Today’s post is co-authored with Fiona BurligJames Bushnell & David Rapson.

It’s hard to overstate how different the vehicle market will be in 2035 if automakers like General Motors and Volvo stick to their plans to produce mostly electric vehicles (EVs) and stop selling gasoline-powered cars. EVs have been anointed as the replacement technology, but have a long way to go, comprising less than 1% of the vehicle fleet today.

Meeting these lofty goals without imposing serious costs on consumers will require EVs to serve as close substitutes for gasoline cars. But is this the case so far? That’s an important question to answer as California leads the way on this transition and the Biden administration signals its intention to make the shift to EVs nationally. Yet the truth is we are far from understanding how much it will cost to fully transition to EVs.

One way to start to answer this question is to look at how much people are driving their EVs. If households are putting as many miles on their EVs as on their gas-guzzling counterparts, this is a good sign for the EV revolution. On the other hand, if households only drive their EVs sparingly, it might be an indication that current EV technology simply isn’t as good. That could signal more innovation will be needed before consumers will make that switch en masse, or else the switch away from gasoline could be more costly than we hope.

Despite the importance of this question, it turns out to be surprisingly hard to gather comprehensive data on how much EVs are driven (something we have lamented before!). Some researchers have used survey evidence, but these results come from people who are particularly excited to talk about their new EVs and may not represent average drivers. Even California policymakers are choosing to rely on just a few hundred households that have installed a dedicated electricity meter for their EVs to guess the behavior of hundreds of thousands of EV drivers. These meters are costly to install, so the households that install them probably don’t represent average drivers. The financial stakes for the economy are real: these estimates of EV electricity consumption feed into infrastructure planning and determine how Low Carbon Fuel Standard credits are allocated.

Continue Reading at Energy Institute at Haas…

Areas of Focus: Energy Markets
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Energy Markets
Well-functioning markets are essential for providing access to reliable, affordable energy. EPIC research is uncovering the policies, prices and information needed to help energy markets work efficiently.
Transportation
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Transportation
Mobility is central to economic activity. Yet, a lack of fuel diversity and continued demand growth have made the transportation industry a major contributor to global pollution and carbon emissions....