Technologies and Key Policy Trends


More than 1 million electric vehicles (EVs) are currently on the roads in the United States (see Figure 1).1 These principally battery-powered EVs and plug-in hybrid EVs run on gasoline and electricity.2

EVs’ many benefits are making them an attractive choice for consumers. Compared with the hundreds of working parts in a traditional internal combustion engine, battery- powered EVs contain only a handful of moving parts and thus requiring less maintenance.3 In addition, batteries respond more quickly than conventional engines, creating cars that are more responsive, have more torque and are quieter.4 EVs produce no tailpipe emissions and, depending on the source of electricity, their fuel can be produced emissions free. EVs are typically more digitally connected than conventional vehicles5 and have become the platform of choice for autonomous vehicle developers.6


Although still a small part of the national fleet, EV sales are increasing quickly. Predictions for the anticipated growth of U.S. EV sales vary greatly, but most forecasters (including the major oil companies) anticipate significant EV market growth and have continually revised their forecasts upward year after year.7

Automakers are investing heavily in EVs, with $90 billion expected to enter the mark over the next decade.8 In addition, 43 brands are expected to offer at least one EV option in the next four years,9 including sport utility vehicles (SUVs) and pickup trucks.10 Approximately 261 models are projected to be available by 2025.11

Key Policy Trends

  • State support for EVs remains strong

  • New wave of EV models highlights need for public EV charging infrastructure

  • The EV industry is moving on its own to address the EV charging station infrastructure gap

Opportunities, Challenges
 and State Solutions


Electrifying the transportation sector offers a range of environmental, health and economic benefits. First, transportation is the largest source of U.S. anthropogenic greenhouse gas (GHG) emissions, having reached 36% in 2017.1 Electric vehicles (EVs) produce no direct tailpipe emissions, which helps reduce urban air pollution and address GHG concerns. EVs also typically produce fewer life cycle emissions than conventional vehicles because power plants with modern pollution-control equipment are far cleaner than cars burning gasoline or diesel fuel, although the exact level of pollution benefit varies based on the local electricity mix.2

In addition to reduced fuel costs, EVs have significantly fewer moving parts than conventional vehicles,3 which reduces the consumer’s life cycle maintenance costs.4 EVs may also be useful in smoothing electricity demand by encouraging refueling at times of excess generation and potentially providing power back to the grid during peak hours of demand.5 Meanwhile, public enthusiasm for EVs continues to grow.6


To achieve wide-scale adoption, EVs need to overcome several challenges. First, most consumers are unfamiliar with the technology and the array of vehicle options and incentives available.7 The high upfront costs for most EVs creates another barrier, although some experts predict that the cost of purchasing an EV will be less than a conventional vehicle by as soon as 2022 because of rapidly declining battery costs.8 Broader EV adoption will call for widespread public EV charging infrastructure.9 In addition, there are concerns that extensive adoption of EVs will cause stress on the existing electricity distribution infrastructure and drive the need for enhanced price signals.10

State Solutions

Governors have successfully advanced a range of state policies to accelerate adoption of EVs:

  • Offer “cash on the hood” rebates

  • Use electric utilities to bridge the EV infrastructure gap

  • Invest Volkswagen’s settlement funds in EV charging stations

  • Provide financial incentives for EV supply equipment

  • Offer incentives beyond rebates

  • Use the state vehicle fleet to lead by example

  • Establish zero emission vehicle (ZEV) mandates

  • Incorporate transportation electrification into state and utility planning

  • Update energy building codes to require EV-ready buildings and homes

State Solutions Spotlights

Governors have successfully advanced a range of state policies to accelerate adoption of electric vehicles (EVs).1

Offer “cash on the hood” rebates

With Tesla and General Motors (GM) already having reached the 200,000-vehicle limit for the federal EV tax credit,2 state incentives have become even more important (see Figure 3). Thirteen states — California, Connecticut, Colorado, Delaware, Louisiana, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Texas and Washington — offer their own rebates or tax incentives for the purchase of a new EV.3 Washington has also created a rebate for the purchase of a used EV that retails for less than $30,000.4

Ranging from $1,500 to $5,000, these “on the hood” incentives, that provide more immediate incentives than tax credits, have proven extremely effective. Revealingly, jurisdictions — including Georgia — that have removed or let sunset their EV tax incentives have experienced sales drops of more than 50%.5

