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An Action Plan to Integrate Plug-in Electric Vehicles with the U.S. Electrical Grid

2 Opportunities and Challenges of PEVs

The PEV Dialogue Group believes increasing the use of PEVs provides an opportunity to alleviate several major problems currently facing the United States. Yet, PEVs face many challenges to reaching the mass market, including the integration of these vehicles with the U.S. electrical grid. The Group developed the Action Plan to address challenges related to vehicle and grid integration that other efforts are not tackling sufficiently.

2.1 PEV Opportunities

PEVs present a transformative opportunity for the transportation sector. Since the 1930s, the gasoline-powered internal combustion engine (ICE) has dominated the U.S. vehicle market and much room exists for efficiency improvements with today's conventional vehicles. Because of new and forthcoming fuel economy standards, ICE vehicles will likely achieve many of these gains and remain a substantial part of the U.S. passenger vehicle market into the future. Vehicles powered by alternative fuels, on the other hand, have only achieved niche market status, and it is clear that conventional vehicles will continue to be tough competition. Although they face significant hurdles (see Section 2.2), PEVs can help address four critical issues facing the United States today. Importantly, other alternative vehicles along with improvements in conventional vehicles can also help address these same issues to different degrees.

  1. Energy Security

    Problem Description:U.S. energy security refers to the adequacy and resiliency of the energy system as it relates to energy production, delivery, and consumption. The U.S. transportation sector relies on a global oil market dominated by an oligopoly - the Organization of the Petroleum Exporting Countries (OPEC) - as well as national oil companies more generally. OPEC's ability to constrain supplies results in oil prices higher than a competitive market would produce. Monopoly power, combined with oil price shocks (see Appendix B), mean that the U.S. economy loses hundreds of billions of dollars per year in productivity. Researchers at the Oak Ridge National Laboratory estimate the combined total of these costs has reached more than $5 trillion ($2008) since 1970.[4]

    Moreover, most experts believe that rising demand in emerging market economies coupled with supply-side challenges can be expected to lead to future volatility in oil prices, which is highly damaging for U.S. consumers and businesses.

    PEVs' Effect on Energy Security: PEVs can run on electricity, which in the United States does not rely on oil but rather a diverse set of almost entirely domestic energy sources.[5]

    Even when PEVs use gasoline (i.e., in EREVs and PHEVs), they use it sparingly and can accommodate many vehicle trips on only electricity.While data is lacking on the distribution of the length of individual car trips, the average car trip length in the United States is 9.34 miles, within the range of most PEVs.[6]

  2. Local Air Quality

    Problem Description: Smog and other vehicle-related air pollutants continue to harm human health in urban areas throughout the United States. Motor vehicles are currently responsible for one-half of smog-forming air pollutants and about 75 percent of carbon monoxide emissions, though tougher standards are continuing to improve the effects of conventional vehicles on air quality.[7]

    PEVs'Effect on Local Air Quality: Already, efforts by the U.S. Environmental Protection Agency (EPA) and others in implementing the Clean Air Act, including vehicle emission standards, have mitigated health problems and saved millions of lives since 1970.[8]

    PEVs would further improve air quality, as they have no tailpipe emissions when operating in battery-electric mode. However, PEVs can be responsible for upstream emissions, depending how the electricity they use is generated.

  3. Global Climate Change

    Problem Description: Both the U.S. Department of Defense and the National Research Council (NRC) identify global climate change as a serious threat. The NRC indicates "there is a strong, credible body of evidence, based on multiple lines of research, documenting that climate is changing and that these changes are in large part caused by human activities."[9]

    Under business as usual, weather pattern changes including drought and heavy rainfall, rising sea levels, and sea ice loss from climate change could seriously diminish economic growth. Climate change also threatens ecosystems and public health.[10] With respect to national security, climate change is one of the key factors that may "spark or exacerbate future conflicts."[11]

    PEVs'Effect on Global Climate Change: Depending on the source of electricity, PEV operation can be responsible for much lower greenhouse gas emissions than nearly all conventional vehicles available today, even after accounting for emissions from electricity generation.[12]

  4. Economic Growth

    Problem Description: America's reliance on imported oil leads to a U.S. trade deficit of hundreds of billions of dollars. Electricity for PEVs provides a suitable alternative that is typically less costly per vehicle mile traveled. Furthermore, as the world diversifies away from fossil fuels, the economic opportunity to lead in the clean energy industry is considerable.

