Electric Vehicle Adoption in California Could Increase Gross State Product by More Than $140 Billion: Report

JANUARY 29, 2020 BY EMILY HOLBROOK Utility Dive

(Credit: Pixabay)

Electrification of light-duty vehicles in California could be a potent catalyst for economic growth over the next 10 years. That’s according to a new study by Next 10 on the impact on the California economy if the state achieves electric vehicle (EV) adoption that is consistent with its climate goals.

The report, “Clean Transportation: An Economic Assessment of More Inclusive Vehicle Electrification in California,” was prepared by Berkeley Economic Advising and Research and assesses the economic implications of the projected increase in electric vehicle use with a long-term economic forecasting model — focusing on the policy milestone years of 2030 and 2050. Even under a relatively conservative baseline scenario that assumes no improvement in EV costs in the coming 10 years, EV adoption could result in significant economic benefits by stimulating the overall economy, reducing harmful pollution, and improving public health outcomes, the report notes. Other scenarios that consider anticipated drops in price and increase in innovation show even greater gains.

Key findings include:

  • Successfully hitting California’s 2030 GHG reduction goals with the scale of increased EV adoption modeled in this study would create more than 390,000 new jobs under a relatively conservative scenario — and more than half a million new jobs in the scenarios that account for steeper declining costs and increasing model choices.
  • By 2030, the Gross State Product would increase between $82 to $142 billion, depending on the scenario analyzed.
  • Real income (income adjusted for inflation) is projected to increase substantially, ranging between $311 billion to $357 billion in 2030.
  • This overall economic expansion has significant fiscal benefits – generating billions in additional revenue per year from existing tax instruments.
  • Looking out to 2050,the economic benefits increase by up to seven to eight times over those in 2030, depending on the scenario. Even under a relatively conservative estimate, California’s GSP stands to increase by about 5% by 2050. Under scenarios that reflect more likely vehicle cost reductions — the gains are almost twice as large.

The report notes that the manufacturing of fuel-efficient vehicles is already associated with 14,776 jobs in California — and more indirect employment could be generated through increased demand for charging infrastructure and utility load. The projected job growth and economic benefits noted in the study come from avoided fuel costs alone.

Other findings include:

  • Employment and income benefits are proportionately higher among Disadvantaged Communities (DAC) even though they represent only 25% of the state’s population. This is because the dollars spent from fuel savings will go primarily to goods and services industries — sectors that disproportionately employ DAC workers.
  • By 2050, the Innovation scenario—which assumes greater cost savings through improved technology costs — creates 1.182 million additional jobs across the state, with more than 36% benefiting DAC households.
  • The study focused on Los Angeles County and the Central Valley as 75% of the state’s DACs are in these regions. By 2050, under the Innovation scenario, DACs in both regions would see substantial incremental employment benefits (192 jobs created per DAC in LA County and 216 per DAC in the Central Valley).
  • Air pollution reductions from large-scale electric vehicle adoption also benefit DAC households more than higher-income groups. The study found that in an equity scenario, the economic value of health benefits from the reduction in pollution would amount to $2 billion by 2030 — including $800 million from avoided mortality and $1.2 billion from averted medical costs.

“The benefits to GSP and income are much larger than some other climate policies, including California’s cap-and-trade program and far exceed the funds committed thus far to clean vehicle incentive programs,” noted David Roland-Holst, BEAR Managing Director and Economics professor at UC Berkeley, and lead author of the report. “Studies have shown that incentives are successful in helping car buyers opt for cleaner alternatives, and what we see here is that increased EV adoption, especially in lower-income communities, can have a measurable and lucrative payback.”

Currently, the state is planning to significantly curtail budgeting for electric car and light-duty SUV incentives.

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Forbes EDITORS’ PICK|Jan 29, 2020

UPS Jumps Into The Future With Plan To Buy 10,000 Electric Vans And A Waymo Self-Driving Delivery Pilot

UPSArrival
UPS is adding up to 10,000 Arrival electric vans to its delivery fleet. ARRIVAL

UPS is making moves to create a cleaner, more high-tech fleet with plans to buy up to 10,000 electric vans from a U.K. startup that it’s investing in. It’s also launching a package pickup trial in suburban Phoenix with self-driving tech leader Waymo. 

