The Problem With Electric Vehicles...
In the past six months, I can’t tell you how many times I’ve overheard a conversation or read an article talking about how electric vehicles (EVs) are the future of the automotive industry.
Over the past decade or so, there have been government incentives in place to persuade consumers to consider going electric when buying their next car, but those incentives never seemed to be enough — or at least, not enough for consumers to go all-in on electric.
After all, there was still a lot to consider about owning an electric vehicle and whether there would be the infrastructure throughout the U.S. to support an electric vehicle boom. All important and fair things to ask.
In 2021, there have been even more conversations and pushes toward converting to electric vehicles, both in the consumer world and in the government and its agencies.
The cries of climate change and how the world needs to act now have been heard. Some people are still fighting the idea. Maybe those people just need a little more convincing that EVs will be the future.
What's the Plan for EV Infrastructure?
It kind of reminds me of this conversation I had with my dad over the summer. He has been a little hesitant about this big push for electric vehicles. He isn’t against something that will be good for the future of the planet and the environment, but he needs more clarity on how electric vehicles will be implemented in a way that will give everyone affordable access to the technology.
Because he lives in the Midwest — some might say he “lives in the middle of nowhere” — and he is concerned about how he and others will get access to charging stations and whether those charging stations will hold longtime constraints.
We go to the gas station nowadays, and if there isn’t a line or it’s not busy it takes under 10 minutes to fill your gas tank. There's not a lot of time wasted waiting around to get your vehicle the fuel it needs. What will the future look like when we need to fuel up our electric vehicles?
Will we have to go to a place similar to a gas station? How long will it take to fuel up your vehicle? How much will it cost? There are a lot of unanswered questions or questions with only vague answers. And I think these are on the minds of many everyday Americans.
If charging your battery ends up being more expensive than filling up your gas tank, then where is the incentive to make the switch? Most Americans have grown up in a world that's taught them to consider what’s best for them and their finances — and to always choose the best possible deal when it involves their money.
Too Good to Be True?
According to a market research report published by Meticulous Research, the electric vehicle market is expected to grow at a CAGR of 33.6% to reach $2,495.4 billion by 2027. The report finds that:
The growth of the electric vehicle market is mainly attributed to factors such as supportive government policies and regulations promoting the adoption of EVs, increasing investments by leading automotive OEMs, rising environmental concerns regarding automotive emissions, and the decreasing prices of batteries. However, the lack of charging infrastