The rise of electric vehicles in the US: Impact on the electricity grid

As the US moves toward its ambitious goal of electrifying the transportation sector, the rise of electric vehicles (EVs) is no longer a question of “if” but “how fast.” By 2030, estimates suggest there will be anywhere from 26 million to 48 million EVs on the road. With this shift comes the demand for an equally expansive charging infrastructure: up to 29 million ports to meet both private and public charging needs.

This transformation represents not just a technological shift, but a fundamental change in how we think about mobility, energy consumption, and sustainability. However, while the growth of EVs should reduce emissions and dependence on fossil fuels, it also raises critical challenges for the electricity grid. EV charging, especially when concentrated during peak hours, risks overwhelming the current grid infrastructure, leading to capacity and stability issues. As the nation plans for an electric future, strategic investment in grid modernization, smart charging solutions, and proactive utility upgrades will be essential to maintaining a stable and reliable power supply. Successful electrification won’t hinge on how many EVs can be supported, but on how effectively the grid can be prepared for the surge in demand.

As EVs continue to replace traditional internal combustion engine vehicles, the growing need for energy to charge millions of EVs by 2030 presents a both a challenge and an opportunity for the US electricity grid. To ensure that the power grid remains reliable while accommodating growing demand, understanding the impact of EV charging on daily electricity consumption is critical.

EV charging load will create new peaks in demand

Electricity demand is the sum of all consumption activities within the distribution and transmission networks, and traditionally encompasses residential, commercial, and industrial sectors (see Figure 1). In 2023, total US electricity demand reached about 4,000 terawatt hours (TWh). Most of this was managed by regional balancing authorities such as California Independent System Operator (CAISO) and Electric Reliability Council of Texas (ERCOT). These authorities are responsible for ensuring that electricity generation capacity aligns with forecast demand. This task becomes increasingly complex as the grid must accommodate fluctuating EV charging loads.

To maintain grid stability, balancing authorities rely on real-time data and forecasting models, enabling them to adjust operations and market signals in response to shifting demand. This capacity to dynamically manage load and generation is critical, especially as the integration of millions of EVs introduces new consumption patterns. Balancing authorities need to synchronize these changes in consumption with existing demand from both traditional sectors and the new demand from data centers.

However, managing electricity consumption is not only about meeting the total demand but also about handling that demand when it occurs. As the grid integrates more EVs, the timing of electricity consumption becomes critical to maintaining stability and avoiding congestion during peak periods.

The daily load profile, which tracks electricity use throughout the day, plays a crucial role in understanding how different sectors consume electricity at various hours. The hourly demand curves, such as those from CAISO, ERCOT, New York Independent System Operator (NYISO), and Midcontinent Independent System Operator (MISO) (see Figures 2 and 3) highlight the complexities of managing grid load across different regions. Each of these balancing authorities operates within a unique geographic and climatic context. CAISO, NYISO, and ERCOT roughly correspond to the states of California, New York, and Texas, respectively, while MISO spans 15 states from the Midwest to the South Central states. Analysis of these curves reveals several key insights:

These seasonal and hourly variations make the task of integrating new EV loads more challenging, as the grid is already stretched during these peak periods.

Managing charging behavior will be key for grid efficiency

With around 280 million passenger vehicles currently on US roads,[1] the transition to EVs will undeniably continue to change the dynamics of the electricity grid. The average American drives 13,500 miles annually.[2] For EVs, that translates to around 3 to 4 miles per kWh, depending on the vehicle. This means an individual EV could demand around 3,857 kWh of electricity each year, on average. When scaled to the projected 26 to 48 million EVs by 2030, that equates to an annual demand of between 100TWh and 185TWh (see Figure 4),or about 2.5% to 4.6% of the nation’s current electricity consumption.

[1] US Department of Transportation, Bureau of Transportation Statistics, National Transportation Statistics, 2022

[2] US Department of Transportation, Federal Highway Administration, Office of Highway Policy Information, 2022

While this might seem manageable for grid operators, the real challenge lies in the timing and location of charging. Charging patterns vary based on user behavior, charger type, and vehicle specifications such as charge rates and battery size. For passenger vehicles, over 80% of charging occurs at home, typically overnight when vehicles are parked for extended periods. Commercial vehicles and fleets, including delivery vans, buses, and ride-hailing services, often operate on tighter schedules and cover more mileage than personal cars. As a result, they require more frequent and faster charging. Commercial vehicles are typically charged at central depots overnight. However, some may also require midday charging, particularly fleets that operate in shifts or require extended range throughout the day. These midday charging sessions are often performed using a faster Direct Current Fast Charger (DCFC) to quickly replenish the battery, putting additional strain on public infrastructure, particularly in urban areas.

