When Ford Motor Co. announced plans for an all-electric pickup truck in 2021, the automaker’s expectations were modest. It tooled up the sprawling Rouge Manufacturing Complex in Dearborn to produce up to 25,000 units a year — but when reservations for the F-150 Lightning opened, it quickly accumulated nearly 10 times as many.
“Just when we finished the walls” at the new Rouge Electric Vehicle Center, “we had to knock them down,” says Darren Palmer, vice president of electric vehicle programs at Ford. And now, even with an expanded annual capacity of 150,000 units, it will take the automaker into 2024 before it can fulfill the backlog — never mind new orders.
Ford also is struggling to meet demand for its all-electric Mustang Mach-E, and it’s not alone. Tesla now has four assembly plants, including its original factory in Fremont, Calif., and a new one in Austin, Texas, but it’s running heavy overtime to keep pace. Other EV makers are having trouble, as well.
Battery-electric vehicles accounted for barely 1 percent of the U.S. new car market in late 2019. That jumped to 5 percent by early 2022, and pushed past 7 percent late in the year. What’s particularly significant is that sales were up by roughly two-thirds, year-over-year, even as the overall new car market remained in a slump.
Most observers now forecast EVs will reach 20 percent to 25 percent of new vehicle sales by 2025, although John Murphy, an auto analyst with Bank of America Research, is a bit more cautious. He thinks the figure will be closer to 10 percent unless automakers address several key challenges — pricing, for one, as today’s average EV costs nearly $20,000 more than the typical gas-powered vehicle. Then there’s the need to develop new sources of raw materials like lithium, copper, cobalt, and nickel.
But there’s an even more worrisome issue that could short-circuit the nascent EV market: the health and capabilities of the nation’s electrical infrastructure.
Range anxiety often is cited as a key concern for potential EV buyers, but newer models are generally delivering 250 miles or more per charge, with some now topping 400 and even 500 miles. The bigger issue, says John McElroy, a veteran analyst and host of the streaming video program “Autoline Detroit,” is the ability to charge in public.
On the plus side, corporate providers like ChargePoint, Electrify America, and EVgo have raised billions of dollars to invest in public charging. And the bipartisan infrastructure bill passed by Congress in 2021 set aside $5 billion to fund the nationwide rollout — including the latest high-speed systems.
Michigan already received a federal commitment for $110 million from Washington under the National Electric Vehicle Infrastructure Formula Program, or NEVI. It will contribute to the state’s goal of having 100,000 chargers in place by 2030 — which will mean installing about 12,000 chargers annually through the end of the decade. “Growing the network of charging stations is critical for EVs to achieve widespread adoption,” says Kelsey Peterson, manager of transportation electrification at DTE Energy in Detroit.
The program already is underway. “We’re beginning to make sure our interstate network (and other main roadways) are covered,” says Trevor Pawl, the state’s chief mobility officer. The development of the charging infrastructure “is moving faster than a lot of people realize.”
Perhaps, but it’s one thing to put chargers along highways and another to make sure they’re working. “I’ve had multiple issues with EV chargers while on the road,” says Mercedes Lillienthal, a rally driver and EV fan. A recent study by EV advocacy group Plug In America found about half of its respondents have run into problems using public chargers. A study published in early 2022 by the University of California, Berkeley estimated 72.5 percent of the 657 public quick chargers in the San Francisco Bay Area were operational at any given time.
The problem varies by the entity operating the charger, with most studies and anecdotal evidence suggesting Tesla’s Supercharger network is the most reliable — albeit currently limited to Tesla owners.
One way or the other, “If EV owners continue to experience chargers that don’t work as well as expected, that’s going to slow the EV revolution down,” McElroy says.
The lack of a public charging network isn’t as much of a problem as some might fear — at least for now — says Pat Romano, CEO of ChargePoint, as “at least 80 percent of EV owners currently charge their vehicles at their home or office. But it will become increasingly problematic as EVs go from niche to mainstream, especially if regulators and automotive manufacturers expect to get urban motorists to plug in.”
