EV Challenges and Evolving Solutions for Rural Communities
While the electric vehicle (EV) market has accelerated substantially and EV infrastructure continues to grow, several key challenges remain.
This section outlines several key challenges, with a particular focus on concerns for rural areas. It also discusses emerging solutions for addressing these challenges and references sections of the toolkit where these solutions are described in more detail.
Up-Front Vehicle and Charging Infrastructure Costs
While the cost of EVs continues to decrease, the initial expense of EV charging infrastructure and the higher cost of most EVs available today still pose a barrier to EV purchases. In 2020, the average cost of a new light-duty vehicle overall was just over $31,000, while comparable EVs available cost over $40,000 before applicable tax credits. Medium- and heavy-duty EVs are also comparatively more expensive to purchase than their diesel counterparts.
As noted in Individual Benefits of Rural Vehicle Electrification, EVs have a lower total cost of ownership than conventional vehicles due to lower fuel and maintenance costs, and therefore have the potential to yield significant savings for rural households.
However, the up-front purchase price can be a barrier for many, particularly for low-income individuals. In addition, many people aren’t accustomed to considering total cost of ownership when purchasing a vehicle, so they may perceive the cost of owning an EV over time to be higher than it really is.
The cost of purchasing or leasing an EV is expected to continue to fall due to increased EV production volumes, innovations in battery storage, declining battery pack costs, wider availability of mid-priced EV models, and increased competition among automakers producing non-luxury EVs.
For example, DOE is investing in reducing battery costs through public-private partnerships that aim to reduce battery costs from more than $120/kWh today to $60/kWh by 2030; this would bring EVs to near cost parity with internal combustion engine vehicles.
Investments in charging infrastructure can also be analyzed on a total-cost-of-ownership basis, based on operational needs and the constraints and cost structure of available (or feasible) utility service. Up-front costs in rural areas can be higher, especially for DCFC stations, since installations in rural areas are more likely to require expensive electrical service upgrades.
Accurately assessing the total cost of ownership of such investments will lead to better long-term decisions and may make investments in charging infrastructure more appealing (see Lower Vehicle Fuel and Maintenance Costs for a discussion of total cost of ownership).
A higher volume of EVs on the road will increase the demand for public charging stations and improve the return on investments in these chargers. In addition, innovations in EV charging technologies and designs are expected to further reduce DCFC station costs. At the same time, Federal and State grants, loans, and other incentives continue to play a substantial role in driving down costs and spurring the EV market.
For details on funding options, see the EV Infrastructure Funding and Financing for Rural Areas section of this toolkit.
Limited Infrastructure Availability and Geographic Distribution
While home-, business-, and fleet-based charging are expected to remain the primary ways EV drivers charge their vehicles, the need for expanded public fast charging continues to rise with the growth of EVs—especially for rural drivers, who typically drive longer distances than urban drivers and for whom existing DCFC stations are spaced much farther apart.
Consumers are also concerned about the length of time it takes to charge an EV, the user-friendliness of chargers, the need to plan charging stops on long trips, and the relative convenience and safety of charging locations. Reduced battery performance and EV range during winter months are a further concern for rural communities in cold climates.
Placing public DCFC and Level 2 charging along rural travel corridors and at key destinations in rural areas can help to address these concerns and provide drivers with the confidence that they will be able to charge their vehicles when and where they need to.
Utility Upgrades and Electricity Rates
To meet the demands of larger or faster charging installations—such as DCFC stations, medium- and heavy-duty EV charging sites, and commercial EV fleet charging depots—it may be necessary to upgrade the electrical-service wiring running to a facility, or even upgrade certain components of the local power distribution infrastructure.
Such upgrades are more likely to be needed in rural areas, where the grid infrastructure may be less robust to begin with.
Local distribution network upgrades, such as the addition of three-phase power service and the installation of transformers at DCFC sites, can add substantial costs and time to EV charging projects.
For more information on assessing the local grid infrastructure, including an explanation of three-phase power, see the Utility Planning section.
Utility pricing can also be a challenge for EV charging installations. Without outside incentive programs, the revenue from DCFC stations typically covers only about one-third of their operating costs. This is largely due to utility demand charges, which are premiums charged by some utilities for using large amounts of electricity during peak hours or when high power is drawn at high rates that exceed certain thresholds.
Since rate and demand charge structures (discussed more in the Utility Planning section) vary greatly between utilities and across States, these costs could have substantial effects on the business case for deploying fast-charging EV infrastructure on rural corridors and in rural communities.
Ultimately, both affordable charging rates and high station utilization are essential for station operators to earn sufficient revenue to offset the costs of purchasing, installing, and operating charging stations within a reasonable payback period (five years or less).
Charging Station Planning and Permitting Coordination
The EV sector is still developing, and many rural localities have little experience with permitting and siting EV charging infrastructure.
Prior to seeking permits, charging station developers and utilities should conduct thorough planning and analyses of several factors, including projected local EV adoption and the associated demand for public charging, local electric grid capacity, right-of-way access and easement issues impacting the siting of charging stations, and other factors.
The exact processes and timeframes for reviewing and approving permit applications can vary widely between local jurisdictions, which can lead to confusion and frustration for project developers. There are significant differences in geography, technical expertise, staff capacity, and right-of-way policies across local jurisdictions.
Public Awareness and Exposure to EVs
Initial EV education, readiness, and deployment efforts were primarily focused on urban areas, where early-market EVs with small battery capacities and shorter ranges were better suited to the shorter driving distances common in urban areas. As a result, public awareness and exposure to EV technology has typically been lower in rural areas.
Without targeted outreach on the benefits of EVs and without higher visibility of EVs on the road, consumers, businesses, and public fleets are likely to continue investing in conventionally fueled vehicles.
Poor or lacking infrastructure signage along roadway corridors, along with generally insufficient information on the availability of charging infrastructure, also stymies the EV market.
For these reasons, public outreach efforts by entities such as the DOE-designated national network of Clean Cities coalitions are critically important for bolstering EV awareness, equitable access, and adoption among rural entities (for more information, see the Clean Cities Coalitions section). Such outreach efforts can include public education workshops, ride-and-drive events, fleet outreach and trainings, and highway corridor signage.