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Xcel Energy to Expand Electric Vehicle Adoption to Trim Costs

Zacks Equity Research

Xcel Energy Inc. XEL plans to power 1.5 million electric vehicles (EV) in its service areas by 2030, increasing the EV count on roads by 20% along with cutting carbon emissions from transportation significantly. This move will save billions of dollars that customers usually spend on fuel costs.

Xcel Energy already commenced initiatives to eliminate barriers to EV adoption while making EV charging easier and more affordable. The company proposed major plans in Colorado, Minnesota, New Mexico and Wisconsin with an aim to support residential charging, increase access to electric transportation for all customers and expand public charging options. It intended to invest $300 million at the moment to accelerate adoption of EVs in its communities.

Road Ahead

The company is planning to provide a new charging infrastructure and customer programs to fulfill its vision of clean, affordable transportation in the eight states that it serves. The electric utility is actively partnering with companies to look for innovative ways to devise plans,focusing on equity, accessibility and fairness, which will allow everyone to benefit from the uptake of EVs.

Xcel Energy is creating new charging options for customers, ranging from residential to companies to government agencies with large vehicle fleets. It plans to electrify all sedans by 2023 and all light-duty vehicles by 2030 besides converting 30% of its medium- and heavy-duty vehicles to EVs by 2030.

The Electric Vehicle market of the United States is gradually expanding with more drivers opting to shift from gas driven vehicle to EVs. So developing the EV charging infrastructure is quite essential for increasing the usage of EV. In order to promote the plying of EVs in California, Pacific Gas & Electric PCG has been highly dynamicin developing EV charging infrastructure in the state.

Benefits of EV

The switch to EV will not only reduce the bills of customers using it but will also benefit those who never experienced the taste of cleaner air. Remarkably, by 2030, an EV will lower the annual fuel cost by $700 from the expense of a gas-powered car. Thus, it will save customers $1 billion every year.

In line with the company’s vision to provide 100% carbon-free electricity by 2050, powering 1.5 million EVs will lessen carbon emissions by nearly 5 million tons annually within 2030. Its increasing use of clean energy to run EVs will decrease carbon footprint by 80% from the levels escalated by gas-powered cars.

Zacks Rank & Price Performance

Currently, the stock carries a Zacks Rank #3 (Hold). In the past six months, shares of the company have gained 1.4% against the industry’s fall of 18%.

Stocks to Consider

A few better-ranked electric utilities are Korea Electric Power Corporation KEP and Huaneng Power International, Inc. HNP, both carrying a Zacks Rank#2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Korea Electric Power has a long-term earnings growth rate of 5%. The Zacks Consensus Estimate for 2020 earnings has been steady in the past 60 days.

Huaneng Power International has a long-term earnings growth rate of 13.14%. The Zacks Consensus Estimate for current-year earnings has been revised 24.4% upward in the past 60 days.

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