Gaining the Industry’s Attention
It has been four years since a surge in electric vehicle (EV) sales growth began to gather the focused attention of the electric utility industry. As illustrated in the chart below, from 2020 to 2024, quarterly EV sales grew at a compound rate of 49% per year and ended last year at more than 399,650 units per quarter.
While sales have recently leveled off, millions of consumers are now driving newly acquired EVs and are seeking convenient charging and other services. By some estimates, there are now 4.5 million EVs on U.S. roads, and drivers continue to add a million and one-half EVs to the vehicle fleet each year.
Recognizing both the opportunity and the challenge that millions of EVs pose, utility industry leaders and regulators responded by establishing EV departments and funding numerous programs designed to serve this growing market.
To support the growth of the electric transportation market, many utilities are now:
- Building EV charging infrastructure, including fast-charging stations
- Sponsoring managed charging programs to limit grid impacts
- Providing fleet electrification services
- Sponsoring programs to educate consumers on EVs
- Designing programs to help ensure equitable access
- Offering rate plans specifically designed for EV charging
- Providing rebates and incentives to assist with chargers and other costs
In 2024, ScottMadden conducted a review of these programs and published Leading Electric Vehicle Practices in the Utility Industry. In this analysis, we identified and highlighted more than 20 programs that are leading the utility industry in terms of creativity of design, impact on customer interest and EV adoption, and overall level of commitment to electric transportation.
Much Has Changed in the EV Space
In addition to large-scale growth in EV sales and utility industry leadership, much else has changed in the EV market in recent years. A growth trend that was almost entirely jump-started by Tesla has been joined by more than 100 new EV models from virtually every car maker as well as new entrants like Lucid and Rivian. Consumers now have many more choices but are also likely to be puzzled by the range of options and how to optimize EV ownership.
To build these new models, tens of billions of dollars are being invested in battery and EV manufacturing. This activity is creating an economic boom in certain regions. It is also forming the basis for regional EV strategies that may combine the utility with state and local agencies in public-private partnerships.
Meanwhile, much learning and experience has been gained by utilities about the effectiveness of the EV programs being offered. Customer participation and feedback has provided substantial guidance about the value of individual programs. Vendors have introduced new technologies and services. And regulators in many states have had time to consider and rule on the treatment of associated costs.
Finally, a new administration is now in charge and is skeptical of deploying large amounts of taxpayer dollars to support EV adoption. Exactly how much policy shift is going to occur will have to play out, but the overall direction of future federal support is already clear.
With the many changes that have taken place, we believe now is the time for utility leaders to refine their strategies for the electric transportation market.
It’s Time to Rethink the Strategy
ScottMadden’s EV program methodology is a step-driven process utilized to help utilities develop and refine EV program strategies. The methodology is designed to ensure utility EV programs are driven by the needs of customers and aligned to the unique characteristics of the service territory and regional electric grid.
1. Assess Current EV Activities and Programs
Current EV activities and programs should be profiled and assessed for desired impact relative to cost. In many cases, these programs have been in place for several years, ample time for consumers to confirm their interest through participation and for results to begin reaching a steady state. Objectively reviewing the status of these programs is a critical part of a current state assessment.
It is also important to evaluate the overall environment for EVs. Considerations include regulatory and state policy support, strength of the regional EV community, and barriers to greater EV adoption.
2. Develop and Refine Utility EV Objectives
With large-scale growth of EVs on the road and the many other changes that have occurred in recent years, now is a good time to reconsider the utility’s strategic objectives for an EV program. Objectives may include becoming a recognized leader in transportation electrification, responding to customer demands to make EV ownership more affordable and convenient, or managing the impact of charging on the grid. In all cases, these objectives should align to and support the utility’s overall corporate objectives while balancing regulatory imperatives and customer affordability.
In addition and to maximize impact, objectives should be designed to leverage the strengths and opportunities identified in the current state evaluation.
3. Assess EV Program Opportunities
Once specific objectives have been refined and are supported by executive leadership, it is time to evaluate the individual programs being offered. Utility leaders should ask the following questions:
- Do these EV programs—as designed and implemented—support the utility’s corporate objectives?
- Are the programs making the desired impacts or are they likely to in an acceptable timeframe?
- Do they take advantage of key opportunities or meaningfully address barriers to greater EV adoption?
- Do they support customers’ needs and balance affordability?
These are all questions that should be carefully considered when committing to investments in the electric transportation market.
This assessment will result in specific actions for refinement of existing programs, perhaps scaling up or instead reducing investment. It may also identify gaps in the set of current programs and the need to consider one or more new offerings.
4. Develop Implementation Plans to Achieve Objectives
Once the specific EV opportunities have been identified, there is still much work to do in designing programs that meet utility or regulator objectives. Considerations include specific consumer desires, key advantages and opportunities, and budget and operating constraints. Detailed implementation plans should be developed, including activities, timelines, and responsibilities.
Beyond EV program identification and design, thought should be given to the structure and size of the utility organization that will implement and execute these programs. Typically, a combination of designated resources and capabilities that can be called upon as needed from either the broader utility or vendors creates the optimal structure.
5. Measure and Report Success
Finally, EV program metrics should be identified and tracked to confirm desired outcomes and level of impact. These typically measure progress in the areas of regional EV adoption and growth, EV program participation, and positive environmental impacts, among others.
Ultimately, metrics should demonstrate achievement of the EV program’s objectives. They should provide guidance for timely intervention and improvements if these objectives are not being attained.
How ScottMadden Can Help
ScottMadden works with our utility clients to develop EV strategies and design and implement EV programs. If it is time for your company to rethink its strategy for the electric transportation market, connect with us at Connect with ScottMadden.
ScottMadden knows energy from the ground up. Since 1983, we have served as consultants for hundreds of utilities, large and small, including all of the top 20. We focus on Transmission & Distribution, Grid Edge, Generation, Gas, Rates & Regulation, and Corporate Services.
Our broad, deep utility expertise is not theoretical—it is experience-based. We have helped our clients develop strategies, improve critical operations, reorganize departments and entire companies, and implement myriad initiatives.
