COLLAGE OF ENGINEERING
BHUBANESWAR
Presented by –
Swapnil Naik
Aditya Kumar Mandal
Mukesh Mallick
Branch - Electric
Table of Contents
A Once-in-a-Century Moment for the Transportation Industry ..................................................... 3
State of Play on U.S. Investments in Transportation Electrification................................................ 4
Ensuring Equity and Affordability in Transportation Electrification ................................................ 6
Conclusion ...................................................................................................................................... 8
References ...................................................................................................................................... 9
A Once-in-a-Century Moment for the Transportation
Industry
The transportation sector is electrifying at unprecedented rates with more passenger vehicles, trucks,
buses, and even bikes and scooters hitting the road every day. All told, transportation electrification
is a multi-trillion-dollar industry, but the United States has been slow to capitalize on this market
growth until recently. The United States represented just 4.8 percent of the global electric vehicle
(EV) market in 2021 and the transportation equipment sector saw the international trade deficit
balloon from $15 billion in 2009 to a $141 billion that same year [1, 2]. As other countries ramped up
their EV manufacturing and deployment, the United States conceded jobs, trade revenue, and other
economic benefits, not to mention global recognition as a sector leader, to Europe, China, and other
parts of the world.
There are signs, however, that the United States is beginning to close the gap and grow its domestic
EV market. At the end of 2022, multi-billion-dollar EV battery and assembly plants were announced
in Ohio, Georgia, and South Carolina, each expected to create thousands of local jobs [3]. EV sales
during the first quarter of 2023 were 54 percent higher compared to the same time period in 2022.
At 8.8 percent, the first quarter of 2023 set a record high market share value for domestic light-duty
EVs, the seventh quarter in a row to set such a record, see Figure 1 [4].
Figure 1: EV growth in the United States
New federal policy and funding programs have spurred a resurgence in the U.S. EV market.
Investments from the 2021 Infrastructure Investment and Jobs Act (IIJA) and the 2022 Inflation
Reduction Act (IRA) have encouraged the expansion of EV manufacturing and the greater
deployment of EVs and charging infrastructure. The IIJA alone includes $50.3 93,000 EV-related
manufacturing jobs and $95.6 billion investments have been announced [6, 7]. The IRA introduced
numerous EV-specific tax credits which, when combined with other direct investments, add up to as
much as $100 billion [8].
State of Play on U.S. Investments in Transportation
Electrification
The United States has a storied history of innovation in transportation, going back more than a
century to do the days of Henry Ford and the Model T. In order to continue to lead in the multi-
trillion-dollar global transportation industry, it must be at the forefront of all facets of transportation
electrification, including battery research and development, charging infrastructure deployment, and
vehicle and battery manufacturing.
The EV transition is well underway. Sales of internal combustion engine vehicles sales peaked in 2017
and the EV share of global passenger vehicle sales is expected to rise to 30 percent by 2026 [9]. The
growth of the global EV market presents an opportunity to create tens of thousands of American jobs
if U.S. manufacturers are able to boost their share of domestic auto and auto parts sales as shown in
Figure 2 [10]. By embracing the building and selling of EVs and their components, and creating a
favorable environment for domestic EV adoption, the United States can secure its position in the
global market and drive economic growth.
Global manufacturers and battery suppliers have committed nearly $1 trillion to electrifying
transportation. Of these investments, more than $200 billion is targeted at the United States with
three-quarters of those funds being committed since 2021. In addition, investor-owned electric
utilities have been approved by regulatory commissions to invest $5.3 billion in transportation
electrification, largely to deploy charging infrastructure.
Continued and expanded investments from the private sector, including the regulated utility industry
will be essential. In the case of electric utilities, their engagement is necessary to ensure that the
electrical grid can reliably accommodate the electricity demand changes that would result from
widespread EV adoption.
Government investment also increased substantially in the last two years, thanks to two new federal
laws. The Infrastructure Investment and Jobs Act of 2021 allocated over $50 billion to programs that
advance EV infrastructure and manufacturing. The law included a combined $7.5 billion for the
National Electric Vehicle Infrastructure and Charging and Fueling Infrastructure Discretionary Grant
programs to create a nationwide network of half a million EV chargers by 2030 [11]. This is in
addition to over $1.6 billion of state-led investment in public charging infrastructure from state-run
programs and the government settlement with Volkswagen in 2016 [12]. This massive influx of
investment in transportation electrification has increased the total number of EV charging ports by
350 percent in the last five years, reaching nearly 155,000 in May 2023 [13].
On top of funding infrastructure development and encouraging passenger and commercial EV
purchases, the federal government has ramped up investments in electrifying public transportation.
