The latest edition to the Tesla line is getting a lot of attention and promises to help accelerate the expansion of electric vehicles across the country. But Elon Musk and the electric vehicle industry (EV) might just hit a road hazard they didn’t see coming. The EV industry, particularly revolutionary engine technologies like those found in Mr. Musk’s Tesla, represent a giant leap forward in reducing vehicle emissions, improving air quality and combating climate change.
It all sounds great: new technologies, a slow but certain end for the inefficient internal combustion engine, and a road map for reducing fossil fuel consumption. But like so many things that sound this good, there is a catch. Electric utilities have already begun a stealthy and unfair practice of installing thousands of vehicle charging stations across the country financed on the backs of ratepayers.
Industry estimates project a compound annual growth rate in electric vehicle sales of approximately 20 percent, meaning that by 2024 EV sales would represent more than 1 million cars a year in the United States with massive increases thereafter between then and 2030. Nearly a dozen states have already set quotas for emissions-free vehicles to help spur the market along. This expansion will require the installation of a parallel fueling station infrastructure on a nation-wide basis.
The bill could reach into the billions of dollars over the next decade. Rather than charging consumers who actually use the stations, the utilities are opting to force everyone to pay for them. If electric utility companies are allowed to pass along the costs of the installation of this infrastructure to ratepayers, the vast majority of whom don’t own electric cars, the resulting backlash could be explosive.
Lower-income and middle class Americans, who already pay high energy prices, are not part of the EV revolution and will resist embracing the technology unless unfair practices like EV charging station subsidies by ratepayers are stopped now. To put it plainly, low and middle income ratepayers are paying for the charging stations of the rich and famous.
As more Americans realize that their utilities are either planning or are already using this unfair practice, the electric vehicle industry risks getting caught up in a national backlash from both sides of the political spectrum. Of course, conservatives will sound alarm bells about crony capitalism, corporate welfare, hypocritical environmentalists, and regulatory favors for large, publicly traded utilities.
The argument progressives will likely make would be even more powerful. True, electric cars like those made by Tesla, have a ‘cool factor,’ but more people buy them because they believe in the larger vision of a more environmentally sustainable future. This will pit environmental activists against economic justice advocates in a fight to create a market for electric vehicles which is struggling to get out of its infancy on its own.
There is an environmental justice component here as well. Changes in climate can impact everyone, but studies show that those disproportionately affected by poor air quality and the human health impacts that go along with it are largely lower-income populations.
It can’t be socially responsible, or progressive for that matter, for EV owners or the industry itself to permit ‘Big Power’ to pass along the costs of infrastructure to the people who can afford it the least.
If the future of EV is framed as the wealthy, white, and well-connected taking advantage of working-class Americans, the industry could very well be in real trouble in a political climate that is propping up the likes of both Bernie Sanders and Donald Trump. Electric Utilities are the establishment. Ratepayers are the unprotected class and the EV industry is about to get caught in the middle.
A 2014 report on the industry by Accenture lists the need for a range of government subsidies to fuel the industry’s growth, especially as it relates to developing charging infrastructure. Whether ratepayers are subsidizing charging stations they likely don’t use, or tax dollars are directed to develop this infrastructure, the end result is the same — the vast majority of Americans are footing the bill to manage what the Accenture report calls the “range anxiety” that is the major blocker to the industry’s expansion. After all, if you run out of power on I-95, your Tesla becomes an $80,000 paperweight.
With gasoline prices tanking and less pain at the pump for motorists, the transition to EV at least for now may slow. The last thing the industry needs is a working-class revolt that creates pressure in the media, and with state and federal officials. Regulators trying to meet ambitious emissions reduction goals are pushing for the industry’s growth. But, they haven’t felt the blowback of a public not willing to be pawns of an electric utility industry reluctant to wait for returns on its investment in EV charging stations.
The EV industry should distance itself from this unfair practice, while Washington and vehicle owners must send a message to ‘Big Power’ that the American consumer won’t stand for this kind of scheme.
• Brian Wise is president of the U.S. Consumer Coalition Fair Energy Initiative.