The delivery giant says the futuristic vans will be built specifically for its operations by London-based Arrival. Initial deliveries start this year and continue through 2024. UPS Ventures also bought a minority stake in Arrival, though neither company is providing a value for that investment. Hyundai and Kia bought a 100 million euro ($110 million) stake in Arrival two weeks ago. UPS isn’t saying what it’s spending, but assuming each van costs about $40,000, the base price of a conventional Mercedes-Benz Sprinter model, the deal could be worth $400 million or more. The plan is also contingent on successful tests of the first batch of vans, UPS says. 

“These vehicles will be among the world’s most advanced package delivery vehicles, redefining industry standards for electric, connected and intelligent vehicle solutions,” said Carlton Rose, president of UPS Global Fleet Maintenance & Engineering. The vans will be equipped with Advanced Driver-Assistance Systems tech to maximize safety and operating efficiency and UPS will test them in limited automated applications at its depots. They’ll have service range of 100 miles per charge.Today In: Transportation

ArrivalVan
U.K.-based startup Arrival says its Generation 2 electric vans exceed the performance of … [+] ARRIVAL

The Arrival deal comes after Amazon unveiled plans to green its delivery fleet, with plans to purchase 100,000 battery-powered vans from U.S. startup Rivian, which is also preparing to build and sell electric pickups and SUVs late this year. Tough emissions rules in California, Europe and other global markets due to rising concern about the impact of carbon pollution from cars and trucks have triggered a wave of electric commercial vehicle plans from companies including Tesla, Nikola, Daimler, Volvo, busmaker Proterra and dozens more. While they’re generally more expensive than gasoline or diesel models, operating costs for electric trucks and vans are typically lower owing to cheaper fuel and maintenance costs. 

PROMOTED

Van
Arrival’s Generation 2 vans have a mass front windshield. ARRIVAL

Arrival claims its Generation 2 vehicles–with sci-fi looks and a vast, wraparound windshield and built from a flexible skateboard-style platform–cost the same as conventional vans but have better overall performance. One unique aspect is its approach to assembly, with plans for micro-factories near where vehicles will be delivered and using lightweight, long-lasting sustainable materials it’s developed in-house. Driving range per charge is up to 300 kilometers (186 miles) based on the European test standard, said Arrival spokeswoman Imogen Pierce.

Founded in 2015 by CEO Denis Sverdlov,Arrival hired long-time General Motors executive Mike Abelson late last year as CEO of its North American unit. The company previously said it was testing vehicles with UPS, as well as with DHL and the Royal Mail. It has a manufacturing facility in Banbury, England, and aims to ramp up production in 2021.

Generation 2 electric vehicles “are better in price, design and experience than traditional fossil fuel vehicles and existing EVs,” Arrival Chief Strategy Officer Avinash Rugoobur said. “This gives fleet managers a highly compelling commercial and environmental reason to switch to electric and will accelerate the adoption of electric technology globally.”

Currently, UPS has “approximately 1,000 electric and hybrid electric vehicles in our alternative fuel and advanced technology fleet,” spokesman Kyle Peterson said.  

Waymo Package Pickup Pilot

The paid project with Waymo is equally unique. Alphabet’s self-driving tech unit will modify Pacifica Hybrid vans from its robotaxi fleet in Chandler, Arizona, removing passenger seats to expand cargo capacity. The autonomous vehicles will pick up packages dropped off at UPS stores in the area and haul them to a metro Phoenix UPS logistics facility. A backup Waymo driver will be on board to monitor operations. The companies want to see if this particular application of self-driving tech improves customer service and network efficiency. Financial terms of the project weren’t disclosed.

“Getting packages to our sortation facilities sooner and more frequently, while also creating an opportunity for later drop-offs for next-day service, can add enormous value for our customers,” said UPS chief strategy and transformation officer Scott Price. 

Neither company will say how much UPS is spending on the program, how long it will last or how many vehicles will be used.

Waymo and UPS also say they’re exploring longer-term plans to work together, though this initial project doesn’t include self-driving semi-trucks Waymo has tested the past few years. Last year UPS invested an undisclosed amount into robot truck startup TuSimple and done long-haul highway runs with it in Arizona

Waymo’s core focus has been commercializing its robotaxi service that’s based in Chandler, but CEO John Krafcik has also made autonomous trucking and deliveries a priority for the company that began as the Google Self-Driving Car Project in 2009. Last week the company expanded testing of both Pacifica vans and long-haul semi-trucks from Arizona into Texas and New Mexico. “These are interesting and promising commercial routes, and we’ll be using our vehicles to explore how the Waymo Driver might be able to create new transportation solutions.”

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Alan Ohnsman

Alan Ohnsman