Emissions from the transportation sector, the largest source of greenhouse gases in the U.S., can be reduced 11% from 2020 levels if 52% of all cars and light-duty trucks sold in 2031 are electric, according to a new report.
The build-out over the next decade would not affect vehicle or electricity costs for consumers, the Rhodium Group found in an analysis released May 13.
The report determined that the federal government would need to invest up to $44.3 billion annually from 2022 through 2031 to drive a little more than half of all new cars and light-duty trucks sold in 2031 to be powered by electricity. Up to $39 billion of that total would be in the form of incentives to boost EV sales.
"While 11% would only take a bite out of America's growing transportation carbon footprint, it's significant for the sector," John Larsen, the Rhodium Group's director for energy and climate and the lead author of the report, said in an email.
"It's also important to view 11% as the starting point for greater reductions in the 2030s as EVs dominate the market in a way that they don't in the 2020s," Larsen said. "More can be done through additional measures to tackle fuels."
For instance, Larsen said new stringent regulations would be needed to achieve President Joe Biden's goal of having all new cars and light-duty trucks sold in the U.S. by 2035 be EVs. That will not necessarily pose hardships for industry, he added.
"Industry should be ready to meet the challenge because manufacturing and charging will have scaled by 2031," Larsen said. "We've seen year-on-year sales share jumps in China and EU get in the neighborhood of 15%-20%, so such jumps are possible."
The analysis compared the impact of ambitious federal policies and investments with policies already in place today to see where EV adoption and emissions would fall. If current tax credits and other buyer incentives remained unchanged, EVs would make up between 27% and 39% of new car sales by 2031, the analysis estimated.
Larsen's research team then considered proposals in a number of bills that Democrats introduced in the U.S. House and Senate in recent months, as well as Biden's American Jobs Plan infrastructure package unveiled in late March. The team then assessed what could be achieved over the next decade.
Those policy proposals include extensions of the $7,500 tax credit for people who buy an EV, electrification of school buses and other transit buses, and legislation to boost EV charging stations and support manufacturing plants that make electric batteries and other auto parts.
Republicans have raised concern over how a soaring demand for EVs would affect the nation's electric grid, especially as Democrats also are pushing for a carbon-free power sector by 2035.
The Rhodium Group estimated that demand for electricity from the transportation sector would rise between 77% and 119% by 2031, while gasoline and diesel consumption would drop about 5%.