Moreover, the aggregate demand from millions of EVs charging simultaneously – especially during peak electricity demand hours – could overwhelm the grid’s capacity, leading to brownouts, voltage drops, or, in extreme cases, blackouts. This risk is especially pronounced in areas like California and Texas, where evening demand peaks caused by air conditioning could coincide with EV charging surges. The increased use of renewable energy like the solar power supplied by photovoltaic systems, which do not produce electricity at night, will exacerbate this challenge.

The complexity of EV charging is not merely about increased electricity demand; it’s about the aligning of unpredictable EV charging patterns with the existing grid load. The grid’s ability to handle this dynamic demand will depend on how well we can adapt charging behaviors to align with off-peak periods and geographically distribute charging loads away from areas of congestion. This shift in demand necessitates a parallel evolution in how generation capacity is developed, ensuring that both firm and intermittent resources are available to meet peak loads and variable consumption patterns.

From 2001 to 2023, the US has added an average of about 18GW net generation capacity per year. On average, 7.3GW annually comes from firm sources such as gas, and 10.6GW comes from intermittent renewables like wind and solar power. As seen in Figure 5, there has been a significant shift from adding gas capacity to adding renewable energy assets and storage while phasing out coal. Historically, this capacity growth has generally kept pace with increasing energy demands from population growth and industrial expansion. However, the rise of EVs presents a new and unique pressure on the grid, and could potentially coincide with existing demand peaks and lower peak production from renewable energy assets.

The growing disparity between intermittent and firm generation:

The energy transition has seen a gradual decline in firm generation capacity (particularly from coal), in favor of intermittent renewable sources. While this aligns with decarbonization efforts, it introduces a degree of variability in supply that the grid has not traditionally faced at this scale. EVs, which often require charging during peak hours, risk exacerbating this variability if the timing of charging sessions aligns with lower renewable output periods. Intermittent sources alone may not fully meet demand, especially as peak loads rise with higher EV adoption. This gap underscores the need for energy storage and more flexible solutions such as demand management to supplement renewables, particularly during periods of high demand or reduced output from wind and solar farms.

Rising energy demand from data centers intensifies grid competition

Compounding the challenge, another significant source of demand is rapidly emerging. Data centers, driven by the proliferation of artificial intelligence (AI) technologies, are expected to increase their electricity consumption significantly over the next decade. In 2023, the Electric Power Research Institute (EPRI) reported that US data center electricity consumption accounted for 152TWh (see Figure 6) or 3.8 % of the nation’s current electricity consumption. By 2030, their demand could surge by up to 166%, hereby accounting for as much as 10 % of total US electricity consumption. This growth represents a potential collision course between EV-related electricity demand and the power needs of an AI-transformed economy.

Can future generation capacity keep up with growing demand?

Looking forward, projected generation capacity additions between 2024 and 2030 show a continued shift in focus. On average, we expect over 50GW of annual additions from renewable sources, supported by energy storage technologies. Firm capacity is projected to grow by 26GW annually, on average (see Figure 7). The only firm capacity growing is gas. While these projections indicate a robust buildout of clean energy, the question remains whether this capacity growth can keep up with the concurrent demand increases from both the electrification of transportation and the AI-driven expansion of data centers.

Balancing intermittent supply with rising demand poses a key challenge

The path forward must be carefully navigated. The increase in renewable energy, while essential for achieving decarbonization goals, must be complemented by reliable solutions. This includes enhancing storage technologies, diversifying firm generation sources, and deploying grid flexibility measures that optimize the timing of energy consumption. For EVs, time-of-use (TOU) pricing, managed charging, and vehicle-to-grid (V2G) systems will be essential future tools for mitigating the risk of overloading the grid during peak periods. Together, these strategies will help manage demand surges while ensuring that intermittent supply from renewables can be leveraged effectively.

If the electricity demand from electrification of transportation is left unmanaged it could overwhelm local utilities. Innovative approaches like TOU charging, managed charging, and V2G solutions are being deployed to not only help balance the load on the grid but also to create cost savings for consumers and support the broader goal of integrating more renewable energy into the electricity mix.

