Anne Kelly is senior director of policy and the business for innovative climate and energy policy (BICEP) at Ceres, a sustainability nonprofit organization. Ellen Hughes-Cromwick is a senior economist and associate director of social science and policy at the University of Michigan Energy Institute.
Today’s vehicles are getting smarter, cleaner and more connected. These changes bring great opportunities for growth and innovation, especially as we approach the imminent transition to electric vehicles (EVs). With a new governor at the helm and newly elected lawmakers in the Legislature, there are significant opportunities to advance data-based policies and regulations that increase access to EVs right here in Michigan and ensure that the benefits of clean transportation are shared by all.
The recent election comes at a time when a comprehensive strategy for advanced transportation is needed to keep our state on the cutting edge of this changing industry. Newly elected officials should build upon the progress that’s been made on clean mobility in our state. That means understanding challenges and opportunities for EV growth in Michigan as well as the role that policy and regulation play as we transition to a cleaner transportation system.
As the home of the auto industry, Michigan has long been a hub for innovation in transportation. However, other states are investing heavily in research and development and putting in place policies that create a more supportive climate for growth. A whopping 37 states currently have policies in place aimed at encouraging the development of a local clean vehicle market. Despite our rich automotive history, Michigan is not one of them.
Many companies, hospitals and higher education institutions across the country are seeking greater access to EVs for their businesses, employees, customers, students and more. In order to meet the growing demand and ensure Michigan is on the cutting edge of this transition, public and private sector leaders need to move quickly to develop a collaborative plan to capture the full range of economic benefits that EVs can bring to the state.
Companies and institutions are also increasingly looking to states and utilities to support the adoption of EVs and the associated charging infrastructure. EVs can dramatically reduce transportation emissions while also minimizing fuel and maintenance costs compared to conventional vehicles. In addition, off-peak EV charging can take pressure off the grid - helping all ratepayers save money on their electricity bills.
With the right structures in place, Michigan can ensure that all ratepayers are able to reap widespread benefits from EV expansion—from reduced electricity rates to cleaner air and protection from gas price volatility. In fact, a Ceres report found that the benefits of EVs outweigh the cost of investment by more than three to one.
To propel the expansion of EVs, Michigan needs programs and incentives that support the growth and transformation of the EV market. EV technology is rapidly improving while the cost is decreasing. Bloomberg NEF estimates that EVs will reach up-front cost parity with conventional vehicles by 2024, without subsidies. And that analysis does not even consider the long-term savings. However, we need policy and regulatory solutions to help us get there and bridge the gap.
In addition, we must remove barriers to installing EV charging infrastructure. Fortunately, both major utility companies here in Michigan, DTE Energy and Consumers Energy, have submitted plans to the Michigan Public Service Commission for charging networks, which would increase the number of charging stations and ensure a rate structure is in place to accommodate EV drivers. Sustained coordination between Michigan policymakers, utilities, automakers and others, as well as concrete programs to enable EV deployment, would help to jumpstart adoption of this important technology.
However, adoption of EVs alone is not a clean solution for Michigan as long as the majority of our electricity is supplied by coal. To fully capture the economic and environmental benefits of a clean transportation, we need a multi-pronged approach that includes an accelerated transition to more renewable energy.
These are huge opportunities for Michigan. We have the industries, innovative institutions and universities, and history to lead the transition to clean transportation. Doing so would allow our state to capture a myriad of economic benefits, bolster the auto industry and, in the future, deliver cleaner air to our residents. To make this vision a reality, we need a collaborative effort from businesses, institutions, public sector leaders and others. Let’s work together to ensure that the benefits of clean transportation are shared equally among all Michiganders.