Electric Vehicles
Xiaomi Makes a Savvy Expansion From Smartphones to Electric Vehicles
Lei Jun wants to take the Xiaomi brand on the road.
Xiaomi Corp.’s plans to move into electric vehicles are big, bold and brave. They’re also entirely in keeping with the smartphone company’s business model of developing a brand rather than the hardware it sells.
After announcing earlier this month that it will join the long list of those wanting to make cars, the Beijing-based company on Wednesday put a price tag on them: as low as 100,000 yuan ($15,000). According to the South China Morning Post, founder Lei Jun said that the first model will be either a sport utility vehicle or a sedan — ending any speculation that it could have been a sportscar or motorhome.
I’m stating the obvious when I predict that Xiaomi won’t be rolling any cars off its own production lines. In other words, it’s likely to embrace the looming business model of contract vehicle manufacturing — one that Tesla Inc.’s Elon Musk has dismissed. Yet pure outsourced smartphones were also a rarity when Lei Jun decided to turn that sector on its head.
At the time that Xiaomi entered the handset business a decade ago, it was such a pioneer that early contract partner Foxconn Technology Group didn’t quite take the company seriously. As an executive once told me, Foxconn’s sales team was unsure how to handle this unknown walk-in customer. When they found out it was headed by Lei Jun, they became eager to work with him. By training a computer scientist, he became famous for leading software maker Kingsoft Corp. and later heading up internet company UCWeb Inc. When he founded Xiaomi, the executive was a well-known angel investor and climbing up the ranks of China’s rich list.
Foxconn, meanwhile, was already making Apple Inc.’s iPhone through its Hon Hai Precision Industry Inc. unit. Its Hong Kong-listed mobile phone business, now called FIH Mobile Ltd., was stuck making devices for struggling brands like Nokia and Motorola.
Taking a gamble on Xiaomi wasn’t an obvious move for FIH at that time, but the advent of the Android operating system, cheaper phone chips, and commoditized touch screens — ditching the need for troublesome keyboards — paved the way for a fresh approach to the mobile phone business.
Xiaomi also gave up the traditional strategy of working with telecom operators and packing retail outlets with inventory. Instead, the company hung its shingle on the internet and shipped directly to consumers, allowing it to drastically cut costs and develop a more intimate relationship with buyers that fed back into development of future products. Mi Fandom got so big that some launch events attracted massive crowds and sold out products. And it wasn’t the only Chinese name around: Vivo, Oppo and OnePlus have all created loyal followings using a similar approach.
Xiaomi’s rise became legendary in the startup community. At one point, there was talk of a $100 billion valuation and the honor of being the world’s biggest unicorn. But hopes that the smartphone maker would become more like Facebook Inc., spinning its access to data into a treasure trove of ad and services revenue, met with more skeptical investors and it eventually listed in Hong Kong at half that value.
Along the way, the company started selling speakers, battery packs and even rice cookers. But one thing remained consistent — it outsourced almost everything. Although the company does have hardware engineers and works with vendors on specifications, that relationship is nowhere near as tight as Apple has with its suppliers. For some products, the Xiaomi connection is literally in name only — almost like a franchise-licensing model.
That’s why Lei Jun’s electric vehicle plans make complete sense. While incumbents are scrambling to build factories and set up supply chains, Xiaomi is likely to let everyone else do the work. By offloading the capital-intense side of hardware to those with the size and scale, cutting out the retail middle, and marketing direct to consumer, there’s every chance that the company can replicate its smartphone strategy by offering low-priced yet good quality alternatives to customers in emerging markets like China, India and Eastern Europe.
It also seems no coincidence that its decision to make a play for electric vehicles comes just as Foxconn starts its big push into the sector, complete with chassis and modularized car kits.
This is not to say that Foxconn will end up being Xiaomi’s manufacturing partner — other outsource carmakers already exist, including Magna International Inc. — but with a major contractor getting into the business, Lei Jun can be more confident than ever that there will be a robust catalog of companies willing to do the heavy lifting.