Time-of-use charging

TOU charging is an approach where electricity prices vary based on the time of the day, incentivizing consumers (not just EV owners) to charge during off-peak hours when electricity is cheaper. This helps alleviate the stress on the grid during high-demand periods. For EV owners, TOU rates can encourage charging during these off-peak hours. For example, California’s utility, Pacific Gas & Electric (PG&E), offers TOU rates for all electricity consumption, with many EV owners opting to charge their cars at night when demand is lower. Participants of such programs save up to 15% to 20% on their electricity bills, while simultaneously helping utilities manage peak demand more effectively. TOU programs have shown significant potential in reducing grid stress.

Managed charging

Managed charging enables utilities or third-party operators to shift EV charging times to off-peak hours, helping to balance grid demand. Baltimore Gas and Electric (BGE), a subsidiary of Exelon, is piloting a program where participants allow the utility to control their EV charging during specific demand response events. These programs have shown promising results, with up to 30% of participants shifting their charging habits, incentivized by monthly or annual financial benefits ranging from USD 3 to USD 250.

To scale these programs effectively, however, a few foundational investments and regulatory measures are necessary. First, it is critical to address the consumer data privacy concerns around the collection of charging data. Second, foundational investments in technologies like Automated Metering Infrastructure (AMI) and Distributed Energy Resource Management Systems (DERMS) are essential. AMI enables two-way communication between utilities and customers, helping detect EV chargers, analyze consumption patterns, and monitor voltage profiles. Meanwhile, DERMS provide real-time data and remote control over charging stations, optimizing grid management. Although progress on smart grid deployments is advancing across the US, it remains uneven. This could impact broader adoption.

Vehicle-to-grid (V2G)

V2G technology allows EVs to not only draw power from the grid but also return surplus electricity during peak demand periods. Successful pilots, like Revel’s collaboration with Fermata Energy and Nine Dot Energy in New York City, have showcased the potential for EVs to discharge energy back into Con Edison’s grid, hereby improving grid reliability. These demonstrations highlight how V2G can transform EVs into valuable, decentralized energy assets.

For V2G to achieve mass adoption, infrastructure requirements also arise. Just as with managed charging, the deployment of AMI and DERMS is necessary to support bi-directional energy flow, along with strong privacy regulations to protect consumer data. These technologies will help integrate V2G into a flexible, decarbonized grid, turning EVs from passive consumers of energy into active contributors to grid stability.

As EV adoption accelerates, evolving policy and regulation are crucial in managing the intersection of increased electricity demand and grid modernization. Federal initiatives like the National Electric Vehicle Infrastructure (NEVI) program and the Inflation Reduction Act (IRA) have made significant strides in supporting EV infrastructure, offering funding for charging networks and incentives for grid upgrades. Looking forward, FERC Order No. 2023 will fast-track interconnection reforms, streamlining the integration of renewable energy projects. This will be essential for meeting the combined demand from EVs and data centers. Additionally, policies that promote TOU pricing, managed charging, and V2G technologies will be vital for optimizing grid flexibility and preventing strain during peak hours.

These regulatory efforts ensure the alignment of EV growth with grid modernization and decarbonization goals, laying the foundation for a resilient and sustainable electricity infrastructure.

The rapid growth of EV adoption is transforming the energy landscape, forcing us to rethink not only how we generate electricity but also how we use it. The increasing demand from EVs represents both a challenge and an opportunity for modernizing the grid. More than just adding capacity, the future of transportation electrification hinges on building a grid capable of balancing dynamic, decentralized demand with intermittent renewable generation.

While managed charging, V2G integration, and grid-flexibility measures will be essential in avoiding grid stress, the growth in demand from EVs is just one part of the equation. Data centers, driven by the rise of artificial intelligence (AI) and cloud computing, are rapidly becoming an even larger consumer of electricity. Unlike the variable, peak-driven demand of EV charging, data centers’ steady demand offers more predictability, making it easier for utilities to manage. The challenge lies in ensuring the grid can meet both the predictable, constant energy needs of data centers and the more intermittent, time-sensitive demands from millions of EVs. Ultimately, the solutions that work for EVs – smart grid flexibility, TOU pricing, and storage – will need to be part of a broader strategy that accommodates the entire spectrum of new energy demands.

As the US continues its march toward decarbonization, the alignment of technology, policy, and strategy will define the success of this transformative era. The stakes are high, but so are the possibilities.