The state of Illinois has set a goal of one million electric vehicle (EV) registrations by the year 2030. With fewer than 60,000 registrations currently, the state has a long way to go.
Megha Lakhchaura was appointed by Gov. JB Pritzker to coordinate the state's push to electrify the stock of automobiles registered in Illinois. According to Lakhchaura, there are three areas that must be addressed in getting more electric cars on the road in Illinois: supply, demand and infrastructure.
On the supply side, EV manufacturers are having trouble keeping up with consumer demand for many vehicles. For instance, demand was so high for the Ford F-150 Lightning that in April the company announced it had quit taking orders for the 2022 model year. That initial order of 200,000 vehicles will take nearly three years to fill, even with projected increases in production capacity. Customers who ordered the 2022 model will pay a base price of $40,000 (up to $90,000 for the Platinum trim), while the starting price for the 2023 model year is $55,000.
Mike Quimby, general manager of Green Hyundai in Springfield, said that he can hardly keep electric vehicles on the lot. "Most of the EVs that arrive are presold. Demand is off the charts." This in spite of the fact that Hyundais are not eligible for the federal tax credit for domestically manufactured EVs. MSRP for the base 2023 Hyundai Kona is $33,550. Quimby sees very few EVs traded in, and they are quickly snapped up.
Electric truck manufacturer Rivian, which has its only manufacturing plant in Normal, fell short of its goal of 25,000 vehicles by about 700 units in 2022. The company cited supply chain issues as the cause, but the Wall Street Journal pointed out Jan. 10 that Rivian also lost four high-level executives this past year, including Patrick Hunt, its Head of Strategy.
On the demand side, both the state and federal governments offer incentives for EV purchases. The state of Illinois offers a rebate of $4,000, but on Jan. 11 the Illinois Environmental Protection Agency announced that the number of applications has exceeded the amount of available funding. Another cycle for rebate applications will open when additional funding becomes available, according to IEPA.
The federal incentive is in the form of a tax credit of up to $7,500. Most consumers will receive less than that because of rules regarding income and vehicle price. For example, federal tax credits are only available for passenger cars with a sticker price less than $55,000 and trucks with a sticker price less than $80,000.
On Jan. 13, Tesla announced that it had cut prices by up to 20%, making more of its vehicles, including its most popular seller, eligible for the federal tax credit. In fact, with the tax credit, the Tesla model Y long-range costs about $3,500 less than the average price of $49,507 for a new vehicle in the United States, according to Kelly Blue Book.
Quimby said he sees two issues of concern for his customers who are on the fence about buying an EV: reliable access to charging stations, and the cost of batteries. He noted that the infrastructure isn't in place to accommodate EV drivers going on long trips, a matter of particular concern in an area like central Illinois. "Not only are there too few charging stations, but in cold weather the range of the vehicle diminishes."
The battery is the most expensive component of an EV. Quimby said that when the car is involved in an accident, if the battery is damaged it increases the likelihood that the insurance company will declare the vehicle a total loss. A gasoline-powered vehicle suffering a similar amount of damage could be repaired. When the battery reaches the end of its service life it may be prohibitively expensive to replace, even if the rest of the vehicle is in good condition.
Under federal law, batteries in all EVs sold in the United States must be warranted for a minimum of eight years or 100,000 miles, so Consumer Reports estimates replacement costs of batteries only up to the 2014 model year. For 2023, those costs range from $4,489 for a Prius to $17,657 for a Nissan Leaf.
Lakhchaura says the state is working aggressively to provide a charging infrastructure in Illinois that will keep up with anticipated demand. The state plans to install 1,300 fast-charging stations in the next two years, some of the cost paid with $146 million in federal money. One estimate places the cost of a "level two" charging station at $6,000, not counting infrastructure which can add $15,000 or more to the cost.
"We've seen a steady acceleration in EV registrations," Lakhchaura said, "over 19,000 during the past year, despite the severe supply chain interruptions experienced by the industry during that time. Rapid improvement of infrastructure has to be a priority."
Don Howard is an intern at Illinois Times and is currently enrolled in the master's degree program in Public Affairs Reporting at UIS. Contact him at [email protected].