Support: Enel X Way’s Chris Baker explains how the EV industry is ‘crossing the chasm’

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The U.S. EV market is crossing the chasm, according to Chris Baker, head of Enel X Way North America, and that change could actually happen much faster than most people realize.

Enel X Way is an electric mobility company present in 17 countries. Baker compares the revolution in the electric vehicle industry to the change that took place in the cell phone market decades ago. In the early 1980s, a study by the consulting firm McKinsey concluded that the total world market for cell phones would be around 900,000. What this analysis failed to take into account, Baker said, is that once a technology is proven and its costs come down, it becomes broad mass-market appeal and fear factor. associated with it is disappearing – a dynamic that he says is playing out in the electric vehicle sector as well.

The electric vehicle industry is also set to see a boost with the passage of the Cut Inflation Act, signed into law in August, which contains a massive $369 billion in funding for efforts. on climate and clean energy.

“At the end of the day, the Cut Inflation Act is a huge deal – and it’s been a torturous and long process, but the end result will be nothing less than transformational,” Baker said. . Among other things, he predicts the legislation will help bring manufacturing jobs back to the United States and create a fairer shift to electric vehicles through his tax credits.

“I think it absolutely changes the way decisions are made in boardrooms – there will definitely be increased investment in home charging, both private and public,” he said.

Impacts of the Inflation Reduction Act

The Cut Inflation Act provides a $7,500 tax credit for electric vehicles, with requirements that certain amounts of critical battery materials must be domestically sourced and processed. These credits could make a big difference in the electric vehicle market, Baker said.

The law would allow this credit to be taken upfront at the point of sale, and “people make economic decisions based on the net out-of-pocket cost at the point of sale, [so] linking this tax credit to the point of sale is essential. »

At the same time, the EV industry faces some very real supply chain challenges, Baker acknowledged — not just for critical parts, but even for minor things like the rubber that goes into manufacturing. of the case for chargers, cables and other EV items. which are readily available in “a normal world”.

“The supply chain defects have been extended and had a huge impact – so you get these ripple and ripple effects, where you can have 98% of the raw materials…for a product and if you still expect that last 2%, you don’t have a working product,” he said.

Enel X Way has been able to leverage its global footprint to buy in bulk, and has a fairly advanced and mature supply chain and procurement organization, according to Baker.

“What’s exciting is that it really accelerates investment in capacity, that in two to three years – and potentially even sooner – you’ll only see massive available capacity that should be able to meet this increased demand that we’re seeing,” he said.

Opportunities and Challenges for the Power Grid

The expected growth of the electric vehicle sector and the influx of electric vehicles on the road will also have implications for the electricity sector, in terms of ensuring adequate distribution infrastructure as well as the ability to meet the demand for electricity from these vehicles. Analysis suggests that in a scenario where electric vehicles account for 100% of new light-duty vehicle sales in the United States by 2030 and 100% of medium- and heavy-duty vehicle sales by 2035, electricity demand would increase by about 2% per year between 2020 and 2050. This is partly due to the assumption that energy efficiency will increase as load increases, said Sara Baldwin, director of electrification at Energy Innovation.

The 2% growth in electricity demand is similar to the growth in load that the United States experienced between the mid-1970s and 2005, when the country began to install more electrical appliances and gadgets in homes and buildings., “so it’s not unprecedented,” Baldwin said.

The growing number of electric vehicles could also present opportunities for the grid.

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