“It’s great to be able to charge at home,” says R.J. Juliano, senior vice president of Philadelphia-based Parkway Corp., “but we have to provide power” for the nearly 50 million Americans who rent their homes, as well as the millions more living in condos or other housing where they may not be able to install their own chargers.
Founded 92 years ago, Parkway is the largest operator of public parking facilities in the U.S. and Canada, and it’s investing millions of dollars to be ready for the EV revolution, Juliano says. It initially is installing slower Level 2, 240-volt chargers, since most of the motorists now using those systems simply top off their batteries when shopping or dining. Moving forward, however, Parkway is starting to install substantial numbers of DC quick chargers, especially in urban lots for motorists who can’t plug in at home.
After the infrastructure bill was passed, President Joe Biden announced plans to have at least 500,000 charging stations in operation across the U.S. — most with multiple chargers — by 2030. But that raises another question about the broader health and capabilities of the U.S. electric grid.
Today, the U.S. consumes the equivalent of 30 trillion kilowatt-hours of energy annually — or 100 quadrillion BTUs. Measured another way, that’s equal to 17 billion barrels of oil, according to government data. Much of that comes in the form of gasoline — which EV proponents envision will be replaced by cleaner electricity.
There are, of course, skeptics who question whether battery-electric cars are cleaner than those with internal combustion engines. But numerous studies by the EPA, the NRDC, and others suggest that they’re even, as one battery requires 25 pounds of lithium, 60 pounds of nickel, 44 pounds of manganese, 30 pounds of cobalt, 200 pounds of copper, and 400 pounds of aluminum, steel, and plastic.
There’s also the matter of whether enough clean energy is being produced. Wind and solar are the fastest-growing sources of electrical energy in the U.S. but contribute just 5 percent of total energy, according to the University of Michigan’s Center for Sustainable Systems.
Michigan has set an aggressive goal for shifting to renewables, Pawl says, and it’s getting a welcome nudge from some of the state’s largest corporate citizens. In August 2022, Ford and DTE Energy announced plans to install solar farms capable of providing zero-emission energy to power the automaker’s total Michigan operations. Ford also plans to have renewables provide most, if not all, the energy for the massive EV manufacturing complex, BlueOval City, it’s setting up near Memphis, Tenn. General Motors and Stellantis have also expanded their use of renewables.
The general agreement is that the U.S. has enough energy generation capacity to cover any EVs likely to be added to the nation’s vehicle fleet through at least 2025, and possibly 2030. But the further out we go, and the higher the share of the new-vehicle market EVs become, the bigger the challenge. Local utilities are “rising to the challenge,” Pawl claims.
Still, electric production varies “from region to region, state to state, and utility to utility,” cautions Dave Reuter, chief marketing and communications officer for NextEra Energy in Jacksonville, Fla. Without pointing fingers, Reuter worries that some providers simply aren’t adapting to what is necessary going forward.
Gary Silberg, a partner and leader of KPMG’s global automotive sector, is even less upbeat. “Even before you throw in electric vehicles, (the U.S. electric infrastructure) is going to need a lot of work,” he says.
That’s been highlighted by a series of recent episodes that has left millions of Americans in the dark — or even worse. In California, during this past summer’s heat waves, customers faced the prospect of rolling blackouts when demand levels overstretched energy supplies. It was so bad, California officials told EV owners not to charge their batteries, leaving people stranded.
What’s more, during the past several years harsh winds have led to downed power lines that, in turn, set off raging wildfires. Downed PG&E lines were blamed for a massive blaze in Sonoma County in 2019 that destroyed hundreds of homes and caused 100,000 people to evacuate — often just ahead of the flames.
Indeed, when pressed, Pawl acknowledges everything isn’t entirely rosy. “I think our infrastructure, where we are right now, has had some unique things happen to it over the last few years, ”he says.
