Note: This blog was originally published on 3/29/2019 by the legal news service Law360.

The automated vehicle revolution has begun, and will accelerate in the near future. AVs are vehicles that automate the act of driving. Many current-model cars already incorporate features such as adaptive cruise control, self-parking and lane-keeping assistance.

But a larger paradigm shift will occur in the near future when high-level AVs capable of full self-driving will reach some markets. Experts predict these vehicles will be safer than human-driven vehicles, but they will still sometimes crash and cause injuries.

The current auto liability framework works well for human-driven vehicles. However, it assumes a neat distinction between “the driver,” a human who is always responsible for controlling the vehicle, and “the manufacturer,” a company with no post-sale control over the vehicle.

Approximately 94 percent of car crashes are caused by human driver error; here, the human driver can be liable but the vehicle manufacturer cannot. Conversely, approximately 2 percent of car crashes are caused by a defect in the vehicle; here, the vehicle manufacturer can be liable but the human driver cannot. Both scenarios assume one party (but not the other) is presumptively “at fault” for a crash. Liability flows from this fault determination; fault flows from control.

In a self-driving car, however the vehicle’s true “driver” — the party actually controlling the vehicle — is not the human but the vehicle itself. Several recent AV prototypes do not even have a steering wheel or pedals for the human occupant to use. In this type of vehicle, the human vehicle occupant cannot exert control over the vehicle and thus cannot make a driver error. This is significant: in a self-driving car, the traditional pathway to human liability is foreclosed.

If the human driver cannot be liable, it is likely that liability will shift to the manufacturer. The bigger question, however, is whether the liability standard will also shift accordingly. Human drivers are typically evaluated under a negligence standard; manufacturers are typically evaluated under a strict products liability standard. As we shall explain, the combination of manufacturer-borne liability with a default products liability standard could threaten the societal gains we could achieve through AV usage.

The prospect of assigning all AV liability to manufacturers has theoretical appeal: After all, the manufacturer of the self-driving software is presumably the only party capable of controlling or improving the safety of the vehicle. And from an economic perspective, assigning liability costs to the manufacturer, the “cheapest cost avoider” in this scenario, should incentivize the manufacturer to maximize safety precautions. This would benefit AV consumers and to all other parties sharing the roads with these vehicles as well.

However, if we assign all AV liability to manufacturers, these manufacturers could incur significant liability costs. This strikes us as fundamentally fair: If manufacturers want the financial benefits of selling a proprietary and potentially dangerous product, they should assume the financial risks associated with the product as well. The problem is not the assignment of liability; it is the assignment of litigation costs. Products liability litigation is notoriously time-consuming and difficult — thus, invariably, expensive.

Applying products liability to self-driving cars will not benefit most victim-plaintiffs. Given that AV technology is proprietary, and assuming that manufacturers will fight to protect their source code from discovery, it is not clear where a plaintiff will be able to find a qualified expert who can identify the particular software error that yielded a particular crash. And even if such an expert were available, the legal costs of launching a products liability lawsuit may easily exceed most routine damage claims. Attorneys, not victims, will reap the benefits of this system.

Products liability will also be costly for manufacturers. Even if we are comfortable with manufacturers assuming the costs of victim compensation, the frequency and costliness of defending against products liability lawsuits is problematic for two reasons. First, those litigation costs will ultimately be passed on to consumers, driving up the cost of AV use and ownership. Second, these litigation costs may force smaller manufacturers out of the market, creating oligopoly.

Both of these situations would likely reduce the number of AVs on the road. And if, as we predict, the use of AVs is a net positive for society — if AV usage can improve road safety, increase access to mobility, reduce vehicle emissions, aid in the movement towards sustainable city design, etc. — then the last thing we should want to do is create a liability system that reduces the quality and quantity of available AVs.

The solution to this problem is to create a manufacturer liability standard that is less costly to both victims and manufacturers. We suggest a manufacturer negligence standard. Here, when an AV crashes, the court could assess the vehicle’s actions under the “reasonable human driver” standard. Thus, if the AV’s actions would be deemed negligent if performed by a human driver (for example, speeding or disobeying a traffic signal), the manufacturer would be liable.

The value of this system is that the court’s analysis could be focused on the crash itself — what the vehicle actually did — rather than analyzing the self-driving software’s source code to determine whether the vehicle was defectively designed. This would be a much easier and less time-consuming (thus cheaper) analytical mode for all parties.

An alternative solution might be to create a victim compensation fund, allowing injured victims to bypass the courts and products liability altogether. This fund could be created from mandatory contributions from manufacturers in proportion to each manufacturer’s market share, or each manufacturer’s share of total AV crashes. A compensation fund could also help victims recover for their injuries more quickly and with less uncertainty than through the litigation process.

If AVs are better for society than human-driven vehicles, we should design our liability to promote their usage. Products liability is simply too costly — both in terms of financial costs and also in terms of the value lost by reducing AV usage — to be the proper legal standard for analyzing AV crashes.

 

This blog is based on a series of four 2019 issue papers on possible approaches to liability and insurance for automated vehicles.

Gordon Anderson is a legal fellow at the UC Davis Policy Institute for Energy, Environment, and the Economy and a third-year student at King Hall, UC Davis School of Law.

