Executive Summary

A growing population and booming economy mean more cars and trucks for personal travel and to transport both the goods the state produces and those it consumes. Cars and trucks traveled 260 billion vehicle miles on the state’s roadways in 2021, offering just one measure of the sector’s outsize importance to the Texas economy and its equally outsize contribution to greenhouse gas emissions. Rail, air, and marine transportation provide crucial additional transit for people and goods, adding to emissions. The number of vehicles on the state’s roads, rails, and waterways will not drop anytime soon. In fact, with anticipated population growth and the strong correlation between gross economic activity and passenger and freight vehicle miles traveled, the numbers will grow substantially, making it crucial to address transportation emissions if we are to reach net zero targets.

The transportation sector currently contributes about one-third of total emissions in Texas. Unlike industrial and electric power generation, GHG emissions from transportation are widely distributed and dilute rapidly to atmospheric concentrations. Converting those vehicles to electric or other zero-emission vehicles will have real, quantifiable impacts on public health – fewer deaths, fewer asthma attacks, fewer sick days, a boost that can be measured in improved economic output. However, even under the most aggressive policies considered here, requiring all new vehicles sold in Texas by 2040 to be electric or other zero-emission vehicles and assuming the electric grid has converted to net-zero generation, our research shows the transportation sector won’t be carbon-neutral by 2050. Even under relatively light regulations, the financial costs will go far beyond the purchase price of new vehicles, requiring investments in job training to bolster and maintain the workforce and multibillion-dollar expenditures for charging stations and other infrastructure.

To better understand the complex interplay of factors involved in decarbonizing the Texas transportation sector, we built on our electrification models and evaluated potential transit-related policies that could guide the state to net-zero emissions by 2050. These include a “business as usual” scenario that relies on no substantial policy or market deviations from the current scenario, to boost the electrification of the Texas fleet, made up of light-duty vehicles (LDVs), and medium and heavy-duty vehicles (MDVs and HDVs), a scenario where all new vehicles sold are ZEVs by 2050, and an aggressive policy scenario where all new vehicles sold are ZEVs by 2040. We also address possible future scenarios for rail, air, and marine transportation.

Key Findings:

• The most significant impact on greenhouse gas (GHG) emissions from the transportation sector comes from the movement of passengers and freight through light, medium, and heavy-duty vehicles. The rapid adoption of electric vehicles in the LDV market has been spurred by an accelerated expansion in the number and type of electric vehicle (EV) models being developed at various price levels.
• Anticipated increases in population and continued economic growth will result in significantly more vehicles on the road, more overall vehicle miles traveled, and a higher total volume of freight transported on state roads. There will be an additional 2.5 million LDVs on Texas roads between 2022 and 2050, assuming the vehicles have an average life of 15 years and travel an average of 11,500 miles each year. EVs in the light-duty fleet are expected to grow from 8% of new car sales in 2022 to about 63% of new car sales in 2050 under a business-as-usual scenario. Alternative scenarios assume EVs make up 100% of all new sales by 2040 or 2050, respectively. Simultaneously, by the year 2050, internal combustion engine vehicles (ICEVs) will make up 60% of the total fleet under the business-as-usual scenario, 32% for the 2050 scenario, and 7% for the 2040 scenario.
• An additional 82,000 medium and heavy-duty vehicles will be on Texas roads by 2050, assuming the vehicles have an average life of 12 years and 25,500 miles of average annual vehicle miles traveled.
• If the current electricity mix were to persist in 2050, under the most aggressive decarbonization target, which would require EVs or other zero-emission vehicles (ZEVs) to make up all new sales by 2040, emissions from on-road vehicles would decline by about 35% for LDVs and 52% for M/HDVs. In contrast, under the business-as-usual scenario, emissions will decrease by about 10% for LDVs and 27% for MDVs and HDVs. If the electricity mix reaches net zero by 2050, emissions for LDVs will drop by 27% compared to current emissions under the business-as-usual scenario and by 68% under the 2040 scenario. For MDVs and HDVs, emissions would drop by 21% compared to current emissions under the business-as-usual scenario, and by 76% for the 2040 scenario. We do not anticipate achieving net-zero emissions by 2050 in the road transportation sector under any of the scenarios.
• Rail, aviation, and marine sectors contribute about 12% of emissions from the transportation sector in Texas. Electrifying the fleet or producing carbon-neutral fuels using carbon-neutral electricity could reduce rail, aviation, and marine freight-related emissions by as much as 99% by 2050, compared to a 2022 baseline.
• The electrification of the road fleet will be expensive; in addition to the cost of vehicle replacement, the change will require an annual expenditure of $250 million to $640 million for Level-2 (L2) charging stations and between $500 million and $1.3 billion for DC Fast Charging (DCFC) stations in 2040. The cumulative cost for charging infrastructure ranges from $19 billion to $35 billion between now and 2050. That doesn’t include the cost of the land or other infrastructure required to deliver electricity to the stations. The switch from ICEVs to EVs will result in the retirement of many gas stations, requiring expenditures of between $2 billion and $5 billion for environmental remediation.
• Based on current battery technology, the total volume of lithium and cobalt necessary for the number of EVs expected in the state by 2050 would exceed the 2021 worldwide production of both minerals. There will also be a significant increase in the consumption of materials including copper, manganese, and graphite.
• The electrification of the on-road fleet and job losses associated with the retirement of the conventional fleet will add more than 130,000 jobs to the Texas economy by 2050 under the business-as-usual scenario. These include direct, indirect, and induced jobs in the transportation, electricity, advertising, retail, data and networking, and maintenance sectors. The policy target of all new sales being EVs by 2050 will add about 40,000 jobs, while the aggressive policy target of all new sales being EVs by 2040 will add about 180,000 jobs by 2050. While prevailing hourly wages in the traditional auto sector range from $26 for auto-service technicians and mechanics to $60 for a unionized auto assembly worker, most jobs in the EV industry are not unionized and range from $17-$21 per hour. Hence, economic gains from the new jobs will require higher wages, and the current workforce will require upskilling and reskilling to offset any loss.