An EV future would cost at least $2T, maybe $4T
The National Center for Energy Analytics has estimated that a fully-electric vehicle (EV) future would cost between $2 trillion and $4 trillion. Moving to 100% EVs will impose enormous infrastructure costs to install single-family, multi-family, and public charging stations, as well as upgrade the electrical grid to support the load.
This estimate was arrived at “before considering the impact of higher demand on the costs of materials and labor to build it all and also before considering the additional costs to build more electricity generation.”
In other words, this analysis makes the baseline assumptions that the 1) necessary materials and labor will be available at a reasonable cost, and 2) the electricity necessary to charge 100% EVs will be reliably available. In real life, that may not be the case, especially if the electric grid moves towards unreliable wind and solar, which may drive further costs.
The report estimates that equipping all U.S. single-family and multifamily homes with Level 2 chargers will run between $190 billion and $430 billion. Each charger costs between $300 and $1,000, with installation costs ranging between $700 and $1,800. That adds up across approximately 82 million single-family homes and 44 million multi-family apartment units in the U.S.
Upgrading the electric distribution system to accommodate so many EVs will be costly, with the report estimating between $1.6 trillion and $1.8 trillion. Existing transformers will need to be replaced with larger ones to accommodate greater peak loads in the early evening and early morning. Utilities may restrict charging hours to later at night to attempt to distribute peak load, but distribution upgrades will still be necessary to ensure transformers get a cooling-off period. Some distribution lines will also need to be upgraded for higher capacity.
Accommodating “fast-charging” public chargers will require some heavy-duty transmission line construction. The Midcontinent Independent System Operator (MISO) estimates this costs between $2 million and $5.6 million per mile, and the report guesses that at least 300,000 miles of new transmission lines would be constructed. The total costs would range between $600 billion and $1.7 trillion. Additional substations would end up between $40 and $110 billion.
The author of the report concludes:
“Meeting those requirements, along with the need to increase the supply of electricity to charge millions of EVs, will be difficult—if not impossible—to achieve 25 years from now and will cost trillions of dollars even if it can be accomplished…
The headlong rush towards EVs is being driven by taxpayer-funded subsidies, as well as by laws and mandates that explicitly or implicitly amount to bans on the sale of internal combustion vehicles. Both the subsidies and mandates ignore the physical and economic realities involved. But reality cannot be ignored and likely will cause that headlong rush to collapse. The question is how much economic damage will occur before the collapse takes place.”
Consumers ought to be free to purchase an electric vehicle if that makes sense for their circumstances, but no one should be forced. The report shows that 100% EVs in 25 years would entail massive costs even if it could be achieved.