Austin Brown is executive director of the Policy Institute. In this role he builds strong connections between the research and policy communities at the local, state, and national levels with a focus on clean energy and sustainable transportation.

 

 

 

On Tuesday, February 26, ITS-Davis’ founding director and California Air Resources Board (CARB) member Daniel Sperling was the first to testify on one of two panels before the U.S. Congressional House Committee on Transportation & Infrastructure at a hearing entitled “Examining How Federal Infrastructure Policy Could Help Mitigate and Adapt to Climate Change.” Dr. Sperling shared his “experiences from California” and “insights from over 30 years studying the transportation system of this country.”

Throughout his testimony, Dr. Sperling identified policy strategies for promoting more environmental, equitable, and efficient transportation in ways that support the economy and promote innovation without necessarily burdening taxpayers. He said, “The point of this hearing and my testimony, is to address the goal of aligning transportation spending with environmental goals—as well as with social goals.”

In his opening comments, he highlighted how the current transformative revolutions in transportation—electrification, automation, and shared mobility—present government with the challenge and opportunity to “refocus and restructure how we fund and manage our transportation system, such that we direct these many innovations toward the public interest.” A key role for government in supporting innovations is to support “pilot and demonstration programs” to enable necessary experimentation.

Other members on the panel included Vicki Arroyo, of the Georgetown Climate Center; Thomas P. Lyon, of the Stephen M. Ross School of Business, University of Michigan; Ben Prochazka, of the Electrification Coalition; and Nancy Young, from Environmental Affairs at Airlines for America. Ms. Arroyo, whose organization has partnered with ITS-Davis on several events and initiatives, spoke about how multiple states and cities have implemented programs that are “promoting adoption of cleaner vehicles and fuels, improving public transportation, and enacting pathways to fund clean transportation innovation.”

After opening remarks from each of the five panel members, congressional members asked questions and spoke about their concerns over a two-and-a-half-hour period. During this Q & A, Dr. Sperling responded to questions posed by representatives including Julia Brownley (D-CA), Mark DeSaulnier (D-CA), Alan Lowenthal (D-CA), Pete Stauber (R-MN), Lizzie Fletcher (D-TX), Abby Finkenauer (D-IA), and Salud Carbajal (D-CA), who recognized Dr. Sperling for his “testimony and leadership on reducing greenhouse gas emissions.”

In responding to questions, Dr. Sperling highlighted California’s policies and programs that could inform federal policies to promote sustainable transportation. For example, he described how the California Cap and Trade Program “funds probably $1B per year in clean transportation and is also used for affordable housing near transit stations and the greening of communities to reduce emissions—with no taxpayer money.”

Dr. Sperling was also asked about his recommendations regarding “carrots and sticks” in policies to promote sustainable transportation, such as the Sustainable Communities and Climate Protection Act (SB 375). He emphasized the importance of carrots: “We need to reward communities that invest in putting in more chargers, bike lanes, transit, etc., because they don’t have the resources.” He added: “That is my biggest plea, to somehow restructure transportation funding so it acknowledges and rewards these environmental goals as well as the vehicle-miles travelled goals.”

Click on the following links to view: video footage of the entire hearing and Dr. Sperling’s written testimony and opening statement.

 

Seth Karten is a science writer for the Institute of Transportation Studies at UC Davis.

Every January, transportation researchers from across the globe descend on Washington, D.C. for the Transportation Research Board (TRB) Annual Meeting, the largest transportation research conference in the U.S. and possibly the world. The 13,000 attendees at TRB 2019 featured a significant contingent of researchers and staff from UC Davis who shared their insights and findings at meeting sessions.

This year, we wanted to do more than that, making sure that legislators and regulators in the area benefited from UC Davis expertise as well. To that end, representatives from the Institute of Transportation Studies at UC Davis (ITS-Davis) and the Policy Institute for Energy, Environment, and the Economy (Policy Institute) met with 15 congressional offices and held two briefings in the House and Senate buildings to share research findings with dozens of key policy leaders at federal agencies. Our goal was not to lobby for any particular policy outcome but rather to provide policymakers with insights that can inform decision-making. It’s all part of our mission to ensure that leading research and sound policy are made inseparable.

Our first briefing, hosted by the 3 Revolutions Policy Initiative—held in the Rayburn House Office Building—was entitled Governance Needs and Opportunities and featured findings from a recent issue paper, “Federal, State, and Local Governance of Automated Vehicles.” Experts presented to a packed room on how vehicle automation will challenge the way we manage vehicles and transportation. The briefing included a discussion of options for integrating automated vehicles into transportation systems in ways that will yield widespread societal and environmental benefits. Speakers included Austin Brown and Mollie D’Agostino of UC Davis, Greg Rodriguez of Best Best & Krieger, Natasha Vidangos of the Alliance to Save Energy, and Scott Goldstein of Transportation for America (Tweet of briefing with pictures).

The National Center for Sustainable Transportation (NCST), a federally funded University Transportation Center based at UC Davis, held a second briefing in the Dirksen Senate Office Building to discuss recent research findings related to sustainable transportation and new transportation technologies, such as automation. The briefing was hosted by Colin Murphy of NCST, and featured UC Davis researcher Alan Jenn of the Plug-in Hybrid and Electric Vehicle (PHEV) Center, who addressed the effectiveness of electric vehicle incentives. NCST researcher Carol Vallett of the University of Vermont spoke about how state Departments of Transportation can build and maintain a workforce capable of meeting 21st-century transportation challenges (Tweet of briefing with pictures).

