Could Utility Companies Hold the EV Market to Ransom?

Could utility companies hold the EV market to ransom?
Could utility companies hold the EV market to ransom?

While there has been much focus on electric vehicle technology, battery technology and to a lesser extent, the environmental impact of gasoline vehicles, there has been little focus so far upon utility companies. When you bear in mind the number of gasoline/diesel powered vehicles around the world we can only begin to imagine the impact this will have on the production of electric across the globe if even half of these were replaced by electric powered vehicles.

So far the electric power companies have been relatively quiet on this subject although we have seen some mention of backup systems, future investment and recognition that more electric vehicles will put more pressure on the industry. However, will utility companies really hold the EV market to ransom?

Additional investment

It goes without saying that there will be a requirement for additional investment to create the electric which is needed to power and recharge electric vehicles. The increase in required capacity will vary across the world, although countries such as America could well be the first to suffer from this need for additional capacity. The fact that utility companies will need to invest more money for additional capacity may well be further influenced by the ongoing need to move to "green technology".

Quote from ElectricForum.com : "Bosch has released a new wireless charging system for EVs which is so far compatible with two vehicles - Nissan Leaf and the Chevy Volt - is this the way forward?"

At this point in time, and for many years to come, green technology will be relatively expensive compared to "dirty power" such as coal fuelled power stations. There is also no doubt that this additional cost will at some stage be passed onto the modern day electric vehicle driver as well as the wider general public.

Regulatory controls

While many utility markets around the world are deemed "free markets" the fact is that governments across the globe do have an influence on the costing and the prices which utility companies can charge their customers. It is in the best interest of all parties to ensure prices are "fair" and reflective of the situation at the time. It therefore seems unlikely that governments around the world would allow utility companies to hold the electric vehicle industry to ransom by increasing charges to excess.

That said there is also no doubt that governments around the world will be sympathetic towards additional costs and additional investment leading to something of a difficult situation. Do you increase electric prices and stall growth of the electric vehicle market or do you maintain prices at "false" levels and give the electric vehicle industry time to breathe? The truth is that the endgame will probably be somewhere in between these two scenarios.

Growth in electric vehicle sales

Earlier this week the U.S. authorities issued a graph which showed the relative sales of hybrids and pure electric vehicles in the first three years of their introduction. While there is little in the way of difference in the first few months, it is evident that electric vehicle sales have increased at a greater pace than their hybrid counterparts after one year, two years and three years. The truth is that we need to make plans for additional electric power capacity in the short, medium and longer term and this will take some time to resolve with many parties involved, all having a different agenda.