A new study from the University of Toronto suggests that the large-scale adoption of electric vehicles (EVs) and the rollout of renewable electricity generation could lead to health benefits worth as much as $188 billion by 2050.
For this, the Department of Civil & Mineral Engineering team used computer simulations, which showed that just the electrification of the US vehicles and less aggressive grid decarbonization could provide significant population-level health benefits in the range of tens of billions of dollars.
According to study co-author Professor Marianne Hatzopoulou, when studying the impact of EVs, researchers have typically focused on climate change in terms of mitigating CO2 emissions, but that’s not the extent of pollution caused by an internal combustion vehicle.
In addition to CO2, these conventional vehicles also “produce many air pollutants that have a significant, quantifiable impact on public health,” which Hatzopoulou noted “are disproportionately felt by populations that are low-income, racialized or marginalized.”
Back in 2020, the members of this team used their expertise in life cycle assessment to build computer models to simulate the impact of large-scale EV adoption in the US market.
The team chose the US as their test market because of its high rates of ownership and travel per capita, as well as the availability of large, heavy vehicles and high-quality data.
To estimate how many EVs would be needed to keep the increase in global average temperatures under 2 degrees Celsius above pre-industrial levels by 2100, the team created a novel method to convert this target into a carbon budget for passenger vehicles in the US. Then, it determined the number of EVs required to stay within that budget, which came “out to be a lot.”
The modeled scenarios gave the team 350 million EVs that must be on the US road by 2050 to meet the target emissions reductions.
This number is about 90% of the total vehicles estimated to be in operation at that time, while the total proportion of EVs on the road at the time of study was about 0.3%. The research stated:
“It’s true that sales are growing fast, but even the most optimistic projections suggest that by 2050, the US fleet will only be at about 50% EVs.”
When it comes to barriers to this adoption, the study points to consumer preferences for EV deployment, challenges related to the supply of critical materials like cobalt, lithium, and manganese for batteries, and the strain on the country’s electricity infrastructure. The paper stated an annual increase of 1,730 TWh in electricity demand, which would require massive investment in infrastructure and new power plants.
The study concluded that 90% EV ownership by 2050 is an unrealistic scenario and recommended massive investment in public transit, higher housing density, and city redesign to allow for active transportation.
“EVs really do reduce emissions, but they don’t get us out of having to do the things we already know we need to do. We need to rethink our behaviors, the design of our cities, and even aspects of our culture. Everybody has to take responsibility for this.”
– Professor Heather MacLean
Widespread EV Adoption can Improve Human Health
After calculating the number of EVs required to meet mitigation targets, the U of T Engineering team studied the health benefits of light-duty vehicle electrification.
Published in PNAS this month, the latest study proposes a unique perspective in quantifying the air quality-related health impacts of the US adopting EVs between 2022 and 2050.
The thing is, EVs, in itself, do not generate any tailpipe emissions, but that doesn’t mean they aren’t responsible for air pollution. EVs still need power, and if the power plants that supply them run on fossil fuels such as natural gas or coal, then they are responsible.
So, the team adapted their model to simulate the production of air pollutants, including sulfur oxides (SOx), nitrogen oxides (NOx), and PM2.5—small particles 2.5 micrometers or less in diameter that can contain organic chemicals, dust, soot, and metals.
Unlike CO2, which persists for decades and is well-mixed in the atmosphere, these pollutants and their health impacts are more localized.
“It matters not only how much we are emitting but also where we emit them.”
– Professor Daniel Posen
So, modeling CO2 and modeling these pollutants are two very different things.
Also, air pollution from the power grid and internal combustion vehicles is not expected to stay constant over time.
For instance, the gasoline-powered cars that we have today generate significantly less pollution than those built two decades ago but are still running on the road. Similarly, the power grid continues to get greener. So, all these factors need to be taken into account.
The team, as such, chose two main scenarios for the model to simulate. In one scenario, no more EVs will be built, but older internal combustion vehicles will continue to be replaced with more efficient ones. In the other scenario, all new vehicles sold by 2035 are assumed to be electric.
While the second scenario seems “aggressive,” many governments around the world have already gone all-in on EVs, with the likes of Norway, The Netherlands, France, and Canada planning to eliminate sales of new internal combustion vehicles in the coming decade.
