The Future of Alternative Vehicles and Fuel Sources

Businesses in the energy industry across the United States are brainstorming new ways to provide clean energy fuel sources for their customers. As the impending crisis of climate change is heavy on everyone’s mind, alternative energy, including fuels and vehicles, are key areas to reducing our carbon footprint.

The Alliance for Automotive Innovation states businesses and their suppliers are set to invest more than $250 billion in electrification by 2023. Additionally, the current Biden administration is proposing an additional 40% increase to sustainable transportation R&D activities at the Department of Energy for FY22.

Below, industry experts speak about the importance of alternative vehicles and fuels in reference to the consumer, keeping a hybrid approach, and having tax credits available.

The Adoption of Electric Vehicles Is Up to the Consumer, Experts Say

As administrators and industry leaders move toward electric vehicles (EVs), the affordability and accessibility of these vehicles must be reviewed. This is partly because many Americans may not trust that electric vehicles will be able to cater to their needs.

“Ultimately the success of electric vehicles all comes back to the consumer and the adoption and the willingness to go electric,” Julia Rege, VP of energy and environment at Alliance for Automotive Innovation explained. “If you take it from a consumer perspective, all of those elements really fit into a single term of convenience parity.”

“We're really focused on making sure we have enough available and low-cost charging to infrastructure that helps address range anxiety, and [making] sure that customers know they can go where they need to go in their electric vehicle,” Rege continued.

“We really need to make this more affordable by reducing the cost of EV batteries, reducing the use of critical materials, and by recycling batteries,” said Kelly Speakes-Backman, acting assistant secretary for EERE, Department of Energy. “We believe that EVs can reach cost parity with gasoline cars by 2028.”

Industry Experts Agree a Hybrid Approach Is Still in the Imminent Future

Even with the creation of alternative energy sources, some technologies aren’t widely available. For Tom Jensen, SVP of Transportation Policy at UPS, this means creating a hybrid model to help mitigate climate change.

“[UPS is] in the ‘all of the above’ kind of category,” he explained. “We anticipate utilizing internal combustion engines for 20 years, so we're not going to go electric tomorrow. We can't get the vehicles. UPS has a backorder for 10,000 final-mile delivery vehicles from a U.K. company called Arrival. We also have the single largest order placed for the Tesla tractor-trailer and that is behind schedule as well.”

“Worldwide, we've got 10,500 alternative fuel vehicles, and it's everything from compressed natural gas, to liquified natural gas, to hybrid electric, to electric propane, to hydraulic hybrid,” he added.

Ann Oglesby, VP of Energy Research and Innovation at Phillips 66, agreed that the need for conventional fuels is still a part of the fight to reduce carbon emissions.

“There's no silver bullet: innovation and cooperation are the key,” she said. “We're working to make conventional crude oil and natural gas-based energy value chains even more sustainable.”

Tax Credits and Grants Are Key to Increasing Alternative Fuel Sources

Experts noted the importance of available tax credits for electric vehicles and aviation sectors to push for alternative fuel sources.

“Tax policy can be a strong catalyst in this area,” said Jensen. “[Bundled tax credits are] something we should make permanent.”

Oglesby noted that tax credits towards various production pathways could incentivize the development of, “the various production methodologies for sustainable aviation fuel.”

Jensen warned that without tax policies, there may be a hit to small businesses: “If we don't incense and move via a tax policy, as well as legitimate infrastructure investments into these new technologies, it's going to be a very, very slow and rocky transition for the small business.”