That leaves him doing what he does best, connecting with customers and building a brand.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To contact the editor responsible for this story:
Patrick McDowell at pmcdowell10@bloomberg.net
Corrective to April 6 story about electric vehicle sales in B.C.
VICTORIA — The Canadian Press erroneously reported April 6 that more than 54,000 light-duty electric vehicles were sold in B.C. last year. In fact, more than 54,000 light-duty electric vehicles are now registered in B.C. The Canadian Press
VICTORIA — The Canadian Press erroneously reported April 6 that more than 54,000 light-duty electric vehicles were sold in B.C. last year. In fact, more than 54,000 light-duty electric vehicles are now registered in B.C.
The Canadian Press
electric vehicles shouldn’t be a luxury item
TipRanks
2 “Strong Buy” Penny Stocks That Could See 100% Gains (Or More)
In a recent review of the market’s current conditions, JPMorgan strategist Eduardo Lecubarri recaps his view that 2021 will see modest gains across stocks generally – but outperformance among the small/mid-cap sector. Lecubarri believes that investors can find opportunities for big upside among stocks in that class. Driving the general stocks gains, Lecubarri points to recent manufacturing PMI prints, which are at 15-year high levels, and the falling unemployment numbers – both data points indicate a firm foundation for economic recovery. With consumer confidence also rising, and relatively high savings, he sees a tailwind for the small/mid-cap as the year unfolds. A general trend of rising small-cap stocks should naturally impel analysts and investors to look at the ‘pennies,’ stocks that are priced below $5 per share. While not a sure indicator, low share price usually goes along with low market cap – but it also comes with the solid upside potential that Lecubarri mentions. However, before jumping right into an investment in a penny stock, Wall Street pros advise looking at the bigger picture and considering other factors beyond just the price tag. For some names that fall into this category, you really do get what you pay for, offering little in the way of long-term growth prospects thanks to weak fundamentals, recent headwinds or even large outstanding share counts. Taking the risk into consideration, we used TipRanks’ database to find two compelling penny stocks, as determined by Wall Street pros. Each has earned a “Strong Buy” consensus rating from the analyst community and brings massive growth prospects to the table. We’re talking about over 100% upside potential here. Biolase Technology (BIOL) We will start with Biolase Technology, a leader designer, producer, and innovator in dental laser technology. Lasers bring a host of benefits to dentists and their patients, including fewer aerosols and a gentler touch during procedures, and more comfortable healing afterwards. Biolase products are used in periodontal, endodontic, hygienic, and implant procedures; the company markets online directly to dental practices. Biolase put a positive spin on its recent 4Q20 earnings report. Even though the top line revenues of $8.52 million were down 16% year-over-year, the sequential quarterly gain was impressive, at 31%. The company benefited as dental clinics got back to work in the economic recovery of 2H20. Biolase reported two positive trends in sales in Q4, with 78% of sales coming from new customers and 40% going to dental specialists. Even better, the company provided Q1 revenue guidance for $7.5 – 8.0 million, up 60–70% yoy, and above consensus of $7.0 million. Currently going for $0.76 apiece, Biolase shares could see major gains, according to some analysts. Among the bulls is Maxim analyst Anthony Vendetti who noted that the company’s positives in Q4 are not just spin. “While the international market continues to lag the US in COVID recovery, BIOL delivered its second consecutive quarter of significant sequential revenue growth, driven by US sales to new customers, dental specialists, and Dental Service Organizations (DSOs). We are encouraged that dental specialists comprised 40% of the company’s US laser sales in 4Q20, and expect the company’s recent launch of both the Endo and Perio Academies to contribute to increased adoption by the ~5K endodontists and ~5K periodontists in the US. Moreover, BIOL has placed an increased emphasis on converting small DSOs (that can adopt BIOL’s technology more quickly), which we expect to bolster short-term revenue as the company makes progress converting larger DSOs, such as Heartland Dental (private),” the 5-star analyst opined. Vendetti summed up, “Based on the unique value proposition of BIOL’s products, its continued progress in penetrating DSOs, and its