ITS-Davis researchers and Policy Institute staff also met separately with members of Congress and their staffs to discuss transportation topics that are likely to arise during this legislative session, discuss relevant research, and identify knowledge gaps that UC Davis can help fill to support smart transportation policy. UC Davis researchers spoke in person with Representatives Ami Bera, Mark DeSaulnier, John Garamendi, Allen Lowenthal, and Doris Matsui. Transportation and energy staff from another 10 offices also met with ITS-Davis representatives over the course of the week. Figuring out how to support the transition to electric vehicles was a common theme in these conversations, as was understanding how automation and e-commerce are changing how goods and people move. These topics will be explored in greater depth at the upcoming Three Revolutions Policy Conference in Davis on March 18–19th, to be keynoted by Rep. Matsui.

The rapid evolution of transportation systems and technologies in recent years has created new legislative opportunities and needs, such as electric-vehicle incentives and automated-vehicle regulation. Congress is expected to address many of these in the near future. Ensuring that policymakers are aware of and understand key insights from research on emerging transportation topics will do much to facilitate the success of future policies. ITS-Davis, the Policy Institute, and numerous other institutes and centers at UC Davis are well-positioned to help on this front.

UC Davis is home to some of the world’s leading experts on transportation, energy, and climate. By taking the time to build ongoing relationships with policymakers working on issues in these areas, UC Davis is supporting development and deployment of successful solutions to some of society’s most pressing needs.

Kelly Fleming is an energy and transportation analyst for the UC Davis Policy Institute for Energy, Environment, and the Economy.

UC Davis joined leaders from around the world for the 2018 Global Climate Action Summit (GCAS) in San Francisco.

Occurring at the midpoint between the 2015 and 2020 UN Climate Change Conferences, the Summit revisited the challenges and opportunities to spur climate action. Governments, businesses, investors, academics, and activists came together to review progress on the historic Paris Agreement. California Gov. Jerry Brown set the stage by announcing California’s most ambitious climate targets to date: achieving carbon neutrality and 100% clean electricity by 2045.

The Summit was also an opportunity for UC Davis to display/demonstrate its status as a top source of independent, academic climate expertise. UC Davis is home to an impressive group of faculty collaborating on climate-change science, mitigation, adaptation, and resilience. This work is coordinated and amplified by a unique set of interdisciplinary hubs—including the Institute of Transportation Studies (ITS), the Energy and Efficiency Institute, and the John Muir Institute of the Environment—that collaborate to create one of the most engaged and sustainable campuses in the world. During the week of the Summit, UC Davis hosted five official affiliate events to leverage these resources and catalyze positive change.

The week kicked off on September 10 at the UC Davis Mondavi Center, where the UC Davis School of Veterinary Medicines One Health Institute and the California Department of Conservation co-organized a daylong symposium on “Managing Lands in a Changing Climate.” The symposium examined how to strengthen agricultural resilience, food security, and health in the face of climate change. Emphasis was placed on generating positive change through innovative land and resource management at the local, regional, and global levels.

On September 11 and 12 in downtown San Francisco, the Policy Institute for Energy, Environment, and the Economy (Policy Institute) hosted four half-day sessions, which drew more than 400 attendees. Each session challenged attendees to consider complex and critical issues related to climate, energy, transportation, and public policy: topics on which UC Davis is a leader. (Note: At the links below for each session, you can access session agendas and PDFs of speaker presentations.)

The first session, Climate-Resilient Communities, focused on practical, proactive steps that communities can take to be resilient to climate threats. Speakers included Andrew McAllister of the California Energy Commission, Jill Anderson of Southern California Edison, and Luis Carlos Romo from the State of Sonora, Mexico. Participants discussed solutions along three themes: (1) deriving cost-effective, energy-efficient solutions for historically “undercooled” communities; (2) deploying distributed energy resources to enable resource responsive energy infrastructure management; and (3) rebuilding communities already devastated by climate driven disasters.

The Harnessing the 3 Revolutions in Transportation for Climate Goals session highlighted how shared, automated, and electric vehicles–can help steer communities, states, and countries toward a low carbon future. California Assemblymember Phil Ting began the session with a vision for the 3 revolutions in California and beyond. Panelist Ethan Elkind, Director of the Climate Program and Center for Law, Energy & the Environment at UC Berkeley and UCLA Schools of Law, emphasized the need for autonomous, electric buses in dedicated lanes that could mimic light rail systems at lower cost and help address declining transit ridership. Ellen Greenberg of Caltrans added that “walkability, active mobility, sharing and transit are key for urban development and livable cities.” On the private-sector front, representatives from companies including Lyft, Uber, Zoox, Chariot, and Via commented on the potential for “new mobility” services to transform transportation for the better.

Oakland Mayor Libby Schaaf opened the Regional Transportation Policy Collaboration session. She described how the city is reducing its carbon footprint by implementing sustainability policies at its port and by providing clean (i.e., ultra-low sulfur) diesel for city fleets. The session explored ways in which state and local jurisdictions are working together to reduce emissions from the transportation sector. Models of international collaboration were also discussed.

