European countries accounted for 215 thousand electric car sales in 2016. Solely the Netherlands accounted for 6% market share (EVs and hybrids) in 2016, according to a report by the International Energy Agency (IEA). China has proven its leadership in EVs once again. It surpassed all other nations in the world with a growth of 69% of the newly registered EVs in 2016. In the USA, 2017 was literally the year of the electric vehicle. Yet, something seems a little too slow in the whole process…
The foggy future of EVs
Despite this year’s success, however, miles traveled still increase at a higher rate than the penetration of the EV. For now, it seems like a good sign for the petroleum industry and conventional cars. But will this last? While some say that we are yet to see how the EV market will expand, others are quite doubtful about the sustainability of their growth.
- Why are not all automakers producing EVs already?
- Is it that some countries are not too eager about EVs?
- Are oil companies afraid of EVs and purposefully not letting go?
- Or are EVs that hard to bring to the mass production?
All these questions make the topic of EVs sound like the next Illuminati hoax. Yet, there is some truth in them. There are a few reasons why electric vehicles are not fully replacing conventional cars (just yet).
Pumping gas is easy. Charging is not.
EVs have been on the market for over a decade now and they have not reached the mass market in any country despite all efforts. Why? To some, the only reason is the consumer. Consumers have tons of opportunities to buy an electric vehicle instead of a gas one. And they haven’t. In the US only over 34 million vehicles have been sold since 2015, almost all of them run on gas (literally 99%). Even though people like the idea of electric vehicles – the efficiency and the environmental protection they bring – when it is time to make a new vehicle purchase, they do not choose an electric vehicle.
Maintenance is still one of the main obstacles for the mass adoption of EVs. Electric vehicles are not as easy to support as gas and oil vehicles. The lacking or underdeveloped network of charging stations is still one of the main barriers for buyers. The need for more stations is urgent especially in dense urban environments where battery power might eventually make the most sense. And at the same time, you can fuel up from just around the corner. This makes it seem impossible for EVs to reach this large of an infrastructure in the next few decades. And whoever says otherwise has been reading too many comic books.
More energy required for production
Experts consider electric vehicles to be a hoax because automakers in the field neglect the high levels of energy and electricity used in the upstream activities. The manufacturing processes behind each vehicle require even more energy than the production of conventional vehicles. Even though the cost of batteries is dropping significantly, the production process behind them stays the same. And it is not quite environment and resource-friendly. The production of batteries, no matter the cost, and the establishment of charging networks are said to have a higher impact on the atmosphere than the already established processes behind vehicles with combustion engines.
The unsolicited competition
If people are looking for alternatives to ICEs, they have plenty of options to turn to. In reality, there is already a number of other good alternatives to conventional cars. Why turn to EVs? You have hybrids all around now. Some people believe that cars can run on water, too. And theoretically, they can. Maybe someone out there is using it instead of oil and he will soon become the next eco trend… Oh, wait.
Hydrogen fuel cell cars are already a trend. Supporters claim that more than 20 million hydrogen fuel cell vehicles will be sold by 2032. Hydrogen fuel cell cars use hydrogen and oxygen to produce electricity and power the vehicle’s motor. Technically this makes hydrogen fuel cell cars a type of electric vehicles but with a certain difference. There is an audience for everything and there are already people who prefer them over EVs.
If anything, hybrids and plug-in hybrids have gotten so clean and efficient it has become all the more difficult to justify the switch to pure battery power. All of these alternatives are getting more and more attention both from the press and from the general public. Even self-driving vehicles are on the radar to become the next trend that reaches the masses. It seems like people are more curious and receptive to autonomous driving than of EVs…
Where do countries stand?
It seems like whenever an innovation is failing to reach mass market quickly, the problem is always hidden somewhere in politics. Everyone turns to government to see their reactions and eagerness to support, or dramatically reject the invention. In the case of electric cars, however, governments worldwide do not feel like such an obvious threat to EVs. On the contrary, they are some of their biggest fans!
Governments have significantly increased their support for EVs in the recent years. This is mainly because they see them as a key way of tackling air pollution and climate change. Projects related to EV development receive incentives to stimulate their expansion in numerous places around the world. Denmark and Norway offer some of the highest electric-vehicle purchase subsidies. And countries like Britain, France, and India, are some of the first who have said they want to end sales of gasoline and diesel cars and light trucks in less than 25 years.
