Electric Vehicles


  • Sales of plug-in electric vehicles (PEV) are growing, but still only make up about 1 percent of U.S. auto sales.
  • The average PEV in the United States produces fewer greenhouse gas emissions than a typical gasoline-powered hybrid.
  • Purchase incentives and publicly available charging infrastructure help encourage PEV adoption.

Plug-In Electric Vehicles (PEVs) are a relatively new but growing segment of the vehicle market. They are powered by a domestic, reliable fuel source, and can reduce greenhouse gas emissions and improve local air quality. Innovative policies and promotional activities can accelerate their adoption, helping decarbonize transportation.

What is a PEV?

Plug-In Electric Vehicles (PEVs) can operate entirely on an electric motor and be powered from an exterior electricity source. The two basic types of EVs are typically referred to as battery-electric vehicles (BEVs), or sometimes all-electric vehicles, and plug-in hybrid electric vehicles PHEVs.

BEVs exclusively use electric motors powered by energy stored in battery packs to propel the vehicle. The energy stored in BEV battery packs is typically enough to achieve at least 90 miles on a single charge, though technological and manufacturing breakthroughs will soon likely allow ranges approaching or surpassing 200 miles.

PHEVs may be powered exclusively by electric motors in battery packs, which are considerably smaller than BEV battery packs, but are also supported by a secondary drive option. Some models feature a gasoline-powered engine, whereas other models feature a gasoline-powered generator that powers the drained battery (the latter style is sometimes referred to as an extended range electric vehicle).

Different Types of Electric Vehicles

Electric vehicles (EVs) can be extended range EVs, plug-in hybrid electric vehicles, or battery electric vehicles.

PEVs charge by plugging into one of three types of charging stations:

  • Level 1 charging uses alternating current and a standard outlet to provide approximately 3 kilowatts of power, or approximately 4-5 miles of charge per hour.
  • Level 2 charging also uses alternating current and a high-power circuit to provide approximately 6-7 kilowatts of power, or approximately 12-26 miles of charge per hour depending on the vehicle charging capacity.
  • DC fast charging (sometimes known as Level 3) uses direct current to charge vehicles rapidly, typically in less than half an hour at rates of up to 50 kilowatts.

The Electric Vehicle Market

The mass-produced PEV market sprang to life in late 2010, when GM released the plug-in hybrid Chevy Volt and Nissan released the all-electric Leaf. New models have been gradually introduced, though sometimes with limited availability outside California and the Northeast. PEV sales initially grew rapidly, but began to flatten after oil prices began dropping in mid-2014, with year-over-year sales remaining about constant through 2016. The flattening of the PEV adoption curve mimicked the market for fuel-efficient cars overall during times of low oil prices.

The PEV market has started to grow again and shows potential to rapidly expand. Year-over-year sales in the first half of 2017 are 50 percent higher than sales in 2016, and the PEV share of new vehicle sales exceeds 1 percent.

Analysts from the International Energy Agency, OPEC, and several oil companies have substantially increased their estimates of PEV growth in the past year, by up to 500 percent. Bloomberg New Energy Finance and Morgan Stanley both predict that new global PEV sales will outnumber traditionally fueled vehicle sales by 2050, if not sooner.

Reasons for the optimistic outlook include large-scale automaker commitments to PEV manufacturing, governments announcing plans to ban gasoline- and diesel-powered cars, and expectations for lower costs and better performance of PEV batteries.

Benefits of Electric Vehicles

Transportation is the largest single source of U.S. greenhouse gas emissions, with light-duty passenger vehicles accounting for approximately two-thirds of those emissions.

By using efficient electric motors and plugging into a grid using more renewables, PEVs can significantly reduce greenhouse gas emissions. According to an analysis by the Union of Concerned Scientists, the average PEV produces greenhouse gas emissions equivalent to a gasoline-powered car that get more than 70 miles per gallon. (The average new car in the United States achieves 25.3 miles per gallon.)

Electrified transportation is expanding beyond light-duty vehicles. Heavy-duty truck engine manufacturer Cummins and PEV manufacturing leader Tesla have developed electric drivetrains for tractor trucks. Thousands of BEV transit buses have been deployed around the world. Other heavy-duty PEVs are being tested and developed, from school buses to port and mining equipment.

Electrification also benefits local populations by reducing tailpipe emissions (criteria air pollutants produced by gasoline- and diesel-powered engines) that can harm the heart and lung health of people living near roads.

The electricity that powers PEVs is produced domestically and is inexpensive when compared to gasoline and diesel. The transportation system and U.S. dependence on oil are fundamentally intertwined. In 2016, 97 percent of delivered energy to the U.S. transportation sector was from petroleum. Reducing reliance on oil, and particularly foreign oil, creates a more stable market because electric prices are much less volatile than oil prices (see chart below compiled by research from the Edison Electric Institute). Moreover, the efficiency of electric motors makes PEVs more affordable to operate. According to research by Idaho National Laboratory, the operating cost of a mile traveled in a PEV can be 3-5 times less than a mile powered by gasoline.

U.S. Transportation Sector Greenhouse Gas Emissions by Source

Energy-Related Carbon Dioxide Emissions by Sector (MMtCO2), 2000–2016

Gas Prices Over Time

Policies and Barriers

Consumers are adopting greater numbers of PEVs, but the market may still need some support to compete against the incumbent fuel sources, gasoline and diesel. The International Council on Clean Transportation estimates the value and impacts of these incentives in the 50 largest U.S. cities, finding that purchase incentives and readily available charging are linked to higher PEV adoption. Other incentives and policies include HOV lane access, emissions waivers, or special utility rates to charge PEVs.

Purchase incentives reduce the upfront costs of PEVs, which have been more expensive than equivalent gasoline-powered cars due mostly to the additional costs of the batteries. Federal tax credits are worth up to $7,500 per vehicle, although each automaker’s eligibility sunsets after 200,000 vehicles are sold. Many states offer rebates, tax credits, or tax waivers worth between $500 and $6,000.

Publicly available charging assures PEV drivers that they will reach their destination, reducing “range anxiety.” States and cities may work with private charging service providers, electric utilities, or automakers to expand charging networks. Establishing public charging in multi-unit dwellings, workplaces, and transportation hubs, and installing DC fast charging along travel corridors will be especially important.

Alhough federal fuel economy standards do not explicitly promote PEV adoption, 10 states are following California’s ZEV (Zero Emission Vehicle) program that requires automakers to sell PEVs or hydrogen fuel cell vehicles. Automakers are required to earn enough credits through either selling ZEVs or purchasing credits to meet state requirements designed to reduce greenhouse gas emissions and improve air quality.