As e-mobility accelerates, can utilities move EVs into the fast lane?

Authors
Marc Coltelli

EY Americas eMobility Energy Leader

Innovative, focused energy professional with more than 25 years’ experience. Passionate about turning strategy into reality.

Andrew Horstead

EY Global Power & Utilities Lead Analyst

Commercially focused research professional. Experienced thought leader in global power and utilities.

Felipe Smolka

Partner, EY Americas Automotive eMobility Leader

Helps clients unlock the benefits of eMobility. Connected experiences enthusiast: electric vehicles, connected cars and the connected world at large. Fluent in English, Portuguese and Spanish.

7 minute read 18 Jul 2022

Four actionable steps utilities can take to drive EV adoption.

In brief

  • We must get the fundamentals right today and build infrastructure that can accommodate 85 million electric vehicles (EVs) in the US and Canada by 2035.
  • The future of e-mobility and associated wins for customers and the environment will be found in collaborative partnerships within an extended ecosystem.
  • Success will hinge on compelling customer incentives and the electrification of vehicles that appeal to the everyday needs of consumers in the US and Canada.

Change is good, but only if you embrace it. Utility executives across the US are now faced with the double duty of modernizing the nation’s century-old power grid and doing so amid the greatest incoming demand for energy the industry has ever seen. By 2035, more than 85 million electric vehicles (EVs) will hit the roads in the United States and Canada,¹ requiring not just a major system-wide upgrade of the grid itself, but a building out, coordination and installation of critical charging infrastructure street by street, state by state and beyond.

As utility leaders consider this future, momentum and pressure is on all sides in the form of increasing collaboration between automakers, battery manufacturers, and both private and public sector initiatives driving change forward. On the heels of the EY EV Acceleration report that brought together insights from some key executive leaders of the e-mobility ecosystem, let’s take a closer look at what the pivotal role of utilities should be, and the other factors needed to speed change. What are, in short, the actionable steps that utility executives need to embrace in the road ahead?

Electron of Traffic light
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Chapter 1

Help remove the hurdles to infrastructure

Utility companies are being called to answer the need for charging infrastructure.

Three major roadblocks are standing in the way of more rapid EV adoption. The first two, the real road readiness of EV vehicles and consumer concern over battery range are being addressed quickly by advancing technology and improved design, but utilities are holding the keys to a solution for the third. The ability to charge any form of EV quickly, easily and reliably – and in urban, rural and radically different landscapes – hinges solely on charge point operators (CPOs) being able to secure permission to install the critical infrastructure required and for grid operators being able to provide the tens of thousands of standardized, reliable connections across state lines and North America.

The whole premise of e-mobility stands on a modern, safe and resilient grid, supported by digital capabilities to mitigate the impact of EVs on every local network. In the evolution of transport, utilities and their power distribution networks are the lynchpins and need to begin, or fast track, open planning dialogs with all infrastructure players as well as other members of the e-mobility ecosystem. This will also require the alignment of utility leadership around a coordinated vision for the future as well as full acceptance of the pace and scale of investment now required.

Electric car charging station in Wuxi
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Chapter 2

Innovate at grid level

A modern grid will support the acceleration of EV adoption.

Lessons learned from European EV adoption indicate North American power needs will reach 432.2TWh in 2035, placing enormous demand on the already-outdated grid, causing congestion and ultimately bottlenecking the pace of e-mobility rollout. In Canada, EY analysis estimates that electricity demand for EV charging is expected to account for 2.4% of overall power demand in 2030, and in the US, electricity demand from EVs is expected to for 10% of overall US power demand. In the United States, $7.5b of government funding and incentives has been earmarked for grid upgrades and a further $3b in advanced battery supply chains to help effect 50% EV adoption and the installation of 500,000 charging stations by 2035.2,3 But that alone won’t be anywhere near enough, and utilities will be required to invest expertise, funds and resources to deliver real and effective momentum.

North America lags behind Europe in EV adoption because change there is mandated, and acceptance is increasing. There is a huge opportunity for US utilities willing to drive that change.
Marc Coltelli
EY Americas eMobility Energy Leader
Young woman charging an electric vehicle
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Chapter 3

Create consumer confidence and access

For EV adoption to accelerate, the modern grid should be able to support public charging stations.

