In 2021, the U.S. hit a milestone: 5% of all new vehicle sales were electric vehicles.
That may not sound like much. But it’s significant because it put the U.S. on what is called an S-curve for EV adoption.
Norway, for example, hit that 5% figure in 2014 and is now at 88%. China, meanwhile, crossed the threshold in 2020 and just hit 29% last year. And now, the U.S. is experiencing the same surge in growth, with EVs comprising 12% of all new vehicle sales in 2022.
If precedent is to be believed, U.S. demand for EVs is primed to skyrocket.
“With the [Inflation Reduction Act] that was enacted last year, it has really turned the landscape from piloting and just trying [EVs] into, all of a sudden, this year, an economic scenario,” Vic Shao, president of EV charging solutions provider bp pulse fleet, remarked during a fireside chat Thursday for FreightWaves’ Global Supply Chain Week.
“It’s more cost-efficient, it’s more operationally efficient,” he continued. “The operator will save more money by converting to electric full scale, and now.”
But the question is: Do we have the infrastructure to support that transition?
Shao put it bluntly: “The short answer: no.”
Shao and bp pulse fleet are attempting to bridge the gap between EV demand and infrastructure. They work with fleet operators to stand up charging depots, implement software that automatically organizes and sequences charging sessions, and provide continued maintenance and customer support.
Roadblocks to adoption
In Shao’s view, the industry still has a long way to go.
“[Our customers are] ready to buy the vehicles now, but they can’t, because the infrastructure doesn’t exist,” he said. “We talk to hundreds of fleet operators across the country, and for the most part it boils down to three main buckets of problems.”
The first is energy costs. “If you think about it, in the gasoline or diesel world, fuel prices go up or down maybe 25% in a year. And fleet operators over time have developed a budgeting process for fuel — it’s the second highest opex right after driver labor. But with electricity, in expensive markets it’s up or down by 400% in a single day.”
That volatility is of course a major concern for operators, who will need to familiarize themselves with the swings in electricity prices in order to keep energy costs down.
The second problem Shao pointed to is that the vast majority of fleets rely on several different kinds of EVs. Chances are that you’ll never see a fleet made up entirely of Ford or Tesla vehicles, for example. But that creates problems for charging, because different EVs are compatible with different chargers.
Vic Shao: Is Charging Infrastructure Prepared For Mass Ev Adoption?
“Across hundreds of fleets, we have yet to run into a single operator that says to us, ‘We will standardize on one make and model of vehicle, that’s all we’re going to operate,’” Shao said. “It’s always a mixed operational scenario.”
Third among Shao’s concerns is reliability, in the sense that fleet operators must feel they can rely on charging as much as they rely on fuel. That means having enough chargers accessible along each route, as well as knowing when to charge and which depots have the right chargers.
“[Operators] really need to adopt a set of software tools to automate a lot of these processes in charging and integrating with their existing scheduling apps and dispatch apps so that everything is sequenced properly and everything is reliable,” Shao explained.
Are grid capacity and lithium shortage concerns overblown?
The bp pulse fleet president also dispelled a couple of common concerns around barriers to EV adoption.
One frequent worry is that the production of lithium, a core ingredient in the lithium-ion batteries that power EVs, will not keep pace with demand. Shao, though, sees the current shortage, which is expected to widen over the next decade, as a nonissue.
“There’s plenty of lithium out there. That’s really not a problem,” he opined. “We just haven’t looked.”
Similarly, Shao voiced his confidence in the capacity of the U.S. electric grid to handle the EV transition.
“Every year on U.S. roadways, about 3.1 trillion miles are driven. That requires about 1.25 trillion kilowatt-hours of energy,” he said. “Just for perspective, the grid today currently generates and consumes about 4 trillion kilowatt-hours.”
So, if each of the 260 million vehicles on U.S. roads today went electric, in total they would add about 1.25 trillion kilowatt-hours to the grid, or about 31% more energy.
“In other words, it’s actually not a heavy lift,” Shao said. “Absolutely doable.”
The bigger challenge, he said, will be expanding charging infrastructure to provide accessible coverage to the entire country. Some operators tell him and bp pulse fleet that it can be difficult to locate charging depots, particularly on highways. And sometimes charging bays are in locations where drivers may feel unsafe, like a dark, empty parking lot. That doesn’t fit Shao’s vision.
“I think there is a significant amount of room for improvement in the charging experience, and that’s what bp pulse aims to change,” he explained. “We’re trending toward large-scale, fast-charging depots at very conveniently located locations across the U.S. That’s the goal, that’s the ambition.”