Eight states take a big step to advance zero-emission vehicles

States representing more than a quarter of U.S. car sales made a strong statement today that they’ll be engaged in advancing the deployment of zero emission vehicles (ZEVs).

In their “Multi-State ZEV Action Plan,” eight states — California, Connecticut, Maryland, Massachusetts, New York, Oregon, Rhode Island, and Vermont — lay out an ambitious agenda to support vehicle sales and fueling infrastructure over the next decade with the goal of putting 3.3 million ZEVs on the roads by 2025. These vehicles, which include cars fueled by electricity and hydrogen, are a key part of our efforts to reduce the emissions contributing to climate change.

The transition to a low-carbon transportation system will take decades and cost billions. As C2ES has noted in our work in this area, government is unlikely to make significant new investments in the near term, but it can play a critical role in encouraging private sector investment in ZEVs and their infrastructure.

In its action plan released today, the multi-state collaborative highlights the need for states to prepare the market so that private enterprise can: “(1) produce, market, and sell desirable vehicles; (2) identify the right business model(s) and build out a viable fueling infrastructure; and (3) ensure that competitively priced fuels are available for ZEVs.” The plan, which follows an agreement the states’ governors signed last October initiating this collaboration, provides many examples where government can enact low- or no-cost policies that will stimulate private investment in ZEV deployment, particularly as it relates to fueling/recharging infrastructure.

Since late 2010, Americans have bought about 200,000 plug-in electric vehicles, but more steps are needed to expand the market beyond these early adopters. The steady climb in total vehicles on the road has masked relatively flat sales in 2014 (see chart below). One way to spur sales is to make sure interested buyers have the opportunity to refuel or recharge when they’re on the go.

An infrastructure gap exists, largely because the private sector is reluctant to invest in ZEV refueling infrastructure without confidence that demand will materialize and there will be a return on investment.

C2ES has been studying this dilemma for more than three years, through our PEV Dialogue Initiative and AFV Finance Initiative. Both efforts aim to accelerate low-carbon vehicle sales, in part by identifying innovative business models that will encourage private investment in vehicles and fueling infrastructure.

The good news is the Multi-State ZEV Action Plan is filled with policies and activities that will help address some of the barriers to investment we’ve outlined. For example, charging infrastructure providers need flexibility in how they make money because electricity can be an awfully low-cost transportation fuel compared to gasoline. Charging at home is inexpensive and convenient, but more public and workplace charging stations are needed to get consumers comfortable with the idea of owning a ZEV. In the plan, the states highlight the need to modify electricity regulations so these charging infrastructure providers can enter new markets and deploy their business models.

At C2ES, we’re excited to be a part of the market transformation that’s underway. I’m writing this post from a conference near the headquarters of General Motors in Detroit. The iconic building is a reminder of the strength and influence the auto industry wields in the United States. With today’s release of the Multi-State ZEV Action Plan, eight states have made it clear they’ll be engaged partners, working to advance new, low-carbon technology that GM and other automakers develop.