What governments are doing best is supporting automakers in this initiative. Yet, they have not put much effort into helping the consumer in this transition. If they want to bring the vehicles to the masses, they need to do some work on the educational side as well.
Can EVs future be brighter then?
As long as EV producers keep relying simply on consumers’ decision to turn to EVs, they will only develop at the same speed. If they want rapid acceleration, something else needs to change. When producing EVs automakers should evaluate the present situation from all points of view and then start disturbing the current reality.
Apparently, just like anything else that needs to reach the mass market, the adoption of EVs requires behavioral change and a shift in people’s thinking. This needs to be the focus of EV producers. Smooth driving experience and top-notch technical parameters are a must and producers shouldn’t take their eyes off them. But they need to work on developing people’s culture for EVs simultaneously. Here are a couple of trends that can help influence people and accelerate EVs growth.
The end of auto ownership
Changing mobility patterns, for one thing, can have a huge influence on the adoption of EVs if only companies would take them into account.
Up to a few years ago, people were buying more and more cars, but now we see how these cars remain inactive most of the time. Studies show that a car that is used for 50 minutes a day remains unused for over 95% of the time. Despite the long distances that many still have to drive, their ways of coping with this are changing. They are using transport services of all kinds, even Uber and Lyft. They are biking, walking or using transit more often. Or at least when driving, they are not driving solo.
Shared mobility is one of the trends that is here to stay and it will be used as a basis for forming new business models for the industry. What will be more important is not the number of units sold but the number of miles driven. Thus, one possible way forward for EVs is to become part of this new behavior. According to Morgan Stanley, we will be seeing more and more electric taxis (even autonomous ones), than personal conventional cars. Leasing electric vehicles is another possible way in. When technology is developing so quickly, people don’t want to own something that will be obsolete in a couple of years. Especially when it’s a car. Leasing can be a beneficial model both for auto companies and for people who would find both the functional benefit and the excitement in EVs.
When focusing on bringing service to people, and not simply on the sale of a vehicle, companies can become profitable more quickly. There will be fewer more efficient vehicles in the streets to serve more people.
The voice of the big brands
We have seen nearly a dozen of the large automakers promising to focus on EVs in the next years. Already some of the biggest brands in the US are pulling their diesel vehicles out of the market and this could be the first step towards EVs. Companies like Volkswagen and Mercedes-Benz are facing continuous allegations of rigging the emissions tests on their diesel vehicles. The EPA might be playing the bad cop here but they are definitely doing a favor to the EV market.
Others like Volvo, General Motors, and Ford are already a huge step ahead of the others. Volvo, for example, claimed they are aiming to introduce all-electric models in their line-up by 2019. Jaguar Land Rover followed right away. And this already seems massive! Even Elon Musk and his globalization plan do not hold people’s attention that much anymore. Everyone seems to be paying attention to what others will do next in the game of electric vehicles.
An interesting trend occurring in the industry is the partnership between several automakers in the development of new technologies. Toyota and Mazda, for example, are working on electric vehicles together. Even though they are not splitting the whole upstream process equally, their partnership is to deliver EVs with solid-state batteries, which is an innovation to the auto market. Consumers should expect the first Toyota-Mazda EVs sometime in the next decade. But let’s be hopeful that more common partnerships will appear in the industry till then. Even more that can bring more EVs on solar energy – a model that could literally solve the infrastructure problem.
We see this pattern in other industries too. Companies which were previously considered competitors now join forces to serve the market. It increases not only their shared capabilities but also their reach in the market – something that EVs definitely need.
As a whole, we can say that EVs are doomed if they continue their strategy the way it is today. Unless automakers change their behavior, the expansion of EVs will only exist in terms of media coverage and not in numbers of cars in the streets. A new business model is what the industry needs. Thinking of transportation as a service will bring automakers closer to the people. Electric vehicles will have a larger presence in their transport behavior and bigger positive influence on the environment. Until this happens, however, EVs will remain nothing more than a niche that’s nice to read about.
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