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It’s an exciting time for transportation decarbonization. Consumers, manufacturers, and governments are uniting around zero emission vehicles, with electric vehicles leading the way. Global sales of electric cars and SUVs topped 10 million in 2022, and are expected to grow by 50 percent in 2023.  Rapid transportation electrification has the potential to deliver powerful climate, health, and economic benefits. Still, the market will not transform fast enough on its own. Smart policies are needed for the transition to happen at the speed needed to address climate change.

Climate. The transportation sector is responsible for about 25 percent of carbon dioxide emissions, but technological advances and growing market momentum have opened up new possibilities for a rapid shift to zero-emission vehicles. If fully leveraged, electric cars and SUVs have the potential to be the third largest of all climate solutions and electric trucks the fifth largest.

Health. Zero-emission vehicles also offer powerful local air quality, health, and equity benefits. Currently, air pollution from road vehicles causes 500,000 premature deaths annually. Indeed, vehicle pollution causes many negative health effects, from asthma to cancer, in addition to early-onset mortality. These health impacts disproportionately fall on low-income communities.

Economics. Incredible innovation and falling costs for batteries have been a game changer for EV economics. Battery prices fell 89 percent from 2010-2021. Pandemic-induced price spikes interrupted this trend in 2022. More recently, battery prices resumed their downward march as EI predicted. In 2023, prices fell 14 percent from their 2022 level, reaching a new record low. As a result of this progress, many electric vehicles are cheaper to own than comparable gas vehicles. EVs’ economic edge will continue to grow with further technological progress and economies of scale.

Global Momentum. Transitioning to 100 percent all-electric vehicle sales by 2035 is technically feasible and highly beneficial, spurring a race to claim leadership. California, the United Kingdom, and the European Union’s 27 member nations have all committed to fully transitioning to zero-emission vehicle sales by 2035. An even larger coalition, including 30 countries and 14 major automakers, have committed to making zero-emission vehicles the new normal by 2040. All-electric vehicle sales shares in 23 countries, including the U.S., have exceeded 5 percent, the level at which the vehicle market typically begins to transform.

Our Work

We help transportation policymakers identify and calibrate policies needed to remain below the 1.5 degree Celsius warming threshold. We focus on motor vehicle emissions, which represent about 75 percent of  total transportation GHG emissions. Our goal is to achieve 100 percent zero-emission vehicle sales as quickly as possible, no later than 2035 and earlier in leading markets, prioritizing the world’s largest new vehicle markets.

Our 2035 2.0 policy report identifies the suite of policies needed to transform the U.S. transportation sector, such as ZEV sales standards or stringent GHG emissions tailpipe standards, which would steadily increase EV deployment over time. Other policies needed to optimize transportation decarbonization include targeted vehicle incentives, charging infrastructure investment, and equity-focused programs, all of which must adapt as the market matures. Sustainable urban design—expanding quality public transportation, and promoting walkable, bikeable communities —is also fundamental, especially where the share of the urban population is growing.

We tout the advantages of learning curves, which explain how increasing deployment of new technologies leads to greater economies of scale and lower costs for consumers. Understanding learning curves is essential to fully explain the economic opportunities leadership in transportation decarbonization presents. Yet, policy analysis for decision-makers often fails to reflect historical innovation, much less account for predictable future innovation. By illuminating economic upsides, we build support for stronger policies.

The Transportation Program Team

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