Fiscal Year 2022 saw over $900 million awarded through the new $5 billion EPA Clean School Bus
grant program to fund the replacement of 2,490 fossil-powered school buses with electric or low-
emission buses [17]. In addition, the Federal Transit Administration’s and Bus Facilities Program was
allocated $5.6 billion in part for transit decarbonization grants through the Low or No Emission Grant
Program [18, 19
Ensuring Equity and Affordability in Transportation
Electrification
Electrifying the transportation sector holds great potential to alleviate disproportionate burdens on
low-income, underserved, and minority communities. Transportation is the largest contributor to
greenhouse gas emissions across the United States, but the pollution distribution is unequal and
concentrated near the source [20, 21]. As the nation’s highway system was built out during the 1950s
and 1960s, major highways and industrial routes were intentionally built through and around low-
income and non-white communities. Not only did this destroy neighborhoods and segregate poor
and non-white populations from more affluent parts of town, but it also placed these communities
on the front lines of transportation-related emissions [22]. These communities continue to bear the
brunt of carbon, smog, and diesel emissions and have higher rates of asthma, lung cancer, and heart
disease [23]. Electrifying not just cars but buses, trucks, bikes, and scooters, can reduce the localized
impacts of transportation-related emissions on underserved communities.
Lower-income communities also have a disproportionately higher cost burden for transportation,
spending over a quarter of their income on transportation compared to higher-income groups, who
spend closer to one-tenth [24]. EVs provide an opportunity to alleviate some of that cost burden and
decrease transportation-related costs, especially over the lifetime of the vehicle. Given the new tax
credits offered by the IRA, buying an electric vehicle is more affordable than ever before and allows
lower-income consumers to receive a credit at the point of purchase [25]. However, it is in
maintenance and operation where the biggest cost-savings can be felt. Given that EVs do not require
services such as transmission repairs or oil changes, the average driver can save as much as four
cents per mile on maintenance costs [26]. According to a study done by Consumer Reports, which
compared popular EVs to their internal combustion engine counterparts, EVs showed a lifetimes
savings of between $6,000 and $10,000 for new cars and an even higher savings for used vehicles
[27].
There is variability in terms of fueling costs, especially as both gas and electricity prices have
continued to fluctuate over the past few years. When the price of gas broke records in March 2022,
EV owners were saving as much as 17 cents per mile, or $2,600 per year [28]. There is some concern
that, as gas prices go down and electricity prices go up, that savings will shrink, if not disappear
altogether [29]. However, gas prices fluctuate more wildly compared to electricity prices which,
although vary geographically, tend to be more consistent over time, as shown in Figure 4 [30]. That
stability could be valuable to lower-income populations who cannot or have not budgeted for the
potential sticker shock of record-breaking gas prices.
4: U.S. average cost comparison for 100 miles of driving range for gas versus electric
Public policy is critical to ensuring that EVs and charging infrastructure are expanded equitably and
deliberately to quickly and effectively benefit communities that currently suffer the most from
transportation pollution and cost burdens. Justice40 is a federal initiative which requires 40 percent
of climate and clean energy benefits be received by disadvantaged communities [32]. The National
Electric Vehicle Infrastructure Program (NEVI), which grants funding to states for the purpose of
building an interconnected EV charging network, is one of the first Justice40 programs to be
implemented. In submitting their NEVI plans, states demonstrated how disadvantaged communities
will be included in and directly and indirectly benefit from the electric vehicle transition.
Similarly, the investor-owned utility industry recognizes the market opportunity for growth within
previously underserved communities and is targeting new projects and investments in these
neighborhoods. Because public engagement is built into the regulatory process, communities have
representation and can influence where funding is directed. Atlas has tracked over $2 billion from
electric utilities that is directed towards, primarily, EV charging infrastructure in underserved
communities [33].
Low-income, non-white communities suffer the most from localized transportation-related pollution
and spend an inordinate proportion of their income on transportation-related expenses. As such, it is
this population that has the most to gain from electrifying all on-road vehicles. However, to ensure
that that gap is closed and that these benefits are realized, policy, investment, and public
engagement will need to prioritize and target these communities not eventually but, in many cases,
now.
Conclusion
The transition to electric vehicles presents a significant economic opportunity for the transportation
industry in the United States. By leading in EV development, infrastructure, and manufacturing, the
United States can secure its leadership position in the global auto industry of the future, which is
quickly approaching. Landmark policies such as the Infrastructure Investment and Jobs Act and the
Inflation Reduction Act, have already driven significant public and private investments in EVs and
charging infrastructure, putting the nation on track to rapidly increase EV adoption as the United
States tries to catch up to Europe and China.
The transition to electric transportation can also address stubborn issues of equity and affordability.
Low-income and minority communities, which have historically borne the brunt of transportation-
related pollution, and the poor who spend upwards of 27 percent of their income on transportation
stand to benefit significantly from electrification [34]. The Justice40 Initiative and federal grant
programs aim to ensure that EVs and EV infrastructure are expanded equitably, with a focus on
directing investments and benefits to such communities. Investor-owned utilities are also targeting
projects and investments in underserved neighborhoods, paving the way to improve quality of life in
these areas. However, closing the gap and ensuring that historically underserved communities fully
benefit from the transition to EVs will require continued prioritization, targeted policies, increased
investment, and meaningful public engagement. By addressing these challenges and embracing the
economic opportunities of EVs, the United States can deliver on the promise of a sustainable and
equitable transportation future.
References
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