increasing traction with dental specialists, we reiterate our Buy rating.” Along with that Buy rating, the analyst sets a $2 price target that indicates 165% share growth ahead in 2021. (To watch Vendetti’s track record, click here) It appears the rest of the Street sees plenty of upside, too. Based on Buys only – 4, in fact – the analyst community rates BIOL a Strong Buy. The average price target hits $1.94, and implies potential upside of ~157% over the coming months. (See BIOL stock analysis on TipRanks) Fortress Biotech (FBIO) Fortress Bio is a pharmacological research firm with a wide-ranging pipeline of 28 drug candidates, in varying stages of development from preclinical to Phase 3 trials. In addition to the pipeline, Fortress has six approved drugs on the market for a variety of dermatological conditions including acne, skin fungal infections, and burns and other surface wounds. These medications are marketing by Journey Medical, Fortress’s partner company, and in 2020 netted revenues of $44.5 million. This compared well – up 28% – to the $34.9 million netted in 2019. Fortress ended 2020 with a sound cash position, holding $235 million cash and cash equivalents. This was up $15 million from Q3, and up 53% year-over-year. The company noted that these positive results came even as the COVID pandemic impacted both supply and sales. Looking ahead, Fortress expects to add two new approved prescription products to its lineup in 2021. In another program update, Fortress is partnering with Cyprium Therapeutics and Sentynl Therapeutics on CUTX-101. Both companies have signed onto a Development and Asset Purchase agreement for the drug candidate, a treatment for Menkes disease currently in Phase 3 clinical trials. The company reported positive clinical efficacy results last August, including medial survival in the early treatment cohort of 14.8 years, compared to 1.3 years for the untreated historical control cohort. In 2H21, Fortress will begin rolling submission of the NDA for CUTX-101. Covering this stock for B. Riley, 5-star analyst Mayank Mamtani notes the company’s fundamental soundness. “FBIO’s differentiated business model, constituting of a diversified portfolio of marketed products and clinical-stage candidates, remains resilient amid challenges posed by C-19 pandemic, thereby setting up favorably in advance of numerous regulatory, clinical data and balance sheet inflection points anticipated over the next few quarters serving as opportunities to re-rate the stock,” Mamtani wrote. To this end, Mamtani rates FBIO a Buy, and his $10 price target suggests it has room for ~100% upside in the next 12 months. (To watch Mamtani’s track record, click here) Overall, Fortress Bio has 4 reviews on record, and all are to Buy, giving the stock a Strong Buy consensus rating. FBIO shares are priced at $4.48, and their $13 average price target implies a one-year upside of 190%. (See FBIO stock analysis on TipRanks) To find good ideas for penny stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Biofuels producers, farmers not sold on switch to electric – KGAN TV
GM details efforts on electric vehicles
DETROIT — An electric version of the Chevrolet Silverado pickup will get an estimated 400 miles of range per charge, General Motors said.
The company announced the range in a webcast Tuesday, adding that the truck would be built at a factory straddling the border of Detroit and the enclave of Hamtramck, Mich. It also announced that the plant would build the new 2024 GMC Hummer SUV.
The pickup announcement raises the level of competition for future buyers in the truck market. Ford already has announced plans to build an electric F-150 starting next year in Dearborn, Mich., while Fiat Chrysler, now part of Stellantis, has said it plans to have an all-electric Ram pickup.
GM would not say when the electric Silverado would arrive in dealerships, but the company plans to sell 30 models of electric vehicles globally by the end of 2025. It also has set a goal of making all of its passenger vehicles electric by 2035.
Ford’s F-Series pickups are the top-selling vehicles in the U.S., followed by the Silverado and Ram pickups. In addition to conventional automakers, electric vehicle leader Tesla plans to start selling a futuristic Cybertruck pickup later this year, and electric-vehicle startup companies Bollinger Motors, Nikola, Rivian and Lordstown Motors are planning to enter the market.
GM President Mark Reuss said the electric Silverado will be designed from the ground up as a truck for commercial and individual users. “This announcement affirms Chevrolet’s commitment to build on 100 years of truck expertise leadership while transitioning to an all-electric future in the light vehicle space,” he said.
