Can U.S. Infrastructure Keep Up with the Rising Demand for Electric Vehicles?

Recently, several car companies have committed to going electric over the next two decades, but stumbling blocks on both the consumer and production sides raise eyebrows as to the reality of those goals.

As the adoption of electric vehicles (EV) seemingly indicates a win-win compromise in which the general American public continues to drive cars while the environment improves thanks to clean energy, the auto industry continues to see companies announce their intention to switch over to producing EVs.

For example, Nissan plans to drop eight new models by the end of 2023 with a goal of selling 1 million electric or hybrid vehicles per year globally, and GM plans to stop production of combustion engine vehicles by 2035. In addition, the following carmakers have set a target of producing and selling only electric cars: Jaguar (by 2025), Bentley (by 2030), Cadillac (by 2030), Lotus (by 2030), BMW’s Mini (by 2030) and Volvo (by 2030).

Country-wide efforts have also been made to prohibit the sales of fossil fuel vehicles - the most notable legislation that has driven the transition to electric. Norway, France and the United Kingdom declared intent to ban all conventional cars by 2040, with Norway planning to do so by 2025. The list expanded to include Austria, Iceland, Spain, the Netherlands, Ireland, Singapore, Costa Rica, India, Israel, Korea, Germany and many more.

The transition to EVs demands several significant components, however: mining of necessary battery materials, charging station availability, and power grid strength.

The fight over rare-earth metals

China controls the processing of nearly 60% of the world’s lithium, 35% of nickel, 65% of cobalt, and more than 85% of rare-earth elements – all of which are necessary in producing EV batteries. Accordingly, China’s dominion over these precious raw materials has made it difficult for the U.S. to lower the cost of production on EV batteries.

The U.S. has some of those materials available within its borders, but authorities need to start shortening timelines for approval so companies can kickstart mining for those materials sooner than later.

“I think America in 2022 will be interesting because we’re moving into that zone of investments, and that’s where the fight over resources will become interesting,” Electra Battery Materials CEO Trent Mell argues. “It’s really going to be a U.S.-vs.-China story for the next few years.”

Power-struggle: Charging stations and Grid-demand

Property owners and power companies will need to install the charging stations to service owners and keep down domestic electric bills, but that will increase the demand on a city’s power grid if everyone needs to charge their vehicles - not to mention develop the capability to fast-charge vehicles so drivers don’t wait a long time to fuel up.

Ryan Sitton, a former Texas energy regulator and founder and CEO of Pinnacle Reliability, stated that nationwide EV adoption would likely impose a roughly 30% increase in demand on the national grid, and Elon Musk has said it would double total global demand for electricity.

“If you said, ‘What’s it going to take to produce 30% more energy reliably?’ that is a massive undertaking. That isn’t something we’re going to do by tweaking a power plant here or there,” says Sitton, pointing to grid issues California already faces with regular brownouts using its current power systems.

Hence, significant investments will have to be made in the near future to service enough power stations and to keep up with the increase in grid demand, and to achieve that while only using clean energy will only overburden the issue.

All in all, whether the U.S. will be able to maintain some autonomy as to mining raw materials required for the production of EV batteries to lower the cost and whether its infrastructure will keep up with the fast increasing demand for EVs remains to be seen.