• In 2022, Gov. Roy Cooper “ordered” North Carolina to “strive” for 1.25 million registered zero-emissions vehicles (ZEVs) and for 50 percent of vehicle sales to be ZEVs by 2030
  • Because ZEVs are significantly more expensive than regular vehicles, a new report estimates the added cost to North Carolina consumers of purchasing 1.25 million ZEVs would be about $17.8 billion
  • Also, installing enough in-home chargers could cost up to $4.1 billion, and providing enough roadside charging ports would cost an estimated $883 million

On Jan. 7, 2022, Gov. Roy Cooper issued Executive Order (EO) 246 that called for, among other things, 1.25 million zero-emissions vehicles (ZEVs) to be registered in North Carolina and 50 percent of new car sales to be ZEVs by 2030. Since the EO exceeded actual gubernatorial authority, it called for the state to “strive to accomplish” those goals. As such, the order is not legally enforceable, but a dozen states — led by California — have adopted rules requiring ZEV quotas, several of which bypassed legislative action. 

The EO presumed that the ZEVs purchased would replace traditional, internal combustion engine (ICE) vehicles powered by gasoline or diesel. It also presumed that doing so would help North Carolina “avoid the worst impacts of climate change.” ZEVs include electric vehicles (EVs), plug-in hybrid electric vehicles, alternative fuel vehicles, and others.

A new report about North Carolina’s current energy infrastructure and future needs from the John Locke Foundation’s Center for Food, Power, and Life estimates the cost of reaching the governor’s ZEV goals. Written by Trevor Lewis, Isaac Orr, and Mitch Rolling of Always On Energy Research, the “Lighting the Path” report estimates that the total cost of getting North Carolina’s financial infrastructure, roads and highways, households, and electrical infrastructure ready for so many ZEVs would fall between $16.5 billion and $30.5 billion. The report also estimates that drivers here would have to spend an extra $19.0 billion to $20.5 billion more in just the next seven years to purchase more expensive ZEVs instead of conventional, gasoline-powered cars and diesel trucks.

The report points out several issues with Cooper’s would-be mandate.

1. ZEVs Are Much More Expensive Than Regular Vehicles

It is well known that ZEVs are far more expensive than comparable ICE vehicles (note: since the phrase “ICE vehicles” is thankfully not common parlance, this brief will refer to them as regular vehicles). That fact is so well-known that it has a name: the “green premium.” The report notes that, in North Carolina, the average manufacturer’s suggested retail price (MSRP) of a ZEV is $56,475 — 67 percent more expensive than the average cost of regular vehicles ($33,797). As the report explains, “This immense financial cost essentially restricts EVs to North Carolina’s wealthiest households.”

The federal Inflation Reduction Act’s approach to the ZEV green premium is to extend a $7,500 tax credit for purchasing some ZEVs. Obviously that credit claws back only some of the green premium, but it has an even more glaring flaw: Most of the low-cost ZEVs are ineligible for the credit because it is only for those vehicles with batteries made and with final assembly in the United States.

As the report notes, “Disqualifying vehicles at the low end of the EV pricing spectrum from the credit forces buyers to take on higher car payments or return to ICE vehicles.”

As it is, the credit reduces the green premium for ZEVs only slightly — from 67 percent to 45 percent higher, which is still prohibitively expensive for most people. Even for the lowest-cost ZEVs available (those with MSRPs under $40,000), the green premiums range from 30 to 63 percent.

Based on the average costs of regular vehicles vs. ZEVs (including the tax credits), the report finds that the additional cost to North Carolina consumers of reaching 1.25 million ZEVs would be about $17.8 billion.

2. Many Homes Aren’t Prepared for Charging ZEVs

There are other costs to ZEV ownership beyond the sticker price. Older homes in North Carolina weren’t built with the level of home circuitry required for charging a vehicle at home. The report looks at homes built before 1980 — more than 1.6 million homes in North Carolina — as a starting point for estimating home charging needs. How many of those 1.6 million homes need upgraded circuitry (i.e., a shift from 100-amp to 200-amp circuit boxes)? The report estimates a range of costs, depending upon the answer to that question. At the low end, if only 25 percent of pre-1980 homes need upgrades, the cost to homeowners would be $530 million; if all of them do, the cost would be $4.9 billion.

Installing a Level 2 charger would be an additional cost per home, ranging from $1,500 to $3,000. With that cost included, the report estimates the in-home charger cost to accommodate 1.25 million new ZEVs by 2030 to be from $1.7 billion to $4.1 billion.

3. There Aren’t That Many Charging Stations Out There

Along North Carolina’s 81,000 miles of interstates, state highways, U.S. routes, and secondary roads are only “4,204 publicly available EV chargers, 3,188 of which are Level 2 charging stations and 970 are DC Fast charging stations.” The length of time spent recharging ZEV batteries is excessive — three to six times the length of a standard refueling stop, growing exponentially longer if vehicles are waiting to use the chargers.

Regular vehicles are far and away the drivers’ choice in North Carolina, and as such, the private sector needs only the expectation of turning a profit to incentivize building retail gasoline stations. On the other hand, building EV charging infrastructure needs lots of government intervention, at least according to the president, the governor, and other government officials:

The “Bipartisan Infrastructure Law” (BIL) of 2022 created the National Electric Vehicle Infrastructure (NEVI) Formula Program and allocated over $4 billion to it for funding EV charging infrastructure through 2026, which will almost certainly be extended past 2026.

The misnamed “Inflation Reduction Act” (IRA) of 2022 bestowed highly generous government tax incentives on EV charging stations and made them retroactive and transferable. …

Gov. Roy Cooper … would have government [fund] a “robust charging network,” using not only state money and NEVI grants, but also grants “by other federal programs under the BIL and IRA.”

The report estimates that an additional 17,660 charging ports are needed along North Carolina’s highways and secondary roads, with a total cost of $883 billion.

4. It Would Have No Effect on the Climate Whatsoever

Despite costs “running in the tens of billions of dollars,” all this effort would increase the proportion of ZEVs here only slightly, from 12 percent of the state’s vehicular fleet to 14 percent. The report noted the folly of thinking there would be “any climate benefits” or even “emissions-reductions benefits” from that — especially given that “in the next few years alone China plans to add 42 times the amount of new coal-fired generation than North Carolina can possibly retire.”

Future research briefs will examine other findings in the “Lighting the Path” report.