The Detroit-Hamtramck plant, named “Factory Zero” by GM, is being retooled to build four electric vehicle models with an investment of $2.2 billion. Eventually it will employ 2,200 workers to make the two GMC Hummers, the electric Silverado and the Origin, an autonomous passenger vehicle for GM’s Cruise subsidiary.
Reuss said the factory has built 4 million vehicles since 1985 and “will help lead us into the future of transportation.”
Avon to add two new electric vehicle charging stations in Beaver Creek
Photo from Shutterstock
The town of Avon is one step closer to its climate, transportation and sustainability goals with its latest grant. Avon was awarded $44,000 for two new electric vehicle chargers from the Colorado’s Charge Ahead Grant program.
The two new chargers — a DC fast charger and a Level II charger to be exact — will double the capacity of the Beaver Creek Place Charging Station. With the additions, four electric vehicles can be charged at one time.
These new EV chargers represent the town’s commitment to promoting clean air through transportation decarbonization.
On March 8, Avon became a member of the GoEV City Campaign, which is a joint effort of the Southwest Energy Efficiency Project, the Clean Energy Economy for the Region, the Colorado Public Interest Research Group, Conservation Colorado and the Sierra Club. The GoEV campaign aims to help cities electrify its transportation from public transit and municipal fleets to all community vehicles. Boulder County, Summit County, Golden and Fort Collins are all members of this coalition.
This designation builds upon Avon previous electric vehicle and climate action plans, including its participation in the 2016 Climate Action Plan for the Eagle County Community. This plan aims to reduce greenhouse gas emissions by 25% by 2025 and 80% by 2050.
“With transportation now the largest source of greenhouse gas emissions in the state, the Colorado ski industry and mountain communities have a critical role to play in this sector’s decarbonization,” said Stefan Johnson, transportation program manager at CLEER and representative of the GoEV City Coalition. “We commend the Town of Avon for their bold commitment to zero emission vehicles and hope to see other mountain communities follow their example.”
The Colorado Charge Ahead Grant program is joint program between the Regional Air Quality Council and the Colorado Energy Office. The program, started in 2012, provides information and financial support for electric vehicles and their supply equipment. This program, as well as the GoEV Coalition, was created to help meet Colorado’s electric vehicle goals.
EV-Battery Rivals Prod Biden With Rare Trade Veto in Balance
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Two of the world’s largest electric-vehicle battery-makers have hired top Washington insiders to hold near-daily meetings with the Biden administration in a battle that could affect the electrification plans of Ford Motor Co. and Volkswagen AG.
SK Innovation Co., Ford’s battery supplier for its upcoming electric F-150 pickup truck, faces a 10-year U.S. import ban on its Korean-made batteries and components after April 11. SK Innovation has engaged such well-connected advocates as former EPA chief Carol Browner and one-time Acting Attorney General Sally Yates to convince the administration to intervene.
LG Energy Solution Co., which won the order against its rival from the U.S. International Trade Commission for what the agency said was an “extraordinary” effort to destroy evidence in a trade secrets battle, has also brought in hired guns to influence the Biden team. Ernest Moniz, an Obama energy secretary, is advising Seoul-based LG Energy on its strategic plans, while other insiders are lobbying the administration.
“The development of the battery supply chain is going to depend on what happens with this case,” Moniz said in an interview.
Meetings are being held with at least a dozen agencies, including officials at Labor, Transportation and Energy. Talks, conducted over the internet because of the COVID-19 pandemic, have focused on “climate change, electrification of vehicles, the Ford F-150 and jobs,” said Browner, Bill Clinton’s Environmental Protection Agency chief who also served as a White House climate adviser when Biden was vice president.
Biden has until April 11 to intervene. Presidential vetoes, known formally as “disapprovals,” of ITC import bans are rare. The last one was in 2013, when the Obama administration overturned a U.S. import ban on some older models of Apple Inc.’s iPhones and iPads in a blow to Samsung Electronics Co.
The issue is a complicated one for Biden. The president has made the promotion of EVs a cornerstone of his $2.25 trillion infrastructure plan to bolster the economy and combat climate change. Both South Korean battery-makers are building plants in the U.S. that would employ thousands of American workers. At the same time, Biden can’t be seen as wavering on intellectual property protection considering the long-standing U.S. dispute with China over the issue.
