Why Electric Cars Are Good For The Economy? (6 Reasons)

The increasing popularity of electric vehicles (EVs) is commonly seen as an initiative toward a green environment. More than 1.6 million electric cars are on the road worldwide today.

The EVs offer some advantages to the economy, which is one of the reasons why they are preferred by the governments of many countries.

Even while the market for electric vehicles is still in its infancy, it has the potential to transform a variety of global sectors and economies.

1. Electric Vehicles Benefit People’s Health

Public health and the global climate are seriously harmed by pollution from automobiles, buses, aircraft, railways, and ships.

Volatile organic compounds (VOCs), particulate matter (PM), nitrogen oxides, and other greenhouse gases like carbon dioxide are the pollutants found in car exhaust.

Routinely inhaling these have terrible effects on human health.

In the United States, just particulate matter (PM), which consists of tiny, inhalable particles 30 times smaller than human hair, is responsible for at least 1 million early deaths yearly.

According to estimates from the Minnesota Pollution Control Agency (MPCA) and Minnesota Department of Health (MDH), ozone and particulate matter pollution from all sources cause 2,000–4,000 fatalities annually in Minnesota.

Thankfully, one part of a multi-pronged approach to decarbonizing the economy and reducing greenhouse gas emissions is electric automobiles, which have little to no exhaust emissions.

Just one electric vehicle on the road can reduce carbon dioxide emissions by 1.5 million grams annually on average.

  • Even with the worst outcome, a cheap electric vehicle with a battery made in China still emits 37% less carbon dioxide than a car powered by gasoline.
  • In the best outcome, an electric vehicle with a battery made in Sweden and operated in Sweden will emit 83% less pollution than a vehicle powered by gasoline.

2. Electric Vehicles Are Good For The Climate

The largest contributor to greenhouse gas emissions in the United States in 2016 was transportation, emitting 19 billion tons of carbon dioxide every year, which replaced the power industry and energy generation after a continuous reign.

Since the massive lithium-ion batteries that power automobiles need a lot of resources and energy to construct, producing an electric automobile will result in higher greenhouse gas emissions than producing an ordinary gasoline car.

For instance, 15% extra emissions are produced during the construction of a mid-sized electric vehicle with an 84-mile range.

This might already start to make an impact over the next 5-10 years with more electric cars.

Electric cars offer a huge potential for reducing greenhouse gas emissions in this situation.

Even when accounting for the mining and battery manufacturing at the beginning of their lifecycles, electric vehicles produce fewer greenhouse gas emissions throughout the course of their lifetimes than their internal combustion engine counterparts.

The United States as a whole will profit greatly from electrifying its transportation infrastructure. With each passing day, EVs are going to become more climate-friendly.

3. Electric Vehicles Support The Grid Economy

Production, transmission, and electricity distribution now operate at a capacity factor of less than 50% in the United States.

The method was created in order to guarantee utilities can meet the maximum yearly peak demand, which only lasts a few hours annually .

The idea is similar to constructing a sizable NASCAR racing track that will be fully utilized for an event once a year but is entirely underutilized the rest of the time.

By producing more electricity from existing facilities and sending more electrons across substations, one can take advantage of the system’s low utilization factor and save money on EVs.

When done off-peak, there is no increased expense to the distribution system and only the minimal operating cost of the power stations.

All of this indicates that EVs charged at home overnight slightly reduces everyone’s electricity bill.

Since the average electric vehicle consumes nearly 60,000 kWh over the course of its lifetime and the average grid charges in the United States are around 5.5 cents per kWh, these new distributions and transmission earnings are a total of over $3,500.

The EV advantages extend far beyond the grid and actually pour benefits into the state’s general economic situation.

4. Electric Vehicles Play An Important Role In Energy Security

In 2021, American imports of petrol at 8.47 million barrels per day continued to play a significant role in keeping domestic and global markets in balance.

Transport accounts for approximately 28% of the nation’s total energy needs and 72% of its petroleum consumption.

Utilizing more energy-efficient vehicles, such as hybrid and electric models, promotes the American economy and contributes to the fleet’s diversification.

Numerous fuel sources are used to produce electricity for the electrified segment of the transportation industry. All of this increases the energy security of our country.

Battery electric vehicles and plug-in hybrid electric vehicles are able to run entirely on the electricity generated in the United States from sources like:

  • solar energy,
  • hydropower,
  • wind,
  • coal,
  • natural gas,
  • and nuclear energy.

This entire transportation shift will help the economy to flourish and lessen the burden of the import of oil from other countries.

5. Electric Vehicles Maintain Fuel Economy

Since electric-drive components are highly efficient, electric cars can substantially save on gasoline expenditures.

The fuel economy for electric cars is calculated differently from that for traditional cars because they run entirely on electricity.