Use electric utilities to bridge the EV infrastructure gap

Residential EV drivers do 80% of their EV charging at home,7 but broader EV adoption will necessitate widespread public EV charging infrastructure. Some estimate that EV charging infrastructure deployment must grow by 20% annually to meet a projection of 3 million EVs on the road by 2025.8

To prepare for this growing demand, states are exploring how best to use their publicly regulated, investor-owned utilities to build the needed EV charging network. Several states, including California, Oregon and New Mexico, have recently enacted laws requiring their public utility commissions (PUC) to review utility EV infrastructure programs.9 State PUCs have already approved roughly $1 billion in utility EV infrastructure investments, and utilities have already proposed another $1.5 billion in additional investments.10 Consider the following state spotlights:

  • Maryland

  • Michigan

  • New York

Invest funds from the Volkswagen diesel settlement in EV charging stations

As a result of Volkswagen’s diesel emissions tests cheating, the company agreed to pay U.S. states almost $3 billion to reduce air pollution, of which 15%, or about $450 million, can be used for EV charging infrastructure.16 Consider the following state spotlights:

  • Colorado

  • Virginia

Provide financial incentives for EV supply equipment

Twenty-seven states offer incentives to defray the costs of installing EV supply equipment for residential, commercial and retail service stations.19 The price of a Level 2 residential charger ranges from $500 to $2,000 for the charger and professional electrical installation.20 Program details vary; for example, Oregon is offering $300 customer rebates and Utah’s Rocky Mountain Power utility is offering up to 75% off of equipment costs.21

Offer incentives beyond rebates

States are using a creative range of incentives beyond rebates to accelerate EV adoption. Thirteen states allow EVs to use HOV lanes or provide special parking privileges.22 A different set of 14 states exempt hybrid or electric cars from emissions testing.23 Other incentives include discounts on tolls and reduced rates for charging.

Use the state vehicle fleet to lead by example

State governments own approximately 500,000 vehicles, which cost more than $2.5 billion annually to operate and maintain.24 With fewer moving parts than gasoline-powered engines and less expensive fuel costs, EVs are an attractive option for state fleets.

To date, 28 states have EV or hybrid fleet requirements, acquisition goals or preferences for the procurement of EV or hybrid vehicles.25 California has established a process to ensure that, through normal fleet replacement, at least 50% of light-duty vehicles are ZEVs by 2025.26 Colorado aims to purchase at least 200 EVs for the state fleet by 2020, whereas Illinois has a goal of 15% EVs by 2025.27 Washington Gov. Jay Inslee issued a 2018 executive order that requires state agencies to prioritize the purchase or lease of EVs.28

Establish zero emission vehicle (ZEV) mandates

ZEVs include full battery EVs, hydrogen fuel cell vehicles and plug-in hybrid-electric vehicles. California established its first ZEV regulation in 1990 to require automakers to offer for sale specific numbers of EVs to continue selling cars in the state.29 Nine states — Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island and Vermont have adopted California’s ZEV mandate.30 Together with California, these states represent nearly 30% of new car sales in the United States.31 Consider the following state spotlights:

  • California

  • Colorado

Incorporate transportation electrification into state and utility planning

The impacts of nascent electrification on transportation ripple across state governments, including transportation agencies, PUCs, environment departments and energy offices. Many governors have created interagency work groups to help identify and navigate the opportunities and challenges.35

In addition, states are learning to integrate growing EV adoption into other ongoing planning activities. For example, utility integrated resource plans are increasingly considering the impact of EVs on overall resource adequacy and distribution system planning. Similarly, state environmental agencies are calculating the reduced emissions in their congestion mitigation and air quality planning processes.

Update energy building codes to require EV-ready buildings and homes

One way to reduce the cost of installing the EV charging infrastructure needed is to incorporate it into ongoing construction activities. For example, Oregon Gov. Kate Brown issued a 2017 executive order that, among other things, required parking structures for all newly constructed residential and commercial buildings to support the installation of at least a Level 2 charger by Oct. 1, 2022.36 Similarly, in Vermont, commercial and residential projects over a certain size are required under the state’s energy building code to include a percentage of EV supply equipment or EV-ready parking spaces.37

Download The Full Toolkit

NGA’s State Energy Toolkit offers ideas to help governors respond to trends as they take action in their states.

  • Overviews of Technologies & Policy Trends

    Understand the landscape and see what’s on the horizon.

  • Opportunities, Challenges & State Solutions

    Meet state goals for advancing clean energy.

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