Building the electric vehicle market, one city at a time

The transition to an electric vehicle fleet is underway. 2015 was a big year: Global electric vehicle sales grew from about 300,000 in 2014 to well over 500,000 in 2015. Europe saw electric vehicle sales double, and China’s electric vehicle sales tripled in 2015. At this point, lithium-ion batteries have moved beyond the hype, the resulting cost reductions have the technology nearing a tipping point, auto executives are starting to view the electric driving revolution as inevitable, and electric vehicles’ low-carbon benefits grow ever clearer each year that more coal is phased out.

Yet, with all that said, the market is still young. The if, where, when, how, and why of electric vehicle market growth is just starting to come into focus. The transition will require a lot of committed actions by industry, policymakers, and consumers. We all continue to get smarter about what actions specifically are paving the way for this transition. On a global level, governments are collaborating and sharing best practices on policies to accelerate the transition to, eventually, an all-electric vehicle fleet. On a more granular level, we’re taking a very close look at local markets to see why electric vehicles are disproportionately being embraced in various places.

In our 2015 profiles of electric vehicle uptake in U.S. cities, we found that a combination of electric vehicle policy, incentives, charging infrastructure, and power utility actions is stimulating the market in major cities like San Francisco and Portland. We also found that mid-size and smaller metro areas, like San Jose and Santa Cruz are also apparently finding keys to unlock the early electric vehicle market. That work bolstered the “ecosystem approach” idea, in which many players, including state and city policymakers, charging infrastructure suppliers, electric power utilities, automakers and dealers, and consumers all fill major roles.

Where do things stand today? The map below gives a snapshot. It shows the share of new vehicles that were plug-in EVs (including all-electric models like the Volkswagen e-Golf and plug-in hybrids like the Chevrolet Volt) in 2015 for the 50 most populous U.S. metropolitan areas. We plan to explore the underlying data for the 2015 market, going deeper than our 2014 analysis in several ways. We are expanding the study scope to include smaller and mid-size cities, highlighting regional electric vehicle markets, and especially taking a deep dive into leading California cities. As the map shows, a handful of cities, especially in the west, have high electric vehicle uptake. A few California cities have electric vehicle shares 7 to 13 times the U.S. average electric vehicle share.

New plug-in electric vehicle shares in the 50 most populous U.S. metropolitan areas in 2015 (vehicle registration data provided by IHS Automotive)

As we embark upon a full update of our 2015 U.S. city analysis, we have a few hypotheses. One, unchanged from 2014, is that policy and incentives are key drivers of the early market. We also suspect that public charging infrastructure is another important market driver. The latest developments with two California utilities (Southern California Edison, San Diego Gas and Electric), Kansas City Power & Light, and Oregon’s new legislation all give a sense for what progressive electric power utilities are starting to do to support the market. In addition, increased use of electric vehicles in fleets – e.g., with the West Coast Electric Fleet initiatives and the latest in Seattle – is a direct jolt to electric vehicle sales volume and also increases consumer awareness. Actions like requiring electric vehicle-ready buildings, like Denver recently did, help ensure the right infrastructure is in place over the long-term. Also, we noticed that the U.S. Department of Transportation and Vulcan Smart Cities Challenge’s finalist list includes seven of the above cities, so we are excited to see those cities’ approaches to a future of low-carbon electric mobility.

Looking beyond the U.S., we have started musing on whether any city is emerging as the electric vehicle capital of the world. Is it one of those above? Or maybe Oslo, London, Shanghai, Paris, or Amsterdam?

We’ll see what the data say and keep you posted.