EVs Still Lead Grid Growth, Even in the Age of Data Centers

BloombergNEF says electric vehicles will demand more new power lines and substations than AI data centers, shaping how utilities plan investments.

Electric vehicles, not data centers, remain the largest force driving new grid investment in the United States. A new analysis from BloombergNEF finds that while the AI boom has made data centers the industry’s fastest-growing electricity consumer, EVs are still expected to account for the majority of transmission and distribution spending over the next decade. Utilities are under pressure to expand substations, poles, and wires at an unprecedented pace—investments that could decide how affordable, reliable, and sustainable the future grid becomes.

BloombergNEF projects that by 2035, EVs will account for roughly 25% of total U.S. electricity demand growth, compared with about 15% for data centers. That gap matters because EV charging is dispersed across neighborhoods and highways, requiring more local distribution upgrades, while data centers are typically concentrated in industrial clusters that connect directly to high-voltage transmission.

The firm estimates utilities could spend hundreds of billions of dollars on grid expansion in the next decade, with nearly half dedicated to EV-related infrastructure. Already, automakers and charging companies are lobbying for faster permitting, more interconnection capacity, and targeted incentives to avoid bottlenecks.

Data centers, meanwhile, are drawing scrutiny for their energy intensity—especially AI-driven facilities that can consume up to 50 times more power than a typical office building. Still, BNEF notes that the scale of EV adoption, spurred by federal incentives and state mandates, represents the deeper and more sustained demand driver.

Why It Matters

The findings come as U.S. utilities revise long-term resource plans to account for surging load growth after decades of flat demand. Deloitte projects data centers could consume as much as 15% of U.S. electricity by 2030, but EVs are more broadly reshaping everyday grid operations—requiring new substations in urban areas, upgraded feeders in residential neighborhoods, and charging corridors along interstate highways.

For consumers, the stakes are high: without sufficient grid upgrades, both EV drivers and cloud companies could face reliability risks, slower adoption, and higher costs. Regulators are also weighing how to allocate costs fairly—whether through special tariffs for hyperscalers or public investment in EV charging networks.

Ultimately, the report underscores a key reality: the grid isn’t being reshaped by one technology alone, but by the collision of multiple trends. EVs may be the bigger force, but utilities will need to juggle both the electrification of transport and the digitalization of the economy at the same time.

The Bottom Line

BloombergNEF’s analysis reframes the debate about what’s fueling America’s grid transformation. While AI-powered data centers dominate headlines, it’s the millions of EVs on city streets and suburban driveways that will keep utility planners busiest. For regulators, investors, and customers, the challenge is the same: ensuring today’s capital spending delivers a grid capable of serving tomorrow’s electric future.

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