Kilowatt-hours (kWh) per 100 miles and miles per gallon of gasoline-equivalent (MPGe) are typical measures. Modern all-electric automobiles can achieve 130 MPGe or more and can travel 100 miles at just 25 to 40 kWh, based on how they have been operated.

Compared to other similar conventional cars, plug-in hybrids often have lower fuel costs and better gas mileage. 

For instance, according to FuelEconomy.gov, the average city and highway fuel efficiency figure for the 2021 Toyota Corolla Hybrid is 52 miles per gallon (MPG), compared to 34 MPG for the standard Corolla (four-cylinder, automatic).

The payload transported over the vehicle has a massive effect on the fuel efficiency of moderately and heavily loaded all-electric vehicles and plug-in hybrids, but in suitable circumstances, all-electric vehicles maintain a considerable fuel-to-cost edge against their traditional counterparts.

6. Electric Vehicles Create New Employment Opportunities

The potential for electric cars to create new jobs is currently difficult to forecast with any degree of accuracy.

There is reason to believe that the electrification of private transport will result in the development of jobs across a variety of businesses.

In order to build more technologically advanced cars, the auto industry must hire more people. Numerous of these jobs would be produced in industries with strong ties to:

  • modern battery technology,
  • auto production,
  • research
  • development.

Increased production by companies that manufacture electric cars, EV parts, and EV infrastructure results in the creation of direct jobs.

Occupations associated with suppliers to these direct producers are known as indirect jobs. Additionally, increased spending in the larger economy is a result of more hiring in direct and indirect occupations.

These provide induced employment in sectors including apparel, food, and entertainment.

According to the BlueGreen Alliance/American Council for an Energy-Efficient Economy’s estimate of total job generation from electric vehicles, including direct, indirect, and induced employment is 570,000 new jobs, particularly 50,000 in the production of cars.

The Advantages of Driving an Electric Vehicle

Electric Vehicles Are More Environmentally Friendly

With the exception of the carbon output from the production process, electric automobiles are more environmentally friendly than gasoline or diesel vehicles in a number of significant ways.

Electric vehicles are energy efficient. Gasoline-powered cars are around 17–21% efficient, whereas electric cars are 85–90% energy efficient.

The energy source used to charge the electric car is a combination of energy production that includes wind and solar energy as well as power plants.

Electric automobiles do not generate any smoke or toxic exhaust gases because they have zero exhaust emissions.

Automakers are generally working to develop innovative concepts for a carbon-neutral environment.

Well-known automakers like Tesla, BMW, and the Volkswagen Group have made serious commitments to reduce and eliminate emissions.

Reduced Maintenance and Fuel Costs

In California, the cost of recharging an electric car is about half that of a conventional gasoline vehicle traveling the same distance.

Also, maintenance and service is cheaper with electric cars.

Most people charge their electric vehicles overnight at home, so they may start their days with a full tank.

There will be a common facility for charging with the increase of office and outdoor charging points. Anyone can use applications or online maps to look up public charging locations. The majority of hydrogen automakers already give free fuel for three years with their hydrogen fuel cell vehicles.

Electric cars have considerably fewer moving components. Because of this, electric engines do not need timely replacement of:

  • spark plugs,
  • oil changes,
  • or fuel filters.

By using the electric engine to slow down the car, regenerative braking also increases the life of the brake pads.

Usually, this results in reduced maintenance expenses overall and more savings.

Numerous power companies provide time-of-use tariffs that are exclusive and change according to the time of day when the energy is used. Off-peak rates offer substantially lower charge prices.

For significant gasoline savings, electric cars can be charged anytime with feasibility at lower rates.

Financial Incentives to Buy or Lease an EV

The cost of purchasing or leasing an electric car has been reduced thanks to federal, state, and municipal subsidies and occasionally amazing lease offers.

tax credit for rechargeable batteries, hydrogen fuel cells, and hybrid electric cars has been offered, ranging from $2,500 to $7,500 depending on the battery capacity. 

The automaker will receive a credit for leasing an electric car.

The Clean Vehicle Rebate Project (CVRP) directly offers incentive reductions to those who buy or lease eligible electric automobiles. Applicants with low to moderate household incomes are qualified for enhanced refund amounts.

Local electric utilities and air districts frequently offer discounts for the buying or leasing of electric vehicles as well as incentives for the installation of residential charging points.

Final Thoughts

These convincing economics are a strong impetus to consider electric vehicles.

By offering tax breaks for EV sales legislators and regulators are definitely removing barriers to electric car adoption.

Other supportive programs like subsidies for chargers, building codes that make new development EV-ready, faster permission for charger installation and rules that enable utilities to contribute to the cost of creating charging infrastructure can also help increase EV sales.

 

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