At the final session, From Ambition to Action in Transportation, representatives from California and Germany discussed how to more effectively cut greenhouse gas emissions from their transportation sectors, which contribute 40% and 20% of emissions of each polity respectively. Panelist Gil Tal, director of the UC Davis Plug-in Hybrid & Electric Vehicle Research Center, noted that achieving sustainable transportation goals hinges on our ability to close the gap between research and policy.

The university was prominent in news coverage of the Summit and at other Summit events. UC Davis researchers were quoted in more than 50 media outlets, including NPR’s Marketplace, Reuters, and Capital Public Radio. Reflecting the visibility of UC Davis at GCAS, ITS-Davis ranked 10^th on the list of  the summit’s “Top Twitter Influencers,” joining the official Twitter accounts of Gov. Jerry Brown and the summit itself.

At the Summit’s China Pavilion, UC Davis China Center for Energy and Transportation (C-CET) Director Yunshi Wang and dignitaries from the respective countries jointly established the China-U.S.-Netherlands Zero Emissions Vehicle Policy Laboratory, with California and the ZEV states as parties. C-CET Director Wang also joined Governor Brown to announce plans for California and China to work together on fuel cells, zero emission vehicles, and other technologies to combat climate change. Giovanni Circella, ITS-Davis director of the Three Revolutions advanced mobility research program, spoke on a panel with Dutch representatives, where he discussed his research showing that ride-hailing is not yet supporting public transportation. Professor and ITS-Davis Director Dan Sperling provided remarks at official affiliate sessions sponsored by the Netherlands Consulate General, the European Commission of the European Union, the Energy Foundation of China, and China EV100.

UC Davis also sent a large delegation to the invitation-only Summit plenaries, including Dan Sperling, Policy Institute Director Austin Brown, 3 Revolutions Policy Director Mollie D’Agostino, and Policy Institute Researcher Hannah Safford.

Climate change is a difficult, major issue that cannot be solved by one event. But convenings like the Global Climate Action Summit—and the targeted affiliate events that accompany them—are essential for keeping up momentum. UC Davis participants were particularly appreciative of the platform the Summit provided to strengthen relationships with colleagues and partners also tackling climate problems. After all, as the Policy Institute’s Brown observed in advance of the Summit, “Working together is humanity’s superpower.”

 

While the global plug-in electric vehicle (PEV) market has been growing for several years, its continued expansion faces threats, caught up in potential trade wars and a roll back of favorable policies. Not only is the current U.S. administration threatening on-again-off-again tariffs on EU imports, source of many PEVs— it’s also proposing to stop planned increases in federal fuel efficiency standards and to thwart the ability of California and other states to enact regulations and incentives that have supported PEVs.

Until recent uncertainties, worldwide electric drive vehicle sales continued to accelerate. In 2017, the global PEV market [including battery and plug-in hybrid electric vehicles (EVs)] grew by 65%, hitting 1.2 million PEV sales.  During the first half of 2018, sales grew at an even faster pace. Total number of PEVs on the road in the world is over 3.5 million.

Most PEVs are being bought in several concentrated areas: Scandinavia, Southern Germany, Austria, western cities in the U.S., and eastern cities in China. The fastest growth is in China and Europe – the U.S. seems to be waiting for adoption of the Tesla Model 3 to ramp up.

Norway is the leader by a wide margin in market share, with 46% of all new car sales being PEVs. They’re followed by Iceland with 26%, and more distantly by Sweden with 7%. (Sweden aims to close the gap with Norway, so they’re adding a new tax scheme this July which should accelerate PEV sales).

Fastest growth? That would be Finland, with 144% market growth from last year. South Korea (+138%), Australia (+132%), Netherlands (+122%), Spain (+118%), and Canada (+114%) are following closely. China’s already-established market grew 113% from 2017, reinforcing its global leadership in total sales.

One especially exciting development is that the electric car market might be edging just a little bit closer to profitability. There were 100 models of PEVs on the market this year, most of which accounted for 2,000 to 11,000 vehicle sales per model in Quarter 1 – fairly standard production levels when automakers aren’t turning a profit. But the latest Leaf model had over 40,000 sales in first half of 2018 – if the Leaf reaches 100,000 by the end of 2018 (mass production), it probably means that Nissan is moving closer to clearing a profit with Leaf production.

The expectation is that by the end of 2018, the global PEV market will make up 3% of auto sales, and continue on its upward trajectory, with several vehicles dedicated for EV powertrains.

The PH&EV Research Center of ITS-Davis continues to watch the PEV market worldwide – collaborating with partners to try to understand what is moving the market in each region.  A May visit to Norway and Sweden led to more insights on their markets, and a meeting with our International EV Policy Council that focused on the role of incentives, infrastructure, and consumer awareness in EV adoption. We’ll be watching the impacts of changing regulations and tariffs through PEV sales, globally and here in California.

The rest of the world is on track for continued growth of the EV market. By keeping in place forward-facing policies, the U.S. also will remain plugged-in to the electric mobility future.