While every ITC import ban undergoes a presidential review, “it’s not often that there’s a meaningfully contested one,” said LG Energy’s lawyer, David Callahan of Latham & Watkins in Chicago, who’s been coordinating meetings between agency officials and LG Energy’s senior executives.
LG Energy filed its claim against SK Innovation in April 2019 for allegedly stealing trade secrets by poaching scores of highly knowledgeable employees. Since then, both companies have spared no expense to employ the services of Washington influencers. In 2020, SK Innovation spent $650,000 on its lobbying efforts and LG spent $531,666, according to data collected by the Center for Responsive Politics.
Lobbyists for LG Energy, SK Innovation, Ford and Volkswagen have been meeting with more than a dozen agencies including the Commerce, Justice and Defense departments; the EPA; the National Economic Council, and the National Security Council. U.S. Trade Representative Katherine Tai, who’s designated to make the decision, has the task of assessing the information and deciding which arguments hold clout.
Under the ITC order, SK Innovation will be able to import components for four years beginning now for U.S. battery production for Ford’s EV F-150 launching next year, and for Volkswagen’s American MEB line for two years, to give the automakers time to transition to new domestic suppliers.
Only 14.3% of the truck driver population is made up of African Americans, followed by 13% Hispanic, and 7% Asian. In this episode, host Michael Freeze wonders what industry leaders are doing to increase those percentages. We talk to two trucking industry experts who have implemented their own practices that are contributing to a more diverse work community. Hear a snippet, above, and get the full program by going to RoadSigns.TTNews.com.
Ford declined to comment for this article. But company officials have said the four-year reprieve isn’t long enough. The EV F-150 is “a critical project for us,” Jonathan Jennings, the company’s global commodity pricing vice president, told the Senate Finance Committee on March 16. He said that if the dispute isn’t resolved, Ford would have to look to import EV batteries from foreign suppliers for its pickups, instead of having SK Innovation manufacture them at two U.S.-based plants being constructed in Commerce, Ga.
Scott Keogh, CEO of Volkswagen Group of America, said in a LinkedIn post April 7 that past presidents have overturned the commission and “President Biden could do so in this case.”
The decision “could accelerate the future of zero-emission vehicles and green jobs, or threaten to reduce U.S. battery capacity and delay the transition to electric vehicles,” Keogh wrote. “There are other mechanisms in place in the legal system to further ensure the protection of IP rights without the devastating impact to unintended victims not party to the case.”
The case also has drawn in state lawmakers because of the number of American jobs at stake. SK Innovation’s Georgia plants — the first of which is due to start commercial production in early 2022 — are expected to create 2,600 jobs, according to Bloomberg New Energy Finance. LG Energy already has a battery plant in Michigan and one planned for Ohio.
SK Innovation has warned it may pull out of the U.S. if the government doesn’t veto the import ban. The company already has plants in Hungary and Poland, and expects to build more as demand for electric-vehicles increases.
LG Energy, in a March 10 letter to Sen. Raphael Warnock, a Democrat from Georgia, said SK Innovation’s threats lack credibility because the company’s unlikely to spend billions of dollars to build factories and then walk away.
If Biden doesn’t act and the import ban takes effect, SK Innovation’s next step is the courts. It’s already asked the ITC to delay implementation of the ban until it can appeal the underlying decision. Those requests are rarely granted, but are required before SK can turn to the U.S. Court of Appeals for the Federal Circuit, which has issued stays to maintain the status quo while it considers the case.
— With assistance from Kyunghee Park, Keith Laing and Gabrielle Coppola.
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Rapid shift to electric vehicles would ‘destroy’ some state economies, say biofuel backers
DES MOINES, IOWA – The president and auto industry maintain the nation is on the cusp of a gigantic shift to electric vehicles and away from liquid-fueled cars, but biofuels producers and some of their supporters in Congress aren’t buying it. They argue that now is the time to increase sales of ethanol and biodiesel, not abandon them.