According to EY analysts, the United States will require a nine-fold increase in today’s volume of charging stations to meet coming demand as well as much greater access for all communities. At present, most EV charging takes place in homes, where vehicles tend to park for long durations and are charged slowly. Across the United States, 88% of EV owners have access to residential charging, but this varies significantly by region and property type.4 According to the National Renewable Energy Laboratory (NREL), 70% of detached single-unit households have access to home charging but access plummets to 10% to 20% for rented apartments.5 By 2035, when 18% of the vehicle stock is expected to be electric,6 the majority of EV charging is still likely to be done at home, but demand will soon outpace access and utilities will need to expand access.

As the EV market races past early adopters – typically high-income, single-family homes with access to off-street parking – we will see demand for more diverse charging access everywhere. Rentals, apartment buildings, condos and increasingly destinations like malls, community centers, movie theaters and restaurants will all expect to be able to offer charging access – and consumers will expect, if not demand it. It’s up to utilities to plan for increased access and a true integration of charging stations into all communities, regardless of socioeconomic factors or even population density.

As EV and battery design continue to improve rapidly and dramatically, consumer adoption is going to grow, and US utilities will become pivotal to making the EV future a reality.
Felipe Smolka
EY Americas eMobility Automotive Leader

Ultimately success driven utilities planning investment in the grid must also factor consumer confidence and convenience. A journey by EV must start with an inexpensive, easily charged vehicle at home and then provide complete consumer confidence thanks to a network of standardized, reliable and quick charging options anywhere along the route. To deliver that, utilities must make the investments in not only grid upgrade and technology, but the design and strategic implementation of charging networks that make powering the millions of consumers EVs – and commercial fleets – as easy today as it is stopping at the gas station. According to EY analysts, that will mean increasing charger network volume to 3 million stations, with many, if not all, being DC fast charging (DCFC) to meet consumer convenience needs. Utilities must take the driving seat for this infrastructure development, of course, but doing so will also be helpful in managing both the influx of private sector charging network investment as well as, in the future, competition from other providers.

  • Show references#Hide references

    1. This report focuses on battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), i.e., EVs that are powered from the grid.
    2. “President Biden’s Bipartisan Infrastructure Law,” whitehouse.gov, site accessed 2 June 2022.
    3. “President Biden, U.S. Department of Transportation Releases Toolkit to Help Rural Communities Build Out Electric Vehicle Charging Infrastructure,” U.S. Department of Transportation, 2 February 2022.
    4. Gordon Bauer and Chih-Wei Hsu, et al, “Charging up America: assessing the growing need for U.S. charging infrastructure through 2030,” theicct.org, July 2021.
    5. Yanbo Ge and Christina Simeone, et al, “There’s No Place Like Home: Residential Parking, Electrical Access, and Implications for the Future of Electric Vehicle Charging Infrastructure,” National Renewable Energy Laboratory, October 2021.
    6. “Number of vehicles in operation in the United States between 4th quarter 2017 and 4th quarter 2021,” statista.com, March 2022.

Utilities accelerating eMobility

EY research is based on interviews with leading executives from automotive, utilities, fleet management and charging infrastructure.

Read the report here

Summary

The success of e-mobility depends on widespread collaboration between utilities, automakers, battery manufacturers and the myriad of commercial developers and city planning authorities state by state, region by region. As the need for collaboration accelerates and government mandates drive action, there’s an opportunity for every utility to play a pivotal role in advancing EV adoption as well as the complex issues of infrastructure coordination. While the e-mobility ecosystem may represent a wide diversity of parties with varying interests, the goal of each is the same: speed the EV future today.

About this article

Authors
Marc Coltelli

EY Americas eMobility Energy Leader

Innovative, focused energy professional with more than 25 years’ experience. Passionate about turning strategy into reality.

Andrew Horstead

EY Global Power & Utilities Lead Analyst

Commercially focused research professional. Experienced thought leader in global power and utilities.

Felipe Smolka

Partner, EY Americas Automotive eMobility Leader

Helps clients unlock the benefits of eMobility. Connected experiences enthusiast: electric vehicles, connected cars and the connected world at large. Fluent in English, Portuguese and Spanish.