 

Tom Turrentine, Ph.D., is the Founding Director of the Plug-in Hybrid & Electric Vehicle Research Center of ITS-Davis

Kathryn Canepa has been an undergraduate research assistant with the Plug-In Hybrid & Electric Vehicle Research Center for two years.  She recently graduated with her Bachelor’s degree in Sustainable Environmental Design.

Why, you ask, would I conduct 42 interviews with planners, state agency staff, and non-profits working on transportation and city planning? I am a researcher at the Institute of Transportation Studies at UC Davis. I study the societal impacts of ridehailing services, like Uber and Lyft. Ridehailing is a hot topic, and the subject of much commentary from prominent transportation experts. It is the focus of the recent book that I co-authored with Dan Sperling, Three Revolutions: Steering Automated, Shared, and Electric Vehicles to a Better Future.

My main goal in conducting dozens of interviews was to get perspective on how to help communities maximize the benefits from all the ridehailing cars rolling around on their streets. The people I chose to interview are on the front lines during a revolutionary time in transportation, and understanding their diverse perspectives is key to developing research-based policies with real potential to win widespread support and generate positive impacts. At the end of the study I will step back and integrate the themes of these interviews, and report on trends and insights. Much like this blog, I will also share anecdotes along the way.

Interview Questions

I asked interviewees about their expectations of the impacts of ridehailing services. I asked about possible actions they could take, or are already taking to align ridehailing with their sustainable transportation goals. I also asked about who should be involved in policy development and implementation, and what they see as the biggest challenges to getting policies, programs or other actions in place.

Local Governments Want to Balance Statewide Guidance with Local Control

I am hearing that local governments want to retain control over the details of addressing the impacts of ridehailing in their jurisdictions. Many of those I spoke with value a coordinated statewide effort to set targets and provide a bird’s eye view to find best practices. But across the board, local government stakeholders want to be sure they can address ridehailing in a way that fits the needs of their unique areas. This is not surprising, and not the first time California would need to strike such a balance between local control and state coordination. For example, AB 32 and SB 375 set goals for greenhouse gas emissions reductions, but decisions about how to reach these goals are largely left to local jurisdictions. This approach makes sense; there is a huge variety among California communities.

As one interviewee pointed out, we must start thinking about dense urban areas of San Francisco as a unique case for Uber and Lyft, rather than representative of the experiences of communities across California. The challenges arising in San Francisco are relevant to other densely populated areas, but not all. Allocating right of way and curb space is a different ball game in less dense or rural parts of the state.

Impacts, and integration, with public transit will also look different in each region and city. Some California counties—Trinity County and Alpine County, for example—have barely more than 1,000 residents. Counties like these would embrace the increased presence of ridehailing services, as a means to expand public transportation, which often has limited coverage and hours of operation, as well as long wait times in these rural areas. Other parts of California are visited by huge numbers of tourists, with traffic patterns resulting not from commuters but from visitors to places like Lake Tahoe. Interviewees from these areas are looking for ways to alleviate challenges arising from increases in vacation home rentals like Airbnb. Ridehailing could encourage visitors to leave their cars at their vacation rentals, and serve as a collector through neighborhoods.

Policies and programs addressing ridehailing must be flexible enough to address the impacts occurring across the diversity of California communities, but specific enough to offer real guidance and targets.

Fees and Preferential Curb Access May be Effective, If Implemented Correctly

When I asked about specific policy approaches to align ridehailing with sustainable transportation goals, most interviewees were not in favor of a ridehailing tax, something recently introduced in Chicago. Additionally, a number of interviewees pointed out that policies involving pricing should target all single passenger vehicles, not just those involving ridehailing. Discussions also highlighted political and equity challenges associated with pricing strategies.

Attitudes towards policies related to the use of public curb space or right of way were more open. A number of creative approaches arose, including identifying strategic partners such as bars, night-clubs, and tourist attractions. The idea is for preferential multi-passenger – as opposed to single passenger – loading areas to prevent driving under the influence, or to allow multi-passenger travelers to avoid the trek from far away and congested parking areas in tourist destinations. Enforcement of preferential pickup/drop-off access for multi-passenger trips is the primary challenge noted by a number of interviewees.

On the surface, I heard disagreement about the potential ways ridehailing may integrate with, complement, or impact public transit. Some smaller and more rural areas embrace the potential for ridehailing services as a cost effective means to improve public transportation, though many are waiting to see the outcomes of existing pilot programs. Others cautioned that transit agencies must be flexible and willing to learn about future mobility. And a number of interviewees expressed concern about the loss of union transit jobs if ridehailing supplants public transit. Ridehailing is already blurring the lines with public transportation and policy addressing the relationship between new and existing services must enable transit agencies to modernize and take advantage of these services, while at the same time maintaining equity in service and employment practices.

Interviewees would also like to see policy development address the links between automated vehicles and ridehailing as well as information sharing and transparency about future technologies in order to be forward thinking. Again many interviews covered the need for state and federal leadership to address these issues, convene lessons learned and disseminate best practices.

Is Your City Testing the Waters or Jumping Right In?

Interviewees were split into three main groups in terms of their activities related to policy for sustainable transportation and ridehailing. A few spend very little time thinking about this topic, reporting that Uber and Lyft have not been in their area for long, do not provide a substantial level of mobility, or do not pose any challenges.