To help address climate change, President Joe Biden has proposed an infrastructure plan that includes billions of dollars to pay for 500,000 electric vehicle charging stations, electrify public vehicles and enhance the nation’s power grid. These moves follow initiatives in California and other states to mandate electric vehicle sales and a goal by General Motors to shift production fully to electric vehicles by 2035.
Yet any shift from liquid-fueled cars to electric would be gradual, given the fleet of 279 million petroleum-powered vehicles now on U.S. roads. And producers of corn-based ethanol and soy-based biodiesel argue that biofuels will be needed for the foreseeable future.
The government’s promotion of electric vehicles comes as the U.S. works to reduce carbon emissions that worsen climate change and to compete in the increasingly electric global auto market. The transportation sector accounts for the largest share of U.S. greenhouse gas emissions, and more than 80% of that comes from cars, pickups and larger trucks, according to the Environmental Protection Agency.
LMC Automotive, a consulting firm, predicts more than 1 million electric vehicles will be sold in the U.S. in 2023, rising to over 4 million by 2030 — still less than one-quarter of normal annual new vehicle sales of around 17 million. Electric vehicles now comprise less than 2% of U.S. new-vehicle sales.
Citing a recent study from Harvard and Tuft universities that found ethanol emits 46% less carbon than gasoline, biofuels advocates say it’s imperative for the climate that the nation prioritize increased biofuel production.
Geoff Cooper, who heads the St. Louis-based Renewable Fuels Association, calls ethanol the “low-hanging fruit” for reducing carbon emissions and slowing global warming. He supports an immediate move from gasoline blended with 10% ethanol to a blend of 15%.
“If the goal is to reduce carbon impacts of our transportation sector and we knew we’re going to be using hundreds of billions of gallons of liquid fuels for the next several decades, why not take steps now to reduce the carbon intensity of those liquid fuels?” Cooper said.
Each year, U.S. refineries produce about 15 billion gallons of ethanol — about 10% the volume of gasoline — and 1.5 billion gallons of biodiesel, which is typically blended with petroleum-based diesel for trucks and other heavy vehicles.
Plants around the country produce the fuel, but most are in the Midwest, led by Iowa with 43 ethanol refineries and 11 biodiesel plants. Nearly 40% of the U.S. corn crop is used for ethanol, and 30% of soybeans goes to biodiesel.
Despite the carbon benefits of ethanol, others note the growth of biofuels prompted an expansion of corn acreage, increased use of fertilizers and more pollution of waterways. Biofuels plants also typically use hundreds of millions of gallons of water annually.
Iowa’s two Republican U.S. senators consider the shift toward electric vehicles a threat to farmers
Sen. Charles Grassley said last fall that a proposal by Democratic Sen. Jeff Merkley of Oregon and Rep. Mike Levin of California to end U.S. sales of gas-powered vehicles by 2035 would devastate Iowa.
“This … would absolutely destroy Iowa’s economy because it’s so dependent on agriculture and agriculture is so dependent on biofuels,” Grassley said.
Iowa Sen. Joni Ernst argues that tax credits for buying electric cars typically go to well-to-do people on the East and West coasts and are propping up an industry that hurts demand for biofuels.
“It’s not only the move to all-electric vehicles that should have Iowans concerned; it’s the crazy tax breaks that wealthy coastal elites are getting for their electric vehicles,” Ernst states on her Senate website. “I firmly believe Iowa taxpayers shouldn’t be footing the bill for millionaires to get a discount on luxury cars.”
It is true that many who got the $7,500 federal electric vehicle tax credit since its inception in 2009 could afford a car that cost six figures or more. But since then, new models and higher sales have brought economies of scale and lower prices that appeal to more mainstream buyers.
The ethanol industry itself was a beneficiary of a 45-cent-per-gallon tax credit that provided about $30 billion to help the industry get established before that expired a decade ago. And farmers who grow commodity crops, such as corn and soybeans, still receive help from the federal government, including subsidized crop insurance costing billions of dollars annually.
Despite assurances the move to electric will be gradual, many farmers see the shift as a threat to their livelihoods and doubt state and federal officials from urban areas will protect rural economies.
