On Thursday, August 5, 2021, President Joe Biden met with executives from General Motors, Ford, and Stellantis (formerly known as Fiat Chrysler) at The White House to promote a new executive order encouraging an aggressive transition to electric vehicles. In each of the last three years, electric vehicle sales in the U.S. accounted for just two percent of all vehicles sold. By 2030, President Biden’s goal is for the share of electric vehicles sold to account for 50% of the market.
The executive order is non-binding and will be largely dependent on significant investment from both the public and private sectors. It is estimated that it will require roughly $100 billion in spending over the next few years to reach the target. The primary cost centers for this ambitious goal include the lithium batteries, charging stations, and actual infrastructure and labor costs associated with assembling the vehicles.
While the order does have support of ‘The Big Three’ automakers who attended Biden’s press conference, there are significant hurdles that need to be addressed for the goal to come to fruition. Most notably is the lithium needed in the batteries. As of 2020, just 400,000 tons of lithium was mined globally. If the rest of the world follows suit with EV goals, then it is expected that lithium output would need to grow by over ten times and mine an additional five million tons each year.
There are 150,000 gas stations in the United States and far less public EV charging stations. This extraordinary shift will undoubtedly require exponential growth of EV charging networks and create additional power demand on the local energy grid. Local ISO’s will need to plan for the additional capacity requirements in coming years and be prepared to meet incremental demand.
Atlas Retail Energy is keeping a close eye on regulatory changes and market trends that impact client’s energy budgets. Please reach out to discuss your current long-term energy strategy and learn how Atlas can help navigate the complexities of the ever-evolving deregulated energy landscape.