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Economic and Air Quality Benefits of Electric Cars in Nevada

Electric cars (ECs) help create jobs and provide economic and air quality benefits to 

Clark and Washoe Counties and the state of Nevada overall. To maximize these 

potential benefits for all Nevada residents, the state should consider the adoption of policies that overcome barriers to greater numbers of people acquiring them.

EVs provide economic benefits to the state by reducing fuel costs and shifting consumption 

away from imported oil to more locally produced electricity sources. These fuel savings 

become additional disposable income that will be spent mostly in the local economy, 

creating additional jobs in the state. At higher levels of market penetration, the fuel savings 

from EVs could produce thousands of jobs in Nevada in future years.

EV drivers can expect to save between $1,000 and $1,300 annually on fuel costs, totaling 

between $11,600 and $17,100 over the life of the car, depending on the price of 

gasoline. The total economic benefit to the state of Nevada in reduced fuel costs could reach 138 million $per year by 2030.

The analysis in this report shows that, in Clark and Washoe Counties, EVs will improve air 

quality by reducing emissions of criteria pollutants compared to comparable gasoline-

fueled car. In Washoe County, EVs will reduce levels of all pollutants compared to 

gasoline vehicles by 2015. In Clark County, EVs provide reductions of every pollutant 

except SO2. By 2020, despite the new federal Tier III tailpipe emissions standards, EVs will 

continue to emit fewer pollutants than new gasoline vehicles in both counties. The reduction of all these pollutants provides public health benefits to the region by reducing respiratory 

ailments, especially in vulnerable populations such as children and the elderly.

Because of the substantial economic and air quality benefits, SWEEP recommends that 

the state of Nevada takes more action to spur the adoption of EVs.

 Important policies the state could adopt to promote EVs include:

  •  Rebates for the purchase or lease of an EV or the installation of a public charging 

Station.

  •  Allowing charging station owners to resell electricity to EV drivers.
  •  Expanded use of performance contracting to purchase EVs for government fleets.
  •  A statewide charging station funding source (tied to EV registration fees). 
  •  A registration fee that ensures EVs pay their fair share of roadway maintenance 

costs.

A suite of other policies that other southwestern state governments have implemented to 

support ECs can be found in the report, Policies to Promote Electric Vehicles in the southwest.

INTRODUCTION

There are currently 17 light-duty electric cars (ECS), including plug-in hybrid electric vehicles (PHEVs), available in the United States from large-scale vehicle manufacturers, with more models expected in the coming years.

1 With so many diverse models available over the next few years, electric cars have the potential to play an important part in the transportation future of Nevada. 

The benefits of EVs compared to gasoline-fueled cars include the following:

 Greater efficiency: Compared to gasoline-powered internal combustion engines, electric 

vehicles can travel the same distance using approximately 24% less energy.2

 Locally produced energy source: Almost all of the petroleum and refined gasoline used in 

Nevada is imported, while electricity can be produced using clean energy resources that are 

abundant in the state, such as solar and geothermal. 

 Reduced emissions: EVs have the potential to reduce greatly harmful tailpipe emissions 

compared to gasoline-powered vehicles.

 Reduced fuel cost: Because of their higher efficiency and the low cost of electricity 

compared to gasoline per unit of energy, EV owners pay the equivalent of $0.60 per gallon 

to drive their ECs.

Furthermore, the energy and environmental benefits of electric vehicles are expected to increase as older power plants are retired and additional natural gas and renewable generation are constructed. 

Clark and Washoe Counties face air quality challenges, and light-duty vehicle emissions are a significant source of pollutants that contribute to this problem. Supporting widespread adoption of electric vehicles is an important strategy for improving air quality in the state.

ECONOMIC BENEFITS FROM ELECTRIC Cars

Job Creation Benefits

Nevada does not produce any oil and must import all its vehicle fuel from outside the state, 

meaning that almost all of the money spent on fuel—over $5 billion annually—will leave the state’s economy. The money saved from EVs’ reduced fuel costs will result in consumers spending less disposable income on imported energy and more on local goods and services.

Producing and supplying energy is one of the least employment-intensive sectors of the economy, so shifting expenditures away from this sector and towards local goods and services will create more local jobs. An additional dollar of household spending will create 16 times more jobs than if that dollar were spent on fossil fuels.7 The jobs created by this additional spending are spread throughout the economy, not focused on the vehicle or alternative fuel sectors; therefore, all income levels will benefit from the fuel savings benefits from electric vehicles. 

Without the development of a detailed model based on regional and statewide data that could predict the employment benefits of EVs, it is not possible to provide precise estimates of this impact. However, one methodology provides an approximate estimate of the scale of employment benefits offered by EV fuel savings in Nevada.

In 2012, Dr. David Roland-Holst, an economist at the University of California, Berkeley, analyzed the economic and job creation impact of two EV market penetration scenarios for California.8 While the study focused on the impact of EV fuel savings in the California economy and the results may not be directly applicable to Nevada, the general scale of the economic and employment impacts should be applicable. 

This analysis found that, if EVs comprise 15.4 percent of new vehicle sales by 2030, then nearly 50000 additional jobs would be created in California from the fuel savings (compared to a baseline scenario). Allowing for less aggressive market penetration in Nevada and for the smaller number of vehicles in the state, we scaled down the equation to give an estimate of how many jobs could be created by the fuel savings from EVs.

Individual Vehicle and Economy-Wide Fuel Savings benefits over the lifetime of the vehicle, higher upfront costs for EVs will be more than offset by significantly lower fuel costs than gasoline vehicles, bringing economic benefits to their owners that will, in turn, provide an economic benefit to the state. We analyzed the economic benefits of EVs based on two forecasts for the price of gasoline developed by the EIA: The Reference Case and the High Oil Price case.10 The average price of electricity per kWh for Nevada customers taking advantage of NV Energy’s electric vehicle rate is estimated at $0.053 per kWh.11 The average rates were increased based on EIA’s projected increase in electricity prices for the Mountain region.

Economic benefits for three types of EVs: a Toyota Prius Plug-in Hybrid (PHEV) with an electric range of 10 miles, a Chevrolet Volt extended-range PHEV with an electric range of 40 miles, and a fully electric Nissan Leaf with a range of 70 miles. Specific benefits estimated here include the incremental cost (minus the federal tax credit), the payback period, the lifetime fuel cost savings (total fuel savings minus the incremental cost), and the average annual savings for each vehicle in both the reference and high energy cost scenarios.

Applying the same three market penetration scenarios described above in the job creation section, the economic impacts of the entire economy are estimated in Table 2, which shows that the adoption of EVs in Nevada has the potential to provide between $18 million and $138 million in annual economic benefits to Nevada in 2030.

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