Mcconnel Pa 2050

[Mariela Coxon]

Ourinvestment strategy aims to use all our assets to help create positive impact in alignment with our mission and vision. On this page, you can find an overview of our investment activities to date.

We believe that we have the responsibility to use all our assets, whether through charitable funding or investments, to amplify the efforts of organizations working to create lasting social and environmental change. Our investment strategy aims to commit 100% of our endowment towards investing for impact, while generating returns that fund our activities for the long-term.

We hope to help build a thriving impact investing market in Canada and accelerate the shift to an impact-first economy where all investments contribute to meaningful positive impact for people and planet.

In tandem with our investment strategy, we will achieve net-zero carbon emissions in our portfolio by 2050 at the latest. This is a necessary step in ensuring that our investments and our charitable activity are working in harmony.

By emitting no tailpipe emissions, electric vehicles (EVs) have the potential to completely decarbonize the US transportation sector. But the US transportation sector currently remains far from zero emissions, as the composition of the current on road vehicle fleet is mostly gasoline vehicles. EVs represent a growing yet small share of all vehicles on the road today.

This report details the current role that EVs play in reducing greenhouse gas emissions (GHG) in the US transportation sector. It also looks forward to 2025 and beyond to assess the potential for EVs to reduce future GHG emissions. We summarize our most important findings here.

First, EVs represent about one percent of all passenger vehicles on the road today, and though some truck EVs are in development, they have not yet entered the market in significant numbers. Thus, to date, EVs have had little impact on overall GHG emissions in the US. However, EV sales have grown rapidly in recent years, and there is the potential for continued exponential growth in the future.

Second, even with accelerating growth in the next few years as more EV models enter the market, they will continue to have only a modest effect on transportation sector GHG emissions. This is because the passenger vehicle fleet takes several decades to turnover, and truck fleets take even longer. Therefore, most gasoline vehicles on the road today will still be on the road in 2025, which limits the increase in the share of the fleet that will be electric by that time. Even optimistic forecasts of new EV sales will have only a limited impact on overall GHG emissions. Even if 15% of new vehicle sales are EVs in 2025, 85% of sales will still be gasoline vehicles and those will remain on the road for many years.

Third, in the longer term, as many EVs reach cost parity with gasoline vehicles some time after 2025, we expect sales volumes to increase significantly especially for passenger vehicles. However, for most larger vehicles, such as large passenger trucks and heavy-duty trucks, continuing technological progress will be essential for lowering costs to achieve competitiveness with vehicles powered by gasoline and diesel. By then trucks will contribute a larger share of GHG emissions than passenger vehicles, making them a major focus of efforts to decarbonize the transportation sector.

We present a range of forecasts about how quickly light-duty (car and light truck) EVs will enter the market in the longer term. To attain even the mid probability forecasts, government policies to promote EV demand and supply will be essential at least until full parity between EVs and gasoline vehicles is reached. Even then fleet GHG emissions do not go zero because of heterogeneity among vehicle sizes and EV buyers, and the slow turnover of the fleet.

We find that a barrier to high levels of EV penetration of the fleet in the medium to longer term is uncertainty over the cost of high-speed widely available charging capability. Fast charging availability outside the home appears critical for widespread adoption of EVs. Yet, there remain uncertainties about how to bring costs down enough for widespread commercial fast-charging in the long-run.

Finally, we review government policies that will play a critical role in accelerating the transition of the fleet, with the associated gradual reduction in GHG emissions. We discuss existing policies including state sales mandates, which target increasing the supply of EVs, and subsidies and rebates, which increase demand. We highlight the role of continual improvements in fuel economy for gasoline and diesel vehicles throughout the transition to EVs. And, we identify additional policies and ways to improve current policies to spur demand, hasten fleet turnover, and ensure sufficient charging capability.

In the discussions below, we refer to all electrified vehicles as EVs, and these include full plug-in battery electric vehicles and fuel cell vehicles powered by hydrogen. Both of these vehicle technologies have zero tailpipe emissions, but full lifecycle emissions that include producing the fuel and the vehicle are not zero. Our focus in this paper is on EV fleet penetration and tailpipe GHG, so we touch only briefly on fuel and battery emissions.

