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Concentration of CO2 in the Atmosphere

A Quick Assessment of Economic Impact of Electric Vehicles for New Hampshire

Source: Department of Energy at Energy.gov

Randy Bryan

One topic I did not spend enough time talking about at the New Hampshire Innovation Conference (see page 7 for more information) is how electric vehicles (EVs) can help New Hampshire’s economy. This economic view of clean technology is critical to reaching a broader audience and understanding. I offer my analysis of EV benefits to New Hampshire.

I’ll be brief: Nevada recently did a study and identified over $20B in benefits over ten years by going to all EVs.

For my NH analysis, I’ll assume the cost of EVs reaches parity with combustion vehicles by 2023+, and EVs’ costs will continue to decrease (volume production and battery cost reductions) versus combustion vehicles, creating purchase savings versus combustion vehicles in the long run. The proposed Federal tax credit of $7000 may improve the purchase savings to NH owners in the short run.

In 2018, there were 714,000 Light Duty Vehicles (LDVs) in NH. Of that, about 2000 were plugins.

For the end of 2020, we’ll assume there are about 700,000 LDVs in NH, including 4200 plugin cars. Average vehicle life span is about 11 years, so 1/11 the cars are replaced each year.

Transportation is now the largest polluter in NH, and the state has no policy to control this. This article will inform how plugin electric vehicles (PEVs) are good for NH residents and its economy in a variety of ways. Ergo, faster PEV adoption is better for NH.

Health Savings: NH’s air quality in the highly populated areas can be poor, resulting in more premature deaths, higher healthcare costs and insurance, and lower work place productivity, to say nothing about our families’ personal health. Transportation is now the largest polluter in the State. EVs don’t pollute (Zero Emissions Vehicles, ZEVs). 2018 NH health cost from transportation pollution is estimated to be about $267M, and five to ten premature deaths per year (proportional extrapolation from other State’s studies). We’ll assume this is unchanged, though Covid 19 has probably disrupted this number.

Energy Savings: NH spends $2.8B (2016) on carbon fuel for transportation, where 75% of that fuel money ($2.1B) goes out of state. Grid electricity may have a similar percentage of dollar flights as fuel due to out of state ownership. (A guess, but I’ll assume no change to 2020.) However, a greater proportion of electric power is regionally owned, so some greater percentage of dollars have regional economic benefit, and therefore some benefit to NH. Solar electricity is an even better economic proposition, with one third of the system costs being NH sourced. Many NH EV owners have installed solar.

Ownership savings: EVs costing in the $30ks with 200-plus mile range have become a good fit for NH driving habits and pocketbooks. By 2022, there should be a selection of $25,000 EVs with 200+ mile range and used EVs are available at lower cost. The federal tax credit offers some savings in the short term, then the falling cost of batteries and EVs brings purchase savings in the longer run. I’ll use an average purchase savings of $1500.

Grid electricity is about half the cost of gasoline and diesel per mile. Maintenance is one third of the cost. Yearly fuel-maintenance savings can total $500 to $1000 per year (about $750 for 15k miles per year) accruing for each NH owner. That’s about $750 per year operational savings per PEV.

If all NH light duty vehicles were EVs:

There are about 700,000 vehicles in NH (2020 estimate), and one of 11 are purchased each year.

The EV’s operating savings would be (700k vehicles x $750), about $525M per year.
Purchase savings would be about ($1500 x 60k vehicles per year turnover) $90M per year.

Energy Benefits: If half of that electricity were local renewables with 30% local content and considering more regional content in the grid electricity, the local benefit from energy would be about $100M per year.

Health savings might be about $250M per year (estimate). Total savings benefit from EVs is $965M per year times 10 years is about $9.6B!

But the economic benefit from local retention of money (local money circulation) is about 2.1 times.

So, the economic impact of all NH cars being EVs would be about $2B per year or $20B over 10 years.

Looking Shorter Term:

If 20% of NH cars are EVs, the economic benefit would be about $400M per year or $4B over 10 years.

With 2% of NH cars are EVs, the economic benefit would be about $40M per year or $400M over 10 years. This last case is close to valid as averaged over the next five years, but averaging over the first ten years would likely be double this amount due to the rapid growth of EV sales.

Again, these are my numbers gained from years following EV metrics and may not be accurate with deeper study. However, they are likely to be proximate (maybe +/- 10%). Even with proximal accuracy, the big takeaway is that electric vehicles appear to be better for NH’s EV owners and economy than combustion vehicles. Please note that. Understanding this comparison is essential to discussions surrounding EV policies.

Randy Bryan is one of the co-founders of Drive Electric NH. Bryan has been an advocate for electric cars since 2006. His company, PlugOut Power (formerly ConVerdant Vehicles), has converted vehicles to plug-in hybrids and currently develops and sells inverters that turn electrified cars into emergency generators.

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