Project 19:
Economic Impacts of Electric Vehicle Adoption

Objective

Examine the predicted levels of electric vehicle adoption to analyze the opportunity of using EVs as a grid stabilization tool for Hawaii, including GHG emissions impacts. Assess factors that affect EVs adoption, including regulatory mechanisms.

Brief Description

This project examined likely levels of EV adoption in order to estimate the impact to the State of Hawaii's economy and to determine the level of opportunity of EV's as a grid stabilization tool. Researchers have collected Hawaii data on vehicle adoption rates and practices as applied to Hawaii-specific vehicle ownership data. Three reports on EV penetration, EV cost comparisons and GHG emissions have been completed and published. The first report evaluated EV penetration rates and provided an assessment of expected EV penetration over time. The results estimate there will be 140,000 EVs on the road in Hawaii by the year 2040 in the reference scenario. To complement the results of the EV-adoption scenarios, EV lifecycle ownership costs were analyzed in the second report. This report assessed the impact of the federal tax credit for EVs and of the benefits of household solar photovoltaic systems coupled with proposed time-of-use electricity rates for EV owners. The third report estimated GHG emissions of EVs in Hawaii to include comparisons with similar ICE vehicles. In terms of GHG emissions, EVs offer an improvement over ICEs. However, the model that looks at GHG emissions by county shows that HEVs outperform EVs on Oahu while EVs outperform HEVs on the big Hawaii Island because of the high level of geothermal electricity. Researchers are presently working on documenting policies that support EV uptake within the U.S.

Research Results

To date, three reports have been completed and posted on the EVTC website. They include analysis of: 1) factors that affect EV adoption and assessment of EV adoption rates in Hawaii, 2) lifecycle ownership costs for EVs in comparison to ICEs and HEVs in Hawaii, and 3) GHG emissions of EVs in comparison to ICEs and HEVs in Hawaii, with an emphasis on the four counties.

Hawaii researchers have collected literature on vehicle adoption rates and practices. The report provides an assessment of expected EV penetration in Hawaii to the year 2040, with three adoption pathways. As part of the calibration of the EV adoption forecast for Hawaii's vehicle market, researchers requested and received data from the Hawaii Department of Transportation on Hawaii's existing registered vehicles (over a million), including the vehicle makes and models as well as gathered available data from the Hawaii Automobile Dealers Association. The results estimate there will be 140,000 EVs on the road in Hawaii by the year 2040 in the reference scenario. In the low scenario, the estimate is 110,000 and, in the high scenario, 280,000. The vehicle adoption scenarios may also be used to help determine impacts of EVs to Hawaii's electric sector and overall economy in future efforts.

To complement the literature review and Hawaii EV-adoption scenarios, an analysis of a total cost of ownership of EVs in comparison to ICEs and HEVs in Hawaii has been completed. The scenarios assess the impact of the federal tax credit for EVs, differences in purchase, finance and lease options, impacts of household solar photovoltaic and the Hawaii utility's pilot and proposed time-of-use electricity rates for EV owners. The model includes a forecast for future gasoline and electricity prices using a scenario planning approach. Results suggest that although EVs on average cost more than ICEV or HEV counterparts, the federal tax credit largely closes this gap. Even though electricity rates in Hawaii are substantially higher than the national average, having residential PV can substantially bring down the cost of EV ownership. Moreover, adopting time-of-use rates could lead to a reduction in fuel costs on the order of 10%.

In terms of GHG emissions, EVs throughout Hawaii offer an improvement over ICEVs. However, in a model that looks at GHG emissions by county, HEVs outperform EVs on Oahu (which has the highest EV penetration). However, on Hawaii Island, EVs outperform HEVs given the high level of geothermal for electricity. Researchers are now working on documenting policies that support EV uptake within the U.S.

Impacts/Benefits

1) The forecast for EV adoption can be used for two purposes. The first is to help inform policy-makers of expectations for EV penetration. This is important, for example, in right-sizing public charging infrastructure. The second is to bring the Hawaii UTC research team onto the same page in terms of using similar expectations for EV penetration within scenario analysis.

2) The lifecycle ownership cost study for vehicles, including EVs, in Hawaii provides further insight into expectations for EV adoption with policy implications for EV support measures. For example, the impact of the federal tax credit subsidy.

3) The GHG study provides insights into the potential mismatch between EV support policies and GHG outcomes. Though EVs are found to be an improvement in GHG emissions over ICEVs, HEVs overall offer more GHG reductions, based on population distribution and the portfolio of electricity generation within Hawaii's system.

Reports

Coffman, M., Bernstein , P. & Wee, S., (2015). Factors Affecting EV Adoption: A Literature Review and EV Forecast for Hawaii (HNEI Rep. No. HNEI-04-15). Honolulu, HI: University of Hawaii.

Coffman, M., Bernstein, P. & Wee, S., (2015). Electric Vehicle Lifecycle Cost Assessment for Hawaii (HNEI Rep No. HNEI-07-15). Honolulu, Hi: University of Hawaii

Coffman, M., Bernstein, P. & Wee, S., (2016). Electric Vehicle Greenhouse Gas Emission Assessment for Hawaii (HNEI Rep No. HNEI-10-16). Honolulu, Hi: University of Hawaii

Coffman, M. (2017) Economic Impacts of Electric Vehicle Adoption (FSEC Rep No. FSEC-CR-2047-17). Honolulu, Hi: University of Hawaii