For both scenarios, the researchers also considered different rates of electric grid transition to renewable energy sources. This rate included slowing down, accelerating, or staying roughly the same as the current till 2050.
For each of these conditions, the levels of air pollution were then simulated across the US. They then correlated these pollution levels with statistical estimates of economic value and the number of years of life lost.
“Our simulation shows that the cumulative public health benefits of large-scale EV adoption between now and 2050 could run into the hundreds of billions of dollars…. if the grid continues to get greener.”
– Posen
While the world is already transitioning away from fossil fuel power generation, the team also modeled the grid freezing in its current state. He added:
“In that case, we’d actually be better off simply replacing our old internal combustion vehicles with new ones — but again, this is not a very realistic scenario.”
Now, that question is what should be the priority, adopting EVs to decarbonize the transportation sector or decarbonizing the power generation sector, which is the source of EV pollution.
To this, Hatzopoulou said:
“It’s important to remember that the vehicles being sold today will continue to be used for decades.”
What it means is that we must first adopt EVs because continuing to buy more internal combustion, no matter how efficient, locks us into those tailpipe emissions for years to come, which will further spread that pollution everywhere.
However, the power generation system should be decarbonized at the same time and not wait for more EVs to first get on the road.
“We need to start on the path to a healthier future today.”
– Hatzopoulou
Quantifying the Benefits of EVs on Public Health
EVs have been gaining a lot of traction these past few years, emerging as a powerful means to tackle the problem of air pollution.
This makes sense, given that air pollution contributes to one in ten deaths globally and causes 8.43 million premature deaths annually. It also shortens life expectancy by more than 2 years. According to WHO, air pollution is the largest environmental threat to human health worldwide.
This threat is largely attributable to the transportation industry. In the US, the sector accounts for about 29% of all greenhouse gas (GHG) emissions and, as such, has been the focal point for strategies aimed at mitigating climate change.
Among the solutions, EVs, which generate zero tailpipe emissions, offer significant promise in reducing both GHG emissions and air pollution. According to the US Department of Energy, compared to 5,186 kg of carbon emission created by gas-powered vehicles, EVs only produce 1,783 kg.
So, a study from earlier this year went on to examine the benefits of full electrification (FullE) in four US cities — New York, Chicago, Houston, and Los Angeles. These cities feature dense populations, high traffic volume, and poor air quality that doesn’t meet the Environmental Protection Agency’s standards.
The research found that the FullE scenario led to PM2.5 reduction peaking at 0.34 and 2.29 μg.m−3, along with marked reductions in both NOx and ozone concentrations.
From a health perspective, a FullE scenario could potentially prevent 796, 328, and 157 premature deaths per month in New York, Chicago, and Houston, respectively. Economically, the health benefits are projected to range between $51 mln and $249 million per day.
However, in Los Angeles, full electrification can actually increase mortality due to higher PM2.5 and ozone levels, while a 29% EV share for light-duty vehicles can save 104 lives each month. This is because of the city’s complex atmospheric chemistry and unique geographical and meteorological conditions, and as such, calls for “region-specific environmental regulations.”
Another study, which investigated the health benefits of these vehicles in Shanghai, China, noted that some regions may derive more benefits from large-scale adoption of EVs, which is very costly, than others. As such, it recommended policymakers design incentives based on regional characteristics.
A megacity like Shanghai typically suffers from worse air quality and a larger population is exposed to emissions from vehicles.
So, the study evaluated the climate and health benefits of replacing gasoline vehicles, which emit fine particulate matter, NOx, and volatile organic compounds, with battery-powered EVs that contribute to NOx and SO2 emissions from power plants.
It found that each EV in China’s biggest city generates $6400 in health and climate benefits. Additionally, the health impacts of EVs were about 20 times lower than those of the average ICEV, with larger benefits achieved by replacing older ICEVs, amounting to $8900 per vehicle.
Vehicle electrification, however, not only reduces greenhouse gas emissions and improves air quality but has also been found to lower the mortality rate associated with exposure to toxic air pollutants.
Inhaling fine particulate matter emitted by ICE vehicles can lead to an increased risk of cardiovascular diseases, including heart attacks. For children, exposure to air pollution can cause a lifetime of healthcare problems. Meanwhile, in pregnant women, it can result in an increased risk of complications and low birth weight. Research suggests that air pollution also contributes to attention-related disorders.