In the middle ground were stakeholders that are thinking and talking a lot about ridehailing, but taking a wait-and-see approach. Last, there were some interviewees who are already doing a lot to address these topics within their local jurisdiction— typically in larger metropolitan areas, or rural areas with a strong desire to improve public transportation.

What’s Next?

Policy making related to sustainable transportation and ridehailing is still in early stages. Pilots are testing some approaches and the policy dialogue continues. Local governments should advocate for local control but be willing to work within state level frameworks. State regulators should provide meaningful guidance and address the needs of California’s diverse stakeholders and communities.

This blog is based on current research being conducted by Susan Pike, a postdoctoral researcher at ITS-Davis. More information on the study can be found here.

This blog is co-written by Amy Myers Jaffe, the David M. Rubenstein Senior Fellow for Energy and the Environment and Director of the Program on Energy Security and Climate Change; and Joan Ogden, professor of environmental science and policy at UC Davis and director of the Sustainable Transportation Energy Pathways (STEPS) program at ITS-Davis.

It was originally published by the Council on Foreign Relations.

The United Kingdom is moving forward with a novel plan to lower carbon emissions in home heating by injecting low carbon hydrogen into the country’s natural gas grid. National Grid’s Cadent Gas and Northern Gas Networks, together with Keele University, have been studying how to safely add hydrogen (H2) to natural gas residential networks to clean up the country’s heating sector which constitutes a fifth of the U.K.’s total carbon emissions. The pilot, if successful, would put more teeth behind the idea of natural gas as a bridge to lower carbon substitutes.

However, there are many technical barriers to the practice that could be more than meets the eye. Hydrogen embrittles many of the steels used for natural gas pipelines, creating the potential for dangerous leaks. Some sections of the U.K. system already have advanced materials more suitable for hydrogen transport but adjusting end-use appliances to be hydrogen blend ready still needs to be done. The current hydrogen blending pilot will begin with safety work in 130 homes and businesses in a limited geography to convert appliances and avoid any dangerous leaks. Recent U.S. studies suggest that transporting a hydrogen-natural gas blend over an existing natural gas pipeline network safely is technically possible at levels between 5 to 15 percent hydrogen by volume, assuming the system in question is in top notch maintenance with no potentially dangerous cracks or leaks. Current European regulations allow between 0.1–12 percent hydrogen in natural gas lines. All analyses stress the critical importance of a case by case assessment before introducing hydrogen into a natural gas system. Officials are saying the U.K. system can specifically accommodate 20 percent given its history and materials. For residential use, U.K. officials believe some six million tons of carbon could be saved if the program could extend across the country.

But blending does not necessarily enable major reductions in greenhouse gas (GHG) emissions in transport applications, unless the “green” hydrogen—that is hydrogen produced from renewable sources as opposed to chemically “reformed” from methane—can be separated from the blend and then delivered to a highly efficient fuel cell vehicle. At this juncture, our newly published survey article of the latest science shows that costs to do so are currently prohibitive. Blending into existing networks ultimately limits the scale of possible H2 fuel adoption, because of the technical constraints on the allowed hydrogen fraction. For these reasons, locations such as Germany or California that intend to make a large H2 fueling push for automobiles are likely to build out separate networks, rather than relying on upgrading existing natural gas distribution systems.

Natural gas is already in wide use as a fuel for fleet vehicles, medium-duty work trucks, and short haul drayage trucks. Liquefied natural gas (LNG) is increasingly being used in long haul freight applications. By contrast, hydrogen fuel cell vehicles are just beginning to be adopted in some early adopter regional settings, mainly for light-duty passenger applications. About 5,500 hydrogen cars are on the road today. Interest in using hydrogen fuel cells for zero emission medium- and heavy-duty transport is also growing. A few dozen hydrogen fuel cell buses and work trucks are being demonstrated.

California policy makers were hoping synergies between natural gas fueling infrastructure and hydrogen could ease transition costs of shifting to hydrogen to get deep cuts in transport related GHG emissions. But our work suggests that biogas could be a better fit in the coming years. We find that it is not going to be commercially rewarding to re-purpose or overbuild natural gas fueling station equipment and storage for future hydrogen use. Ultimately, a dedicated renewable hydrogen system would be needed for hydrogen to play a major role in reducing transport-related GHG emissions. In the meantime, California is investigating the benefits of greening its current truck fleets by blending cleaned up bio-methane, so called renewable natural gas, into the natural gas fueling system in the state. Injection of landfill gas would be one of the more commercial and productive alternatives, for example. However, the bio-methane resource is smaller than the future potential of hydrogen manufacturing, which has led California to continue to promote a pilot for hydrogen fuel cell vehicles and infrastructure in select markets such as Los Angeles, as one of the central pillars in its strategy toward a zero-emissions, low carbon future.

For a related paper by the authors, published in Energy Policy, click here.

 

In 2017, several automakers and policymakers announced commitments to a transition to electric vehicles:

• Toyota set a goal to sell more than 1 million electric vehicles by 2030; Volvo aims to beat Toyota by doing the same by 2025;
• VW’s goal is 25% of its vehicle sales will be electric by 2025; BMW’s goal for that year is 15% to 25%;
• Mercedes-Benz has allocated $11 billion and Volkswagen group around $40 billion dollars to the development of electric vehicles;
• Norway has called for all new cars sold there to be electric by 2025; France, the United Kingdom, and the State of California aim to achieve the same by 2040; and
• China has set a goal for 20% of new car sales to be electric by 2025.

