The Adoption of EVs Relies Heavily on Consumer Education and Infrastructure Development
One of the hot topics of CES 2020 is electric vehicles. For one, Fisker Inc. just unveiled a $37,500 pre-tax credit SUV that could be a potential tesla competitor when it arrives next year.
Fisker Inc. CEO, Henrik Fisker, participated in a panel discussion at this year's consumer electronics show discussing what the next several years of EV adoption looks like along with other industry executives from Cox Automotive, Kelley Blue Book, and EVgo.
The discussion tended towards one about how drastically different electric vehicles are from traditional internal combustion engine cars or ICE. No longer do consumers think about who made a car's engine or transmission or what it sounds like, because, well, in electric vehicles, none of that really matters. There aren't any gearboxes, and all anyone really cares about in electric automobile engines is how much torque they can output.
For the most part, electric cars are viewed differently by consumers than gas cars. They're seen as a whole picture, rather than the sum of their parts like ICE cars are.
What will accelerate EV adoption
Among the panel of executives and subject matter experts, the consensus around what to do to increase electric vehicle adoption was fairly universally agreed upon: decrease friction.
As consumers, we're used to a lot of things that make our lives easier with ICE cars. We can fill up practically anywhere; we know how they work, how they shift, we understand them.
For electric vehicles, none of that is the same.
Research from Cox Automotive suggests that consumers top 5 concerns for purchasing electric vehicles are:
- They're too expensive
- There is a lack of charging stations
- Low car range
- No trust in battery holding charge
- Concern about battery replacement cost
From that list, it's clear what's keeping people from adopting EVs: Cost, range, and battery understanding.
Easing the concerns with EVs
To address each of these concerns, let's first take a look at the cost. Henrik Fisker made sure to note, through self-promotion, of course, that cost on EVs is coming down. For example, their new SUV will cost only 29,999 after the federal tax credit consumers receive in the US. It will also have an estimated range of 300 miles.
For EVs, the battery cost makes up 40 to 50 percent of the overall vehicle cost. That ultimately means that electric vehicle prices will decrease as battery production costs decrease. In essence, the pricing trend in the EV industry will theoretically mirror what we see in every other electronics industry – tech will get cheaper.
For range, the panel agrees that we're already reaching the sweet spot of range for most consumers. Studies have shown that the average driver only goes about 50-80 miles on their daily commute. Meaning that essentially all range in EVs over 100 is buffer "feel good" range. Now, that obviously doesn't work for everyone.
For myself, I've hesitated to take the EV plunge as I frequently take several hundred-mile long trips for work. However, the long-range Model 3 sure does have me tempted. But I digress.
The range is a concern for consumers because of how much friction exists in the current infrastructure for recharging. The panel agreed that eliminating that friction in the charging infrastructure, i.e., making chargers faster and easier to find on your route with ease, will eliminate range concerns. Many ICE cars only get 250 miles of range, but that doesn't concern anyone because there's a gas pump on every corner. As soon as chargers speed up, which they already are getting down to 15 minutes for quick charging, that friction will fade.
Finally, since EVs are so drastically different from ICEs, consumers are generally unaware of how they work from day to day basis. Most people haven't ever owned or even used an electric vehicle, meaning that they have countless concerns about how long the battery will last, if it will degrade and leave them stranded, etc. These issues are solved with proper electric vehicle education.
Take Tesla, for example. They don't spend anything on traditional marketing. Instead, the cars sell themselves. If someone you know gets a Tesla, for most people, they suddenly start considering getting a Tesla too. That's because as EVs infiltrate our daily lives, we become more okay with their quirks and features.