If you’ve stepped outside in the past couple months, chances are you’ve felt like a melting scoop of ice cream more than any other summer. Well, it is no coincidence that the global land-only surface temperature for June 2021 was the highest on record according to NOAA’s National Centers for Environmental Information.¹ These extreme temperatures are happening due to the increase in greenhouse gases in our atmosphere, which is also known as climate change.
So, what is the solution?
This problem is very complex and does not have a one-size-fits-all solution; however, reducing and eventually eliminating the greenhouse gas emissions caused by fossil fuel powered vehicles would benefit the environment. According to the U.S. Environmental Protection Agency (EPA), "greenhouse gas (GHG) emissions from transportation account for about 29 percent of total U.S. greenhouse gas emissions, making it the largest contributor of U.S. GHG emissions."²
In light of this, climate change has become an increasingly pressing concern among officials in the United States and around the world over the past several years. Currently, in the United States, President Joe Biden and his administration are working on passing a bipartisan infrastructure deal that would prioritize actions such as:
- Building a national network of 500,000 electric vehicle (EV) chargers along highways and in rural and disadvantaged communities.
- Electrifying thousands of school and transit buses across the country to reduce harmful emissions and drive domestic manufacturing of zero emission vehicles and components.
- Improving healthy, sustainable transportation options for millions of Americans by modernizing and expanding transit and rail networks across the country, while reducing greenhouse gas emissions.
In addition to large scale policy proposals at the national level, some states are also taking action on their own. For example, both California and Washington are working towards mandating electric vehicles by 2035 and 2030, respectively, in an effort to phase out vehicles that use gasoline. Furthermore, within the private sector, several major car manufacturers (such as Ford, GM, Volvo, etc.) have announced that they will be going fully electric in the next decade, which would prove to be a significant change in the auto industry. Taken together, if implemented, these changes in both the public and private sectors would cause a massive increase in demand for electric vehicles (EVs) and therefore commercial electric vehicle chargers.
We decided to use our Data Science superpowers and find the areas where the EV demand will be the greatest in the future and make recommendations for an EV charging company. You can find the analysis here.
Data
First things first: data. We decided to collect data on electric vehicle title and registration activity in Washington state from the state’s API. This resulted in us having 433,172 EV transactions that spanned between 2010 and 2021. Since we were trying to predict how many EVs were going to be on the road over time, we ended up dropping all registration information and using 91,255 title transactions.
Defining "areas"
Our initial plan was to focus on analyzing this data by zipcodes; however, due to time limitations we decided to go with counties instead. We then resampled this information to reflect the monthly counts of electric vehicle purchases in each county. But, we had to translate this information into the total electric vehicle counts in each county over time so we took the cumulative sum of the data. At this point, the dataset was ready to be used in time-series modeling.
Which counties did this analysis include?
Once again, due to time limitations, we decided to focus on the top 10 counties in Washington state with the most EV transactions. These counties included: Benton, Clark, Island, King, Kitsap, Pierce, Snohomish, Spokane, Thurston and Whatcom counties.
What did the data look like at this stage?
Looking at the electric vehicle counts statewide, perhaps not surprisingly, we can see that the number of electric vehicles on Washington state roads has been increasing exponentially over the past 10 years.
On a high level, this confirmed that Washington state has the necessary demand trend for electric vehicles to make investing in it profitable for an EV charging company.
Looking at the individual counties, we saw that King County had been growing much faster compared to others. This is expected since King County includes Seattle, which is the largest city by population in Washington state.
Modeling
Our workflow here was the same for each county. After decomposing the data and looking at the trend and seasonality of the electric vehicle counts, we split our data into training and testing sets for each county. After fitting SARIMAX models to training sets, we used a library called pmdarima to find the best parameters for each model based on AIC scores. We then forecasted into the "future" and compared this information to the test sets. If the forecasted values were in line with the observed data, we moved onto fitting another SARIMAX model to the whole observed data (training + testing sets) and made predictions about the future counts of EVs in each county. If they weren’t, we iterated on different train-test splits until the forecasts were close to the observed data.
So, which county will have the most EVs?
Our models predicted that King County is going to have the most electric vehicles in 2023. 74,875 to be exact. Snohomish County was a distant second with 17,117 vehicles.
However, this is a little misleading. Our goal with this analysis was to find the counties with the most potential for an electric vehicle charging company to invest in. One of the major considerations that we had to take into account here was the existing charging infrastructure. After all, if a county has a boat load of chargers already available, then the commercial charging market may already be saturated even with the additional cars that will be added onto the roads in the coming years.
More Data!
So, we decided to collect data on the existing charging infrastructure from National Renewable Energy Laboratory’s (NREL) API. We ended up with 1,686 charging stations within Washington state (if you would like to see the exact location of each charger click here). Below is a breakdown of the charging station counts for each county:
As we can see here, approximately 50% of all chargers in Washington state are located in King County. So, as discussed above, the King County charger market may already be saturated and may not need more chargers.
How can we compare counties on a relative basis?
To be able to compare the counties to each other, we engineered a metric "EVs per Charger," which is the ratio between the projected number of EVs in 2023 divided by the number of existing charging stations in each county. The higher this ratio is, the more underserved the county is predicted to be in the future, which may translate into more opportunities for EV charging companies. When we sorted our data by this metric, we saw that King County is indeed less optimal compared to many of the other 10 counties:
Above, the top 4 counties based on the EVs per Charger metric are Island, Clark, Snohomish and Whatcom. However, when we took the following into account, even though Island County is leading the EVs per charger ratio, we came to the conclusion that it was not a real contender.
Wait, why is Island county out?
Firstly, Island County consists of a series of islands and has mostly residential buildings and state parks and very few commercial centers and office buildings. According to a study done by JD Power, "80% of EV charging is done at home – almost always overnight – or while a car is parked during the workday."³ So, the electric vehicle owners living in this county will most likely be charging their vehicles at their own homes instead of using commercial charging stations. Additionally, due to the limitations of the land, the population in this county may stagnate in the future, which may translate into the demand for EVs and therefore chargers stagnating as well.
Conclusion
To sum up, the momentum behind electric vehicles – generated by the recent advancements in technology and policy – makes today an ideal time to invest in charging infrastructure. As one of the states that is leading the charge in electrifying transportation, Washington state is one of the best places in the United States to build new charging stations.
We believe that the following counties (in rank order) have great potential in being highly profitable for an electric vehicle charging company:
1. Clark County
2. Snohomish County
3. Whatcom County
If you would like to see our interactive dashboard you can check it out here. Otherwise, feel free to check out the full analysis on GitHub.
Sources:
¹ NOAA National Centers for Environmental Information, State of the Climate: Global Climate Report for June 2021, published online July 2021, retrieved on July 28, 2021 from https://www.ncdc.noaa.gov/sotc/global/202106.
² Environmental Protection Agency. (2021). Carbon Pollution from Transportation. EPA. https://www.epa.gov/transportation-air-pollution-and-climate-change/carbon-pollution-transportation.
³ Voelcker, J. (2021, February 5). Forbes. https://www.forbes.com/wheels/news/jd-power-study-electric-vehicle-owners-prefer-dedicated-home-charging-stations/.