As Washington turns its attention to federal tax reform, policymakers agree that the tax code should promote innovation, make our country stronger, and protect both consumer and business interests. Advancing electric transportation is an opportunity to achieve all these goals while providing the mobility solutions and 21st-century infrastructure the United States so critically needs. In rewriting tax policy for the first time in more than a generation, Congress needs to look to the road ahead, not in the rearview mirror.
Building the transportation system of the future requires vision and strategic investment in the technologies that will carry us forward. The United States can speed the growth of these technologies, expand the job-creating supply chains of electric transportation and ensure our global leadership in this market by continuing to reinforce business and consumer investment in electric vehicles (EVs) and infrastructure.
The need to diversify our transportation fuels is critical. Our transport system currently relies on oil to power 92 percent of its network, but widespread adoption of EVs—which include battery, hybrid and fuel cell vehicles—could substantially broaden our nation’s fuel mix. Even with reduced imports, oil dependence comes at great cost to our energy and economic security, as the U.S. spent roughly $123 billion dollars on imported oil in 2016 alone, and has sent $1.6 trillion to OPEC member states in the past 10 years.
In contrast, electricity is produced domestically from diverse feedstocks, reducing our strategic vulnerability while providing cost-saving alternatives for consumers and businesses.
By using electricity as a transportation fuel, American families and businesses can benefit from significant savings and be insulated from volatile petroleum fuel prices that rise and fall with the world oil market. Even when the price at the pump is relatively low, electricity costs are lower—and more stable. On average, driving on electricity costs the equivalent of just over a dollar per gallon of gasoline.
Continued U.S. leadership in electric transportation technology and markets will also expand our global competitiveness and create domestic jobs. According to the Department of Energy, electric drive vehicle and component manufacturing currently employs over 215,000 people. Jobs are growing as the market matures and over 650,000 plug-in vehicles have been sold since 2010.
Manufacturers have announced plans for more than 120 EV models, from economy to luxury class, available for purchase by 2020. Bloomberg New Energy Finance recently projected that by 2040, 54 percent of new car sales and 33 percent of the global car fleet could be electric. Public and private charging and fueling infrastructure are expanding—and will need to expand faster to meet projected demand in workplaces, cities and along the nation’s highways.
The electric drive industry is also contributing to the advances in connected and autonomous transportation that will reshape mobility and the smart cities of the future. According to Navigant Research, the global market for advanced connectivity technology for mobility is projected to grow to $17.5 billion in revenue by 2026.
Regardless of the enormous benefits to consumers and the country, these beneficial and disruptive changes are not guaranteed. As organizations that represent the diverse industry, security, consumer and stakeholder groups who are working to advance transportation electrification, we understand what is at stake in tax reform. We are at a mobility inflection point.
This intersection of once-in-a-generation policymaking and EV technology presents the opportunity to drive innovation in transportation, which will strengthen our economy, enhance our national security and competitiveness, and give consumers the power to pay less to drive.
We urge Congress and the Administration to take that opportunity.
Genevieve Cullen, President, Electric Drive Transportation Association
Joel Levin, Executive Director, Plug-In America
Ben Prochazka, Vice President, Electrification Coalition