Meanwhile actual sales are tiny. A total of 780,000 on-road PEVs have been sold in the U.S., representing just 0.3% of the 243 million passenger cars and light-duty trucks on the road. [PEVs include both plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs)]. In California, less than one percent are PEVs. PEVs accounted for only 1.1% of U.S. vehicle sales in 2017 and were on track to be less than 5% of sales even in California. Many of these are repeat sales to the same households, so an even smaller percent of households are adopting and experiencing these vehicles. And all this with years of purchase incentives, building of charging stations, and outspoken championing of PEVs by California government leaders.

There are no paths to meet the PEV commitments and promises being made by automakers and politicians unless consumers are engaged in the transition to electric drive. Evidence from California says consumers are not. The excitement among policymakers, automakers, and advocates as more PEV models enter the market place, more charging is installed, and more PEVs are sold each successive year is utterly lost on the vast majority of the car-buying public—even in California, touted as being among the global PEV market leaders. The problem is the number of car owning households that are paying attention to PEVs is not growing.

Research at the Plug-in Hybrid & Electric Vehicle Research Center of the UC Davis Institute of Transportation Studies indicates few car-owning households are aware of a transition to PEVs and far fewer are actively engaged. Five surveys conducted from June 2014 to June 2017 assessed Californian car-owning households’ awareness of and engagement with PEVs.

The percent of car-owning households who had already considered a PEV at the time they completed their questionnaire is no higher in 2017 than it was in 2014. The figure below shows the degree to which consumers in California had considered a BEV (2014) or a BEV or PHEV (2017) for their household. In 2014, barely 5% already owned a BEV or had actively shopped for one. About another 13% said they had gathered some information about BEVs but were not seriously considering one. If one believes a transition to electric drive is well underway, then the percentages of households at these higher degrees of consideration should be larger in 2017—especially as the 2017 data includes both BEVs and PHEVs. They are not higher to any significant degree.

According to the California Energy Commission, there were approximately 5,700 non-residential PEV chargers installed in California in August 2014; this more than doubled to over 11,500 by August 2017.

By and large, Californians didn’t notice the increase in PEV charging infrastructure. The figure below shows the distributions of how many people report seeing PEV chargers in the parking facilities they use. The doubling of away-from-home PEV charging infrastructure barely registers in the percent of California drivers sighting that infrastructure. In fact, the increases from 2014 to 2017 are so small that the statistically defensible conclusion is they are not different. That’s the good news.

Further, we ask households to rate their agreement with the statement “There are enough places to charge electric vehicles” on a scale of strongly disagree (-3) to strongly agree (+3). The mean scores for 2014 (-0.68) and 2017 (-0.61) are not statistically different; both indicate on average slight disagreement there is enough PEV charging. Again, that’s the good news.

The bad news? Despite more than doubling the number of away from home PEV chargers from 2014 to 2017, the percentage of California households who registered the strongest disagreement with the statement, “There are enough places to charge electric vehicles”—that is, the percentage of people who scored the statement as -3—nearly doubled from 13% in 2014 to 23% in 2017.

What about the increasing number of makes and models of PEVs offered for sale between 2014 and 2017? According the California Air Resources Board’s Drive Clean website, this nearly doubled, too between 2014 and 2017. In 2017, fewer Californian’s were able to name a PEV for sale than had been able to in 2014. Awareness of incentives? Not higher in 2017 than in 2014. Percentage of car-owners that understand how hybrid, PHEV, and BEVs vehicles are fuelled? Not higher.

Californians are not deciding they don’t want PEVs. Rather, they remain to a great extent unaware of PEVs and anything about them. California households by the millions are simply not engaged in any transition to PEVs. Anyone serious about instigating a sustained transition of road transport to electric drive should undertake several science-based actions:

• Market the electric-drive transition: Social marketing to promote the need for and value of a transition to electric drive automobiles
• Market electric-drive vehicles and supporting services: Traditional marketing by automakers, electricity providers, and charging infrastructure suppliers of their products and services
• Create connections: Social media activities connecting people of similar motivations to own and drive PEVs
• Create real PEV experience: Ride and drive events and the use of PEVs in shared mobility and vehicle rental applications
• Create virtual PEV experience: Enhanced and customized information and virtual PEV experiences through websites and mobile apps
• Engage the whole sales chain: Automobile dealer education and motivation programs
• Measure to manage: Ongoing tracking of the impact of these activities on consumers and PEV sales

Dr. Ken Kurani is an associate researcher and Dr. Scott Hardman is a postdoctoral researcher at the Plug-in Hybrid & Electric Vehicle Research Center at ITS-Davis.

The transportation world is moving towards an electric future. More EVs are available than ever before. Leading global automakers are pledging to transition to cleaner electric fleets. Entire countries are planning to phase out fossil-fuel vehicles, thereby lowering harmful emissions that are detrimental to human health.