In this section, we summarize the role that EVs are currently playing in reducing carbon emissions from the transportation sector in the United States. We first show the shares of different sources of greenhouse gas emissions in the transportation sector. We then look at the current state of electrification of passenger vehicles, and heavy-duty trucks, which are the two major sources of emissions from transportation.

As of 2018, the transportation sector accounted for 28 percent of total greenhouse gas emissions in the United States. Figure 1 shows that of the total transportation share, most are from vehicles - about 59 percent from passenger vehicles, and 23 percent from heavy-duty vehicles.

Carbon emissions from the transportation sector have grown by about 24 percent over the last 30 years. Transportation emissions grew between 1990 and 2007, then fell due to slowed economic activity caused by the Great Recession. Between 2012 and 2018, transportation sector emissions have grown every year. See Figure 2 below. Transportation now contributes the largest share of GHG emissions of any sector. Electricity generation is the now the second largest with 27% of GHG emissions. USEPA Greenhouse Gas Inventory, 2018.

Given the current state of the COVID pandemic, the future trajectory of transportation emissions remains uncertain. Prior to the pandemic, transportation sector emissions were expected to continue growing, primarily due to expected increases in vehicle travel. Even as the economy recovers from the current downturn, it is uncertain whether households and businesses will revert to past behavior. Anticipated innovation such as automated driving creates additional uncertainty about future transportation demand.

For passenger vehicles, we differentiate between two types of EVs: plug-in hybrids and battery EVs. Plug-in hybrids have the capability of running on either electricity or gasoline, and generally have a relatively small electricity-only driving range. Battery EVs only have the capability of running on electricity, but have a much longer electricity driving range than plug-in hybrids.

The figure shows an increase in annual new vehicle sales from several thousand in 2011 to about 350,000 in 2018 and 2019. Even with this massive growth, EVs represent a tiny fraction of the passenger vehicle fleet in operation. Annual new vehicle sales are typically on the order of 15 million vehicles per year, which implies that EVs have had an annual new vehicle market share of around 2% per year in recent years. Furthermore, vehicles remain on the road for many years after they are sold; the current passenger fleet stands at about 250 million vehicles (including those owned by rental car companies, businesses, and governments), or about two vehicles per US household.

As of 2019, approximately 1.6 million plug-in hybrid vehicles and battery EVs were on US roads, representing just 0.7 percent of the on road fleet owned by households. Table 1 further breaks down the fleet by various fuel types.

Battery powered electric vehicle fueling requires charging infrastructure which includes chargers, connections to the electricity grid, software and communications networks. Charging infrastructure is diverse in terms of cost and speed of recharging, reflecting both technology options and consumer preferences. There are currently over 1.2 million charging ports in the United States, ranging from residential plug-ins, to high-speed chargers in public areas. The forecasts are that millions more home chargers and fast charging stations will be needed in the future.

Most of the investment in infrastructure to date has been in urban areas where demand for and prevalence of EVs is the highest. M. Nicholas, D. Hall and N. Lutsey. Quantifying the Electric Vehicle Infrastructure Gap across US Markets. (2019). ICCT. Washington, DC. _charging_Gap_20190124.pdf. Public high speed charging is essential for increasing the demand for EVs, but it is expensive especially when utilization levels are low. National Plug-in Electric Vehicle Infrastructure Analysis. US Department of Energy. (2017); also see Lee H. Lee and A. Clark. Charging the Future: Challenges and Opportunities for Electric Vehicle Adoption. (2018). Harvard Kennedy School. -026_lee_1.pdf Currently, some high-speed charging stations are dedicated to Tesla vehicle refueling and are incompatible with other EV models. It will be important to set consistent standards for vehicle charge point communication and payment as the infrastructure is built out in the future. Currently, the lack of sufficient high-speed public charging infrastructure is seen as a barrier to stronger EV adoption.

In 2011, EVs were prohibitively expensive for most new vehicle buyers. Since then, both government policies and technological improvements have contributed to bringing down costs, A relevant metric for comparing EVs to internal combustion engine (ICE) vehicles powered by gasoline is cost per mile of range, since EVs tend to have lower driving range than ICE vehicles. Figure 4 shows average driving range of battery EVs sold in the US along with price per mile of range, which is defined as the manufacturer suggested retail price divided by driving range.

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