Electric Vehicles Could Save New Mexicans Billions of Dollars
FOR IMMEDIATE RELEASE
[SANTA FE, NM] - New Mexicans can save more than $20 billion through 2050 by moving from gas-powered cars to electric vehicles (EVs), according to a new report. The resulting reduced air pollution would provide an additional $5 billion in benefits, while widespread EV adoption would reduce all utility customer bills by nearly $5 billion, adding up to a total of $30 billion saved.
The report, Plug-in Electric Vehicle Cost-Benefit Analysis: New Mexico, was commissioned by the Natural Resources Defense Council (NRDC) and the Southwest Energy Efficiency Project (SWEEP), and prepared by MJ Bradley & Associates, a strategic consulting firm with expertise in energy and environmental issues.
“This report underscores an essential reason to get more EVs on the road: lowering utility bills for everyone,” said NRDC Senior Attorney Max Baumhefner. “Because EV charging generally occurs when people are sleeping and there is plenty of spare capacity in the electric grid, charging can improve the utilization of the system, which reduces electricity prices for all customers. To lower utility bills and reap other benefits of EVs, worth tens of billions of dollars, the state should adopt policies to make electric vehicles more affordable and grow the market in the coming year.”
“Driving on electricity will deliver major benefits for New Mexicans,” said Travis Madsen, Transportation Program Director at the Southwest Energy Efficiency Project. “Electric cars will collectively save their owners billions on fuel and maintenance, make the electricity system more cost-effective, and reduce air pollution. There’s every reason to plug in to an electric future. New Mexico should act to accelerate electric vehicle deployment.”
The study looked at a scenario where New Mexico deploys enough electric vehicles to reduce light-duty fleet global warming pollution by 80 percent below 2005 levels by mid-century. This would require 25 percent of vehicles to be electric in 2030, 58 percent in 2040 and 90 percent in 2050.
Electric vehicles are cheaper to operate than conventional cars. Driving on electricity is more cost-effective than gasoline, comparable to gas at close to $1 per gallon, two to three times cheaper than gasoline has ever been (adjusted for inflation). Electric vehicles also do not need oil changes, transmission replacements, or other kinds of maintenance that conventional cars require. Those savings add up to thousands of dollars per vehicle. The study estimated that electric car owners would save about $2,250 per vehicle per year by 2050, cumulatively saving New Mexico’s EV owners $20 billion (in 2019 dollars).
Additionally, the study found that collectively all New Mexicans would save almost $5 billion on their electricity bills through 2050 -- even New Mexicans that don’t drive an electric vehicle, and New Mexicans that don’t drive at all. By plugging electric vehicles into the grid, EV owners will put additional revenue into the electricity system (money that otherwise would go to pay for gasoline). That additional revenue can be used to support operation and maintenance of the electrical grid, thus reducing the need for future electricity rate increases. These benefits can be maximized through programs that help the electricity grid operate more effectively, such as by charging electric vehicles at night when demand for electricity tends to be lower. The report estimates that the average New Mexico household would save more than $130 in 2050 on their electricity bill as a result of the addition of electric vehicles to New Mexico’s electricity system (in 2019 dollars).
The study estimated the benefits that flow from reduced tailpipe pollution. Electric vehicles produce no direct emissions; and as the state moves towards increasingly cleaner forms of electricity, EVs will also get cleaner. That makes EVs a major tool that New Mexico can use to improve public health and reduce climate change. The study estimates that the cumulative social value of reduced emissions in New Mexico through widespread EV adoption could approach $5 billion by mid-century.
The study also looked at a more moderate scenario for electric vehicle deployment, based on the current requirements of the Zero Emission Vehicle program, which Governor Lujan-Grisham has announced New Mexico plans to adopt. That scenario modeled steady electric vehicle growth from 6 percent of passenger vehicles in 2025 to 20 percent in 2050. Under this scenario, New Mexicans would save almost $4 billion on driving costs, electricity customers would save $0.4 billion on their utility bills, and the social benefit of reduced pollution would be $1 billion.
“In other words, the bigger New Mexico goes on electric vehicles, the larger the benefit,” said Madsen.
The state took a major step to accelerate vehicle deployment and unlock these benefits in 2019 by enacting House Bill 521. That law requires investor-owned electric utilities, such as PNM, to help enable driving on electricity, by helping to increase the number of charging stations, among other programs. Utilities are currently planning their programs for filing prior to January 1, 2021. Rural electric cooperatives are similarly planning improvements to their electricity systems to accommodate more electric vehicles.
This year, the legislature is considering SB-2, an electric vehicle tax credit. Adopting this policy will be important to lower the up-front cost of electric vehicles and make them affordable for more people, including lower-income people who could really benefit from reduced transportation costs. Currently, electric vehicles tend to cost more up-front than comparable gasoline vehicles. As battery technology continues to improve and manufacturing scales up, experts anticipate that electric vehicles will reach cost parity with conventional vehicles sometime in the middle of this decade. SB-2 will help more drivers benefit from electric vehicles in the meantime.
Governor Lujan-Grisham has stated that the New Mexico Environment Department will propose the adoption of the Clean Cars Program, including the Zero Emission Vehicle (ZEV) rules mentioned above, to the Environmental Improvement Board as early as 2020. This policy will be important to ensure that car manufacturers make electric vehicles available for purchase at New Mexico car dealerships. New Mexico would join 11 other states that have adopted the ZEV program, including Colorado.
The Natural Resources Defense Council (NRDC) is an international nonprofit environmental organization with more than 3 million members and online activists. Since 1970, our lawyers, scientists, and other environmental specialists have worked to protect the world's natural resources, public health, and the environment. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Bozeman, MT, and Beijing. Visit us at www.nrdc.org and follow us on Twitter @NRDC.
The Southwest Energy Efficiency Project (SWEEP) is a public interest organization advancing more efficient energy use and clean transportation options in Arizona, Colorado, Nevada, New Mexico, Utah, and Wyoming. For more information, visit www.swenergy.org