on much smaller pieces of land, but some will adjust. So far, the pace of charging station installation has been slow. Brian Vines of Consumer Reports recently wrote that:

“Physical locations—particularly big-box stores like Ikea, fast-food chains, and other retailers in shopping centers with vast parking lots—make excellent candidates for helping build our electric future for several reasons. They are omnipresent in the U.S. and are often centrally located near highways. Huge numbers of Americans arrive by car to shop or dine at them. And while some of those locations offer fast chargers, allowing car owners to fully recharge while doing their shopping, even lower-powered options let people add a few more miles each time they stop to do some shopping. But the number of stores that have installed EV chargers in their parking lots to date is less than electrifying, according to a first-of-its-kind investigation from Consumer Reports, which examined retail store EV charging infrastructure across the country to reveal the sector’s leaders and laggers. CR’s investigation found that only 1 of every 14 big-box store locations, 1 of every 15 grocery stores, and 1 of every 40 department stores has a charger. And often…they typically have, on average, only two to five chargers per location.”

While the overall pace is slow, Tesla has opened its charging network to non-Teslas and Walmart is very serious about expanding its charging network. Last April, Walmart announced that:

“By 2030, we intend to build our own EV fast-charging network at thousands of Walmart and Sam’s Club locations coast-to-coast. This would be in addition to the almost 1,300 EV fast-charging stations we already have available at more than 280 U.S. facilities. With a store or club located within 10 miles of approximately 90% of Americans, we are uniquely positioned to deliver a convenient charging option that will help make EV ownership possible whether people live in rural, suburban or urban areas.”

Regulations requiring automobile manufacturers to gradually shift to electric vehicles (EVs) have the effect of encouraging private investment in charging infrastructure. This, in turn, will reduce the “range anxiety” that is an early obstacle to the rapid expansion of the EV market. Currently, about 80% of EV charging is taking place in the driveways and garages of private homes. Still, many of those who are holding off purchasing electric vehicles are waiting until they see as many charging stations as gas stations.

While EVs have fewer moving parts and require less maintenance than internal combustion-powered vehicles, scarce parts and a lack of skilled labor have made some repairs costly and slow. Problems were reported this past winter when some EV batteries were unable to hold a charge during extreme cold weather events.

These issues will need to be addressed if EVs are to rapidly gain consumer confidence. In essence, the rapid adoption of electric vehicles is not so much a policy problem but an issue of public and private management. The private sector needs to improve battery technology, reduce prices, and scale up its service network. The public sector needs to get its subsidies into the economy faster and with better targeting.

We will see continued political noise around EV adoption but as I wrote in February:

“Just as the promotion of EVs through regulation has a limited impact, political opposition to the technology also won’t do much either…Electric vehicles powered by renewable energy are a central element of a global effort to reduce greenhouse gasses. I believe this transition has begun, but it cannot be wished or regulated into existence. It will take new technologies and lower prices, which are already on the way. Batteries, renewable energy and the vehicles themselves are improving. A tipping point will come—we just don’t know when.”

The need for improved organizational management and coordination is often the central problem when technologies either fail or do not meet our expectations, though the media often focuses on politics or other forms of more visible noise. As we see with Boeing’s air safety issues, the real problem appears to be management pressure to move the assembly line faster than feasible. Boeing management has been willing to incur a high level of risk to succeed in achieving its goal of higher rates of profit. In the case of the Department of Transportation and building charging stations more quickly, paradoxically, the issue is a lack of willingness to incur a reasonable level of risk. In both cases, management needs to focus more on the real work of operational management and learn what can be done more rapidly and what needs to be slowed down. Regulation can help accelerate the adoption of EVs, but more effective public and private management is needed to build better EVs and ensure that charging them is easy and convenient.

Views and opinions expressed here are those of the authors, and do not necessarily reflect the official position of the Columbia Climate School, Earth Institute or Columbia University.

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