What Can Oil & Gas Companies Expect of the U.S. EV Market? 

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The road ahead for electric vehicles (EV) is a promising one when it comes to reducing carbon emissions. Many eMobility solutions and initiatives at both the state and federal levels are accelerating EV growth and the rollout of the foundational charging infrastructure needed to power both consumer EVs and commercial EV fleets.  

Let’s take a look at the demand itself. About 1.2 million U.S. vehicle buyers chose electric in 2023, reaching all an-time high so far, according to estimates from Kelley Blue Book. Consider that 2023 recorded 15.5 million light vehicle unit sales (cars and trucks) overall. So there is a way to go for market parity. But the tides certainly are turning. Specifically, the aggregated 2023 sales of hybrid vehicles, plug-in hybrid electric vehicles, and battery electric vehicles (BEV) in the United States reached 16.3% of total new light-duty vehicle (LDV) sales. That figure is up significantly from 12.9% in 2022. 

Where the rubber hits the road for the U.S. EV market 

While consumer sentiment is embracing electric in record numbers, there are three main areas that must evolve pragmatically to enable a widespread shift to EVs.  

EV charging infrastructure 

The EV charger infrastructure needed to support demand lags consumer demand for the EVs themselves, despite committed efforts to connect the electric dots across the U.S. infrastructure landscape in both public and private settings. Although more than 1,000 new EV stations came online in the U.S. in the second half of 2023, representing a 16% increase, there is a need for more charge points than available to make the switch to EVs more feasible for consumers who are wary of the lack of charging infrastructure.  

Specifically, the United States will need 28 million chargers by 2030 to meet EV demand, assuming half the passenger vehicles are EVs in line with federal targets. This figure includes both private and public charging points, which will require smart charging and fast EV charging capabilities. This fast-growing demand represents a leap of 34% each year. Can the grid keep up? 

Power capacity for the U.S. EV market 

As demand for EV charging infrastructure grows, so, too, does power capacity. The Environmental Defense Fund (EDF) analysis has determined that more than 1,000 gigawatt hours per year of U.S. EV battery production capacity has already been announced to come online by 2028. That’s the equivalent of what is needed to power 10 million electric cars – and is more than enough to supply all the electric vehicles that the U.S. Environmental Protection Agency projects could be sold in 2030. The burning question, though, is how many of these announced projects will actually materialize? 

It is important to keep in mind that government programs are striving to make prices more palatable for consumers, offering EV buyers incentives to shift from gas-powered vehicles. For many U.S. auto buyers, a $7,500 federal subsidy toward the purchase price may tip them in the direction of an EV. What’s more, several states offer an additional credit between $1,000 and $7,500 for going green. These incentives are never guaranteed for the long term, however, and it is important to keep in mind that the U.S. is in an election year. 

We hope these market and incentive programs suggest that the future of EVs is becoming a bright one, but the market could face tenuous political outcomes. Regardless, the rise of EV solutions is having major implications for the U.S. Oil & Gas industry. Fortunately, the industry is responding by investing in innovation to speed up the development of fossil-fuel alternatives such as biodiesel. It’s no wonder, for instance, that “the global biodiesel market is expected to witness a compound annual growth rate of 10.0% from 2022 to 2030 to reach USD 73.05 Billion by 2030.” The industry also has integrated the fact that plastics and petrochemicals will represent the majority of oil consumption growth instead of transportation fuels moving forward. 

Although the adoption of EVs in the U.S. has not yet reached a tipping point, there are key measures that can be taken to accelerate their acceptance rate and foster a self-sustainable industry, however. Government incentives, the establishment of electric vehicle battery plants, and collaboration with utilities can collectively reduce barriers to advancing widespread EV acceptance. This momentum will significantly benefit consumers, the industry, and the environment.  

The adoption of microgrids 

Resilient microgrids can be the key to linking renewables, EVs, and advanced software systems by providing real-time optimization of diverse energy sources. Microgrids are especially optimal for EV fleet energy management. 

There are 4 drivers for integrating EVs and microgrids: 

1. With an 18–24-month time frame, traditional utility upgrades take too long. 

2. The reliability of the U.S. grid is declining. 

3. EVs can provide grid services by intelligently managing the use of their onboard batteries. 

4. Advances in digitalization controls mean EVs can be integrated into distribution networks. 

Already Schneider is balancing the electricity supply and demand challenge related to EV adoption. In Montgomery County, Maryland, for example, we worked with AlphaStruxure to deliver energy as a service (EaaS) microgrid to enable the County to shift 70 county buses from diesel to electric to help it become net zero by 2035. A 6.5 MW microgrid with backup power supports the Brookville Bus Depot’s charging stations for resilient, clean energy. Montgomery County anticipates avoiding 160K tons of CO2 over the 25-year project. 

What does the U.S. EV market mean for Oil & Gas? 

While the shift to EVs will have a sizeable impact on the Oil & Gas industry, there is a great opportunity as well. As petroleum engineer Ian Palmer recently outlined in Forbes, the New Mexico Oil and Gas Association (NMOGA) points out considerations related to: 

• The dependence of EV charging stations on materials and energy derived from oil and gas; 

• The role of petrochemicals in lithium-ion batteries; 

• Plastics, polymers, and rubber for EV parts; and  

• Petroleum-based cooling systems and lubricants in electric motors and powertrains. 

What’s more, there is a complementary economic opportunity for gas/electric station operations to improve and monetize the customer experience. Even with fast EV charging, an EV owner would need to spend 15 minutes to recharge their car on a highway stop. They could spend these 15 minutes buying snacks, enjoying high-quality wifi, drinking coffee, etc. This behavioral shift holds promise.  

Certainly, all EV and Oil & Gas stakeholders are keeping a sharp eye on what to expect on the road ahead for EVs. 

Discover more in the Harvard Business Review Research Paper Creating a Successful Plan to Electrify Mobility and Transportation Infrastructure (schneider-electric.com)