    PEVs'Effect on Economic Growth: The United States can lead the world in PEV technology including advanced vehicle batteries and the overall advanced vehicle market, which could stimulate economic growth.Market growth for alternative and fuel-efficient vehicles can help revitalize U.S. manufacturing and herald a new era of American leadership in the automobile industry. While the U.S. economy has struggled to recover fully from the global financial crisis of 2008, clean energy has been one driver of the recovery. The design and manufacture of new vehicles, including PEVs, has already created thousands of jobs in the United States.

    The inherent characteristics of PEVs help address all four of these issues. When powered by batteries, PEVs directly emit no greenhouse gas emissions or other harmful air pollutants through the tailpipe, and if the electricity used to charge the batteries is low-emitting, PEVs' upstream emissions are low as well. In battery mode, PEVs also consume no oil. In 2009, about two-thirds of all passenger vehicles purchased in the United States were manufactured in North America,[13] and most PEVs sold in the near term are expected to be manufactured in the United States.[14]

2.2 PEV Challenges and Action Plan Objectives

PEV deployment faces many challenges, the largest of which is arguably the vehicles' high upfront cost compared to conventional vehicles. There are many existing policies designed to support PEVs including a $7,500 federal tax credit, which is a critical policy for PEVs to reach beyond early adopters. Several organizations are providing information to the private sector, government, and the public on how to address these challenges. Below are some notable examples:

These and other ongoing projects are accelerating PEV deployment, but knowledge gaps in various crucial focus areas remain. The rollout of PEVs is still in the early stages and this is a key learning period for all stakeholders involved. Judgments before sufficient data is available could lead to unintended consequences. Actions are possible now, however, that will help lay the foundation for stakeholders to develop and adopt best practices. To avoid duplication, the PEV Dialogue Group identified challenges to accelerating PEV adoption nationwide that other efforts are not addressing adequately. The Group laid out the following objectives for the Action Plan:

The objectives identified above are the focus areas of the Action Plan. Actions within the plan can address single or multiple challenges related to these objectives, and require action by one or more stakeholders. In addition, the plan lays out next steps since some actionsrequire future work to complete due to time constraints or lack of available information.

2.3 How the Action Plan Addresses PEV Challenges

The Group developed the Action Plan to accomplish the objectives laid out above using a consensus-driven process that was technology neutral (i.e., between BEVs, EREVs, and PHEVs). Each stakeholder will need to take action over a sustained period to successfully implement the plan and accelerate the adoption of PEVs nationwide. The Group organized the objectives identified into four solution categories as it devised the Action Plan: regulatory environment, public and private investments, PEV rollout, and consumer education. The table below summarizes the challenges identified by the Group along with actions intended to overcome or diminish those challenges.

Table 1: Objectives and Action Plan Summary.







Regulatory Environment

Harmonize regulatory action

Electric Utilities, Other Businesses,



Create a consistent regulatory framework nationwide that protects the reliability of the grid, minimizes cost to the electricity distribution system, encourages transportation electrification, andprovide consistent treatment between PEVs and loads with comparable power requirements within each rate class. Assess a broad set of existing models to use and pay for infrastructure, share knowledge, and identify best practices.

Determine if existing rules and regulations for use of and payment for infrastructure need revision

Electric Utilities, Other Businesses,



Public and Private Investments

Accelerate sustainable private sector investment in charging infrastructure



Assess PEV suitability; estimate charging equipment &infrastructure needs; estimate the extent of public investment in EVSE needed

Balance efficiency and equity


Electric Utilities,


PEV Roll-out

Define vehicle and fuel purchase process

Electric Utilities, Other Businesses,



Work with all relevant public and private players to facilitate the introduction of PEVs in a geographic area

Consumer Education

Explain value proposition

Electric Utilities, Other Businesses,


Provide consumer web tools that educate consumers on the value proposition of PEVs including the total cost of ownership (TCO) compared to other vehicles

Bridge technology information gap

Electric Utilities, Other Businesses, Government

Increase PEV publicity and customer knowledge of PEV technology through online tools, increased publicity, and enhanced stakeholder collaboration

Updated: 10/29/2014
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