“It’s like you’re almost helpless,” said Ed Wiederstein, a semi-retired livestock and grain farmer near Audubon in western Iowa. “It’s like a snowball that goes downhill.”
Joel Levin, executive director of the nonprofit advocacy group Plug In America, said the market will favor electric cars not only for environmental reasons but also because they’re high performance.
“It’s not like Californians wants you to eat your broccoli. These cars are fun to drive,” Levin said. “People don’t drive Teslas just because it’s good for the environment. They drive Teslas because it’s a sick car.”
Over time, a switch to electric vehicles likely will force farmers to adapt, said Chad Hart, an agriculture economist at Iowa State University. Farmers in states such as Iowa and Illinois still will mainly grow corn and soybeans because the soil and climate are perfect, but farmers elsewhere will raise other crops, he said.
“Agriculture is always shifting the crop mix to fit whatever markets offer the best opportunity,” he said.
States, utilities must ensure equitable investment in electric vehicle infrastructure, new report warns
Dive Brief:
- Only a few states and power companies are taking steps to ensure low- and moderate-income communities and communities of color benefit from the transition to electric vehicles, according to a new report from the American Council for an Energy-Efficient Economy (ACEEE).
- The study, published Tuesday morning, examined 36 states where utilities have filed transportation electrification plans, and concluded only six have some form of equity mandate or consideration.
- “Without strong policies in place, you could see a big round of ratepayer-funded charging investments going disproportionately to communities that least need the support,” said Peter Huether, ACEEE’s senior research analyst for transportation and author of the study.
Dive Insight:
President Joe Biden’s $2 trillion infrastructure plan calls for investing $174 billion in the EV market, including point of sale vehicle rebates and the installation of a half million chargers by 2030. As the transition to electric transportation begins in earnest, there is growing recognition that the investments must be made with equity and diversity in mind, say experts.
Biden’s plan aims to “redress historic inequities and build the future of transportation infrastructure,” according to a White House statement, and includes $20 billion for a new program to reconnect neighborhoods that have experienced historic underinvestment.
“As electric vehicles become more ubiquitous, we need a much more proactive effort to ensure that low-income communities and communities of color have access to charging and directly benefit,” Huether said. “State legislators and utility regulators need to set equity requirements, and utilities need to engage communities to create programs that serve everyone.”
Estimates of the investment needed to electrify the U.S. transportation sector vary widely. AlixPartners expects $50 billion by 2030 for charging networks. The Brattle Group says between $75 billion and $125 billion will be needed to serve 20 million vehicles in the next decade. Boston Consulting Group has said 40 million EVs by 2030 could take $200 billion to supply.
ACEEE’s analysis found that since 2012, regulators in 25 states and the District of Columbia have approved almost $2.4 billion in utility charging investments. Of that amount, $2.1 billion have either some focus or prioritization on underserved communities. But the study notes that is because the majority of charging investments from investor-owned utilities has been made in New York and California — two states that have equity mandates.
ACEEE also found only about half of regulator-approved plans examined in the study listed a community engagement effort for these investments.
“Investments could be potentially wasted,” the report found, if charging infrastructure “is sited where it is not needed or for uses that do not provide the most benefit for these communities.”
Engagement is “a major tool to assess this need,” ACEEE said. Also, in-person and virtual engagements “can provide critical information to supplement market-demand evaluations and projections.”
There are recent examples of utility transportation plans including a focus on equity. Colorado regulators in January approved Xcel Energy’s $110 million plan, with approximately 15% of the program budget directed toward equity-focused programs.
ACEEE’s study recommends that utilities preparing to begin EV programs engage with communities to ensure the investments meet the needs and priorities of residents. And it recommends utilities and electric transportation program administrators initiate community engagement in the planning process, to identify problems; set aside funding for underserved communities; use investments to increase clean mobility options in underserved communities; and support the charging of medium- and heavy-duty vehicles operating in environmental justice areas.
“More utilities could be taking advantage of their pilot and early-stage programs to explore different forms of engagement and to rethink how they can build equity into their programming in a deliberate and systematic way,” the report concludes.
