The Challenges Electric Vehicle Fleets present for Illinois’ Economy

Vehicles powered by batteries that are charged by electricity are becoming more and more popular, and many states are passing laws centered around certain percentages of vehicle sales that must include zero emissions. In California, where nearly 40 percent of the current electric vehicle fleet exists today, government mandates call for all new cars sold in 2035 and beyond must be zero emission vehicles. The pros and cons to this movement to EVs are many, and there’s no denying that electric vehicles will play a significant role in Illinois’ economy now and into the future.

Democrats in Illinois have been determined to push this industry forward, citing clean energy goals and the savings involved with having to no longer purchase gasoline and overall lower maintenance costs. The Reimagining Electric Vehicles Act was signed into law in late 2021, enticing and incentivizing existing businesses to ramp up electric vehicle production while also recruiting new manufacturers to come to the state Reimagining Energy and Vehicles (REV) Program. While all of this seems well and good, the reality is that electric vehicles are very expensive to buy and charging stations are scarce at present.

Recent comments by Gov. JB Pritzker indicate Illinois is headed in the same direction as California eventually. “I think any plant that is producing internal combustion engine vehicles right now, we should be worried about,” Gov. Pritzker said. “Because the truth is that they’re all going to be converted to electric vehicle plants or close, right?”

Another new law recently passed by Illinois Democrats requires that newly-built homes support electric vehicle charging stations in their garages and parking spaces, though installing the actual charging station is not mandated. This requires 200 amp service, which most homes do not have, creating additional costs and concerns. With the lack of charging stations and a limit on how long a vehicle can operate before it needs charging, there are obvious hurdles to overcome. The charging process can also take a long time and is not free. Charging at home can take all night with a higher capacity charger, or even longer with less powerful chargers. Home charging still creates an electrical demand that is reflected on the owner’s electric bill, although cheaper than the cost per mile of a gasoline engine. High-speed chargers found at commercial locations cost more than home charging but do offer much faster charges. For example, a Tesla Model 3 can be recharged at a Tesla Supercharger for $17-$46 depending on various factors. The eventual cost of a battery replacement is another factor in EV affordability. Batteries are claimed to last 10-20 years and are usually warrantied for eight years. After the warranty period, however, the battery becomes a five figure looming expense for the owner.

Vehicle availability is also an issue, in addition to the fact that electric vehicles are very expensive. Consumers can expect to pay more money for a vehicle if they go electric, and certain types of larger vehicles are even harder to find. There is also the issue of obtaining certain elements, such as cobalt and lithium, that are required for EV battery production. The world does have enough lithium to power the electric vehicle revolution, but there are questions about accessibility. Only one quarter of the approximately 88 tons of lithium on Earth is economically viable to mine as reserves. The average lithium mine takes a few years to get up and running, and safely extracting the necessary amount of lithium remains the biggest challenge going forward.

Research shows that a typical gasoline-powered small car that costs $22,000 jumps to over $35,000 for the same model that is battery-powered. The challenge is then factoring in the likely lower maintenance costs and gasoline cost savings over time verses the initial costs of the vehicle, charging, and potential battery replacements for longer-term owners. Other factors to consider include tax credits for purchasing electric vehicles, battery station and charging costs, vehicle depreciation and how long one plans to own the vehicle.

Electric vehicles are also placing an even larger demand on already-loaded electric grids and that also must be factored in when government enacts legislation. At the present time, the vast majority of car and truck owners in Illinois have gasoline-powered vehicles. Illinois has the eighth-highest number of electric vehicle registrations, with the figure of 26,000 in 2020 increasing to 36,520 in 2021. That represents 2.6 percent of all registered electric vehicles in the nation. There is no doubt those numbers will continue to rise, but by how much and how quickly? How much does the state and country need to increase our electric generation to compensate? What effect will this have on the cost of electricity?

Other issues to consider for those purchasing an electric vehicle involve cold weather, which is obviously a common thing to deal with in Illinois. Studies show that most electric vehicles experience some loss of driving range in cold weather and take longer to charge, and driving range loss could be as much as 40 percent with the heater going on full blast. Also, when temperatures are 40 degrees or below, vehicle batteries will no longer deliver peak performance. Drivers are recommended to start their vehicles when it’s plugged in to allow the battery to warm up in cold weather. If you live in a colder climate, there are additional challenges facing electric car owners. EV batteries are temperature sensitive. Vehicles need to be warmed up and power is also being used to heat the cabin. Distance range can take a 15-20 percent hit in colder weather.

Are electric vehicles here to completely overhaul the vehicle industry, or are they merely a supplement and alternative to the established gasoline-powered fleet? Totally eliminating or greatly reducing the number of gasoline-powered vehicles may seem to be an unlikely path for some, but it’s clear the industry is undergoing major changes, especially in Illinois.