The United States is currently a leader in EV technology and innovation, thanks in part to the federal tax credit that has helped bridge the gap in cost between plug-in vehicles and their conventional gas-powered counterparts. Our research shows that these incentives play a key role in building the EV market—by creating policy certainty for automakers as well as encouraging the purchase of EVs.

Overview of the tax credit

The Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007 created a federal tax credit for EVs to serve as a purchase incentive. The credit applies to all plug-in vehicles (PEVs), including plug-in hybrid vehicles (PHEVs) and “pure” battery electric vehicles (BEVs) with a minimum battery size of 4kWh (which is met by all personal vehicles available to consumers. The amount of the credit depends on the vehicle size and battery capacity. Long-range PHEVs and all available BEVs receive the maximum credit of $7,500, while shorter range PHEVs receive $2,500 or an intermediate amount. More than twenty states also provide some form of purchase incentive, generally at significantly less value than the federal credit.

The credits are designed to support the EV market until it becomes self-sustaining. This is a strategy that has worked in the past: telecommunications, aerospace, computers, and pharmaceuticals are examples of new market sectors that launched and flourished thanks to early government support. As companies bring EVs to market, manufacturing costs will drop. Indeed, manufacturing costs of batteries and EVs have fallen dramatically already. Because EV fuel and maintenance costs are very low, providing government assistance to help offset initially high upfront costs is key to ensuring consumer access to EVs.

The federal EV tax credit is strategically designed to avoid wasting taxpayer money on mature businesses that do not need extra support. The total number of rebates provided to a given EV manufacturer phases out after that manufacturer reaches 200,000 qualifying sales. The credit remains available for other manufacturers to encourage latecomers to enter the market. The first wave of EV manufacturers—such as General Motors and Tesla —will hit the 200,000 sales mark in 2018 leading to a phase-out of federal assistance for their vehicles. However, many other automakers are just entering the EV market in a serious way now. If the tax credit vanishes, this momentum may too.

The impact on the EV market

Research shows that the federal EV tax credit is having a real and positive impact on the EV market. Surveys conducted by the Institute of Transportation Studies at University of California, Davis (ITS-Davis) show that nearly 30% of consumers who bought EVs in early markets cited the EV credit as a factor that influenced their purchasing decisions. The availability of the credit had much less influence on (presumably less price-sensitive) buyers of the more expensive Tesla Model S. Almost half of Nissan Leaf buyers and 40% of Chevrolet Volt buyers said that they would not have purchased their cars without the credit incentive. This finding was validated by a systematic literature review released by ITS-Davis in 2017. 32 out of the 35 studies examined in the review identified clear relationships between financial purchase incentives and the sales of PEVs in the U.S. and around the world. The review also found that removing incentives too early could negatively impact EV markets. In 2015, for instance, the Netherlands decided to focus their incentive on only all-electric vehicles, removing support for plug-in hybrids. Plug-in hybrid sales dropped precipitously the following year.

Closer to home, we can look at what happened to electric vehicle sales in the state of Georgia. When the state purchase rebate was removed at the end of 2015, the federal tax credit remained as the only EV purchasing incentive. This was not enough to sustain the budding EV market, and sales plummeted as a result.

The Netherlands effectively forced a switch to all-electric vehicles for buyers who were influenced by the incentive. In Georgia, unfortunately, EV sales dropped and shifted back to conventional vehicles.

Need for stable, research-informed policy

Automakers rely on predictability in the regulations that govern their sales, whether those are fuel-economy standards, zero-emission vehicle targets, or purchase incentives to help launch new promising technologies. Automaker plans for upcoming plug-in vehicle models were based on an expectation that the federal tax credit would remain in place for the first 200,000 PEV sales from each manufacturer. With this in mind, they have plans to introduce dozens of new and updated models to the market in the next 3–5 years, including nearly 10 new and second-generation releases in 2017 alone. Canceling the credit will have disproportional effect on companies who sell most of their electric cars in the U.S. market. In 2012, half of EV sales were in the U.S. But the rapid development of other markets has reduced the U.S. share today to less than 20% and next year it probably will be half of that.

Removing the federal credit will reduce the ability of domestic car companies to compete in this global market.

There are certainly ways that EV incentives could be improved. Because incentives are less important to wealthy buyers of expensive vehicles, and to improve access to EVs across income groups, some states are considering capping rebates based on purchaser income or vehicle manufacturer’s suggested retail price (MSRP). Research also shows that full electric vehicles have higher benefits to the environment and should receive higher incentives. Some studies show that point of sale rebates are more effective at incentivizing sales than tax credits. There have also been proposals to provide some incentives to car dealers, who are generally less familiar with EVs and may be less inclined to sell EVs than conventional vehicles, which bring in more recurring revenue from maintenance.

We should debate the best and most cost-effective incentives to support the domestic automotive industry and the development of the EV market. What is certain, is that incentives are hugely important. The federal EV tax credit could certainly be improved, but incentives are clearly needed. Our nation’s health and highways will benefit from a growing number of cleaner vehicles that are within reach of all American consumers.

Gil Tal is a researcher at the Plug-in Hybrid & Electric Vehicle Research Center of ITS-Davis and graduate advisor for the UC Davis Transportation and Technology Graduate Group.

Austin Brown is executive director of the UC Davis Policy Institute for Energy, Environment, and the Economy.

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