That underscores the fact that the state’s infrastructure is both all-encompassing and a bit nebulous. In reality, it consists of multiple discrete elements, starting with power generation, as well as transmission from generators to local communities, and then the distribution network delivering power to individual homes and businesses.
There clearly needs to be significant new investments in energy generation, and those facilities need to be properly equipped and maintained. The dangers were underscored during an unexpected spring 2021 ice storm that struck the regional grid serving the state of Texas. It saw wind turbines freeze up, and other generating facilities failed to fill the gap. That left many parts of the state in the cold and dark for up to a week.
But it’s the downstream portion of the energy infrastructure that really worries Christine Oumansour, a partner in Oliver Wyman’s energy practice. “The (transmission and distribution grid) is very old, with a quarter of it over 50 years old,” she says. On the plus side, Wyman’s research suggests American utility companies and those that manage the transmission and distribution side are investing about $100 billion annually to catch up on what’s going to be needed.
Oumansour also warns that utilities like DTE Energy and Consumers Energy need to change their approach to planning by learning to respond more rapidly to changing infrastructural realities, rather than laying out plans that cover five-year or even 10-year cycles.
For its part, the state’s second largest utility contends it will up its spending to prepare for the demands the grid will face in the coming years. “That bright future is within our reach if we invest in a modernized grid of the future powered by cleaner energy generation,” says Trevor Lauer, president and COO of DTE Energy.
While spending on everything from tree-trimming to new solar and wind farms will be critical, experts say utilities must put in place a more high-tech energy network if they’re to achieve maximum efficiency going forward. The grid of the future is expected to be significantly different than what we have today.
For one thing, there will be the challenge of load-leveling power from renewable sources. Winds don’t always blow and solar panels are useless at night. That’s why NextEra Energy installed a 945-megawatt battery storage system in Manatee County, Fla., several years ago. Then the largest system of its kind in the world, it can handle enough power to cover peak load demands for up to four hours.
At a local level, we’ll likely see smaller storage systems, perhaps down to a few hundred kilowatts, providing backup for individual neighborhoods. GM, for one, has been experimenting with so-called “second life” batteries previously used in electric vehicles like its Chevrolet Bolt. They’re expected to still have as much as 70 percent of their capacity left after the vehicle itself reaches the end of its life.
At the same time, the grid will have to become a lot “smarter,” according to analyst Oumansour and other experts. It will need to learn to detect faults, even predict them before a failure occurs, and it will have to be able to redirect energy when and where it’s most needed. It will also need to be able to cover everything from the big, high-tension power lines down to individual distribution points.
At the local level, as more and more vehicles go electric, “we’ll have to be able to monitor” and adjust the way the chargers in a parking structure operate, says Parkway’s Juliano. Using load management systems, chargers will “talk” to one another to see how they’re being used. They may collectively slow down if they exceed the available power supply, and they might adjust individually according to the vehicles plugged in. Batteries with less energy might get more power, for example.
Tomorrow’s grid also will be taught how to take advantage of the “vehicle-to-load” technology many new EVs, such as the F-150 Lightning, are capable of. The truck can be used to provide power to a home if there’s a blackout, Ford notes.
But, in the coming years, it could also push power back into the grid when there’s peak demand, essentially using its battery as a backup. And, company officials state, vehicle owners could get paid for providing that power. Owners already can set a limit on how much power can be drawn from their Lightning batteries, so they don’t wind up with a dead pack. When demand drops, the vehicle would automatically start charging again.
The software to manage vehicle-to-grid technology is still in the development stage, but it will become an important feature helping tomorrow’s energy infrastructure meet greater demand as millions of vehicles go electric.
What’s clear is that the advent of the EV era will both strain and transform the nation’s electrical energy infrastructure. In the short term, most experts believe the existing network can handle demand.
Longer-term, however, significant changes will be necessary. New power generation capacity will be needed, especially from renewable sources. And both the transmission and distribution networks must be smarter and more robust. If industry and government agencies start working together now, proponents contend, the transition should be a smooth one. But it will require better planning and significant investments — and there’s no time to waste.