Given the adverse effects of air pollution on human health, especially the young population, the American Lung Association studied the impact of EVs on saving lives.
“Air pollution and climate change are putting children at risk today. The impacts of climate change continue to intensify, and that will just add to the risks that children in the United States face as they’re growing up.”
– Will Barrett, the report author and association’s Senior Director of Advocacy for Clean Air
To improve the health of people, the report suggested all new car purchases be zero-emission options and the nation’s electric grid switch to clean and renewable energy by 2035.
As per the group, these zero-emission vehicles would create over $1.2 trillion in health benefits for the country by 2050.
The Current State of the EV Market
With all these benefits of vehicle electrification, where exactly do we stand at EV adoption? Well, a report from the International Energy Agency states that electric car sales reached almost 14 million in 2023, an increase of 3.5 million from the previous year and a whopping 6x higher than in 2018.
In 2023, electric cars accounted for about 18% of all cars, a 4% increase from 2022. Just five years ago, they made up for a mere 2%, highlighting the massive adoption of EVs. Among electric cars, 70% are battery-powered. These figures bring the total number of EVs on the roads to 40 million.
While EV adoption is happening globally, it is significantly concentrated in just a few major markets, with China in the lead.
Almost 60% (8.1 million) of all new electric car registrations were in China. Remarkably, 2023 was the first year in over a decade where China’s New Energy Vehicle (NEV) industry had no support from national subsidies for EV purchases. However, tax exemption, non-financial support, and some province-led investment remained in place. Last year, China also exported more than 4 million, 1.2 million of which were EVs, making it the largest auto exporter in the world.
China is followed by Europe at 25% and then the US at 10% (1.4 million). Together, these regions account for nearly 95% of global electric car sales. This growth continues in 2024, with China already selling 1.9 million electric cars in Q1 2024 compared to 350,000 in the US.
While electric car sales in emerging markets and developing economies have increased, they remained low overall, and EVs are still rare across Africa, Eurasia, and the Middle East.
According to IEA, the ongoing transition to electric mobility depends on affordable EVs. And besides technological development, competition is a big factor that can drive down costs.
“People are ready to fight against climate change and drive EVs, but not at any cost,” noted Serge Gachot, director of the Paris Motor Show, which was held this month and saw EV manufacturers from the US, China, and Europe showcasing their latest models.
Data from JATO shows the average retail price of a battery EV in China was under $34K in the first half of 2023 compared to about $72K in Europe and $74K in the US.
China is able to capture the EV market thanks to its cutting-edge technology and high-quality vehicles at more competitive prices. In response to China’s dominance in the EV market, Europe and Canada are currently considering imposing tariffs to boost their local EV industries.
Now, if we look at the prominent names in the EV sector, then the likes of NIO , Li Auto (LI +3.29%), Lucid Group (LCID +2.35%), Rivian Automotive (RIVN +4.59%), and Stellantis N.V. (STLA +1.63%) are among the key players.
China’s BYD, however, is currently leading the global EV industry. The company, which produces EVs, batteries, and energy solutions, is rapidly expanding its market share in both domestic and international markets. BYD sold 1,134,892 vehicles in Q3 compared to 986,720 in Q2.
As of writing, the $123.5bln market cap company’s shares are trading at $36.86, up 33.16% YTD, while having an EPS (TTM) of 1.55 and a P/E (TTM) of 23.84.
Then there’s Elon Musk’s Tesla, Inc. (TSLA -0.4%), which produces a range of EVs, including the Model S, Model 3, Model X, and Model Y. In Q3, Tesla delivered 462,890 EVs, up from 433,956 in Q2. Its 2Q24 revenue came in at $25.5 bln with $890 million in regulatory credits.
At the time of writing, the $703.85bln market cap company’s shares are trading at $217.80, down 11.18% YTD while having an EPS (TTM) of 3.56 and a P/E (TTM) of 62.04.
Conclusion
Studies show that electric vehicles present undeniable benefits for both the environment and public health. However, their widespread adoption comes with significant challenges. In order to harness their full potential, we must not only electrify the vehicle fleets but also decarbonize the power grid. Overall, the adoption of EVs must be complemented by broader societal changes in how we travel, live, and generate energy.
Click here for a list of top EV stocks to invest in.
