The US Expects to Invest US$141 billion to Adjust Electric Vehicle Infrastructure

published: 2020-06-22 18:30 | editor: | category: News

According to the coverage of foreign media, local American electric vehicle manufacturers, charging station manufacturers, and state-owned enterprises, are about to co-adjust the infrastructure for alternative fuel vehicles in accordance with the current development status of the US electric vehicle market.

A total investment of at least US$141 billion is expected for this project on the industry chain of alternative fuel vehicle, which is also the biggest investment project in new energy to date in the US.

This investment consists primarily of developing electric vehicle technology, improving on charging stations and charging cost, and aims to standardize the US alternative fuel vehicle industry, as well as co-implement the popularization of alternative fuel vehicles in the US market.

A number of American automotive manufacturers have announced their participation in the project through multiple electric vehicle models.

Project Obstructed by Trailing Charging Infrastructure

Despite the enormous US$141 billion project, and the fact that a number of automotive manufacturers and charging station manufacturers have announced to be participating in this project, the survey and research report announced earlier by McKinesey & Company regarding the US market of charging facility has pointed out that a huge portion of charging infrastructures in the US are not complete, where some remote areas of numerous states are even lacking in charging facilities, and the existing charging stations are also experience issues such as inadequate quantity, as well as inconsistency in the standard and charging costs for charging stations.

Although this adjustment project includes the establishment of charging network, as well as stipulates technical standard for the level 2 and 3 charging plugs, the data of the US Department of Energy indicates that only approximately 1/5 of the existing 64,000 charging plugs for vehicles are able to charge a vehicle to full battery within an hour, with both the quantity and quality trailing far behind other countries.

Simultaneously, American experts also explained on the development status of the electric vehicle industry, where it is not only important for the effort between automotive manufacturers and charging equipment manufacturers to exert efficiently, but the reinforcement in the development of electricity facilities in the US is also critical. As the regulatory authorities for public electricity companies in various states have set different electricity prices, the differences in electricity prices for various regions are significant, and since the current average price for commercial electricity in the US is approximately US$0.01/kWh, an implementation of lower electricity cost for vehicles will be essential in stimulating more consumers into using alternative fuel vehicles.

As the leading manufacturer of alternative fuel vehicles in the US, Tesla is also autonomously building super charging stations. The company sold 192.2K units in the US market during 2019, which accounted for 58% of the market share for alternative fuel vehicles in the US.

However, it remains to be seen if Tesla is willing to devote completely into this reformation project by sharing years of heavily invested electric vehicle technology, charging stations, and market share.

Summarizing on the various factors, the trailing progress in new energy infrastructures and the distribution of profits may become the biggest obstacles to the large-scale adjustments and reformation of electric vehicle infrastructures in the US.

Ambiguous Attitude on Alternative Fuel Vehicle Policy in the US

The US is the largest country in the world for automotive usage, and has the highest car parc, with mostly traditional vehicles of large discharge internal combustion engine, and the highest annual average consumption of petroleum in the world.

Despite the existence of an alternative fuel vehicle tycoon like Tesla amidst the vigorous implementation of alternative fuel vehicles in the world, the policy regarding this specific field remains ambiguous, and the primary factor behind this predicament is the convenience in the obtainment of petroleum and the breakthrough in shale oil technology that have removed the sense of resource crisis for the country, and derives an ambiguous attitude toward the development of new energy foundation, which became one of the reasons behind the relatively slow implementation of alternative fuel vehicles in the US compared to other countries.

The US initiated a mandatory policy in 2011 that requires all domestic automotive manufacturers to produce alternative fuel vehicles, and has stipulated the mission in the reduction of carbon emission by 2025. Various automotive manufacturers have cut the prices of alternative fuel vehicles almost in half in order to facilitate sales that would avoid receiving substantial fines from environmental protection departments. However, the undeveloped technology in alternative fuel vehicles at the time had resulted in insignificant sales and effectiveness.

The total global sales of alternative fuel vehicles in 2019 had a YoY increase of 10% at 2.21 million units, and the sales of alternative fuel vehicles in the US during 2019 sustained a YoY reduction (360.8K in 2018) at 325K units, whereas the percentage of the electric vehicle market over the overall automotive market had also been reduced from 2.1% to 1.9%.

It is clear that this alternative fuel vehicle infrastructure reformation project is colossal, and through the comparison of the data in the sales of alternative fuel vehicles, one can see that American automotive consumers do not particularly fancy this category of automobile.  

China produced 1.02 million units of battery electric vehicles in 2019, equaling to a YoY growth of 3.4%, and sold 834K units of battery electric passenger vehicles, which had a YoY increase of 5.9%.

In sharp contrast, the production and sales of alternative fuel vehicles in China during 2019 had surpassed 1.2 million units, and were ranked first in the world.

China had released the <Management and Regulations on the Access of Alternative Fuel Vehicle Manufacturing Businesses and Products> back in 2010, and the country had achieved a car parc of 3.81 million units of alternative fuel vehicle, 1.22 million units of charging stations, and an accumulated charging capacity of 5 billion kWh, by the end of 2019. After nearly 10 years of arrangement and perfection, China is now the largest market of alternative fuel vehicles in the world, and is backed with a comprehensive industrial supporting system and policy.

Undoubtedly, the US possesses a globally leading status in terms of alternative fuel vehicle technology, though cheap oil prices and the flourishing traditional automotive industry have both restricted the development of alternative fuel vehicle infrastructures, and this reformation project will still be faced with numerous challenges if it does end up seeing the light of the day in the future.

Now that electrification has become the major trend in the global automotive market, various countries have been successively launching policy on energy conservation and carbon emission, where Europe has proposed the Green Economy Recovery Project, and China has also incorporated alternative fuel vehicles into the core of new infrastructure development. As the US heavily invested US$141 billion in to the market of alternative fuel vehicles, a new round of phased development will also be introduced to the technology in electric vehicles.  

 (Cover photo source: shutterstock)

announcements add announcements     mail print
Share