Electric Vehicles Are Driving Rates Down for All Customers

Electric vehicles (EVs) offer a key opportunity to reduce harmful emissions and save consumers money at the same time. EVs are responsible for far fewer greenhouse gases and local air pollutants than conventional vehicles and become cleaner as more renewable electricity is added to the grid. In addition, EVs are generally much cheaper to operate than conventional vehicles. The number of EVs on the road are rapidly growing and increasing in share among light-duty vehicles. By the end of 2022, more than 3.2 million EVs had been sold in the US alone. Federal, state, municipal and industry action to incentivize and increase the adoption of EVs promise to accelerate this transition. The new electricity load and flexible demand represented by these vehicles has major implications for our future energy system and could increase total electricity use by 25 percent. By charging during hours of the day when there is least demand on the grid, however, the electric vehicle transition could reduce electric rates for everyone. Evaluating the impact of electric vehicles on the road today can help us understand their effect on the grid and how they might shape the power system in the future. Accordingly, this analysis examines costs and revenues associated with EVs between 2011 and 2021 across the United States. We observe that over the last 11 years, EV drivers across the United States have contributed approximately $3.12 billion more than their associated costs, driving rates down for all customers. When we also include utility expenditures for EV programs, EV owners have contributed approximately $2.44 billion more in revenues than in costs.