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How can governments stimulate electric vehicle (EV) markets? Our research over the past year in the United States at both state level and city level shows that consumer incentives are a key driver for the early EV market. States and cities that offer more incentives to EV drivers are rewarded with higher EV sales.
However, there are a few outliers to the general pattern, and Oregon is one of the most interesting. It is one of the leading U.S. states for EV sales, over 1.5% of the new-vehicle market in 2014 – about double the U.S. average. But it offers no subsides, and the only state-level incentives (that is, in addition to the $7,500 U.S. federal tax credit for purchasing an EV) are a small tax credit for home chargers and an exemption for emissions testing for EVs. The other states with EV sales shares over 1.5% have attractive incentive packages: in 2014 California, Georgia, and Washington all offered sizeable tax credits or rebates. California and Hawaii allowed EV drivers carpool lane access to avoid some of the country’s worst traffic congestion. Hawaii also offered free and dedicated parking, a valuable commodity in crowded Honolulu.
Average electric vehicle policy incentive for consumers and percent of new vehicles that are electric vehicles in calendar year 2014 (2014 electric vehicle registration data provided by IHS Automotive)
What makes Oregon different? For one thing, Oregon has a LOT of publicly available EV charging stations – a factor we hadn’t included in the analysis of state incentives. The Department of Energy reports that Oregon has over 400 public charging stations and over 950 individual charging outlets. Many of these are clustered in Portland, which is the highest per capita density of chargers in the 25 largest U.S. cities. In fact, the Portland metropolitan area has 6 times the density of DC-fast electric fast charging infrastructure per capita than the average major US metropolitan area.
Charger availability is worth a lot, even if mostly EV drivers predominantly charge up at home. High public charger density means knowing you’ll be able to charge your car when you need it, even if you don’t have a private charger at home. It means you can go on road trips outside the range of your battery. And it means you don’t have to feel nervous about running out of juice unexpectedly. One way to estimate the value of a charger network is to calculate the replacement cost, based on the assumption that if EV drivers didn’t have a dense charging network available, they’d have to rent a gasoline car every time they wanted to drive more than ~100 miles. The more chargers are available, the more EV drivers will be able to go about their usual business. In our city report, we estimated that the effective financial value of access to the Portland charging network is as high as $2,000 over six years of vehicle ownership—the most of any major U.S. city.
Charger density is the main thing that differentiates Oregon, but there are others as well. It has innovative outreach approaches and an excellent map of the charging network. Utilities (Pacific Power and Portland General Electric) are involved in educating the public about EVs. Oregon communities have been active with local ride-and-drive and outreach events, as well as in deploying electric vehicle within public fleets. Car manufacturers might, in addition to those factors, also be influenced by Oregon’s adoption of the Zero Emission Vehicle (ZEV) program requirements. And Oregon’s mild temperatures (not too cold, not too hot) are ideally suited to EVs because extreme temperatures can reduce vehicle range.
Oregon’s status as a leading EV state will make it easier to meet its ZEV goals and will also increasingly contribute to its Clean Fuels Program (CFP). The CFP, like California’s Low Carbon Fuel Standard (LCFS), mandates a reduction in the carbon intensity of road transport fuels over time. Electricity in vehicles counts as a very low carbon fuel, especially in Oregon where the power mix draws heavily on hydro and renewables. An Oregon electric vehicle emits about 60% lower carbon emissions than a gasoline vehicle. So the more EVs that enter the fleet, the faster Oregon’s fuel providers can comply with the low-carbon fuel policy. Not only is Oregon on the right track to helping to push more EVs into its fleet, but it’s also electrifying its fleet’s fuel mix and meeting its CFP goals.
If Oregon were to add fiscal incentives to the array of measures that its state and local governments are using to promote EV sales, their share of the new car market might perhaps match the uptake in California or leading markets in Europe. Even without such incentives, Oregon demonstrates that a lot can be done to kickstart the transition to an electric fleet with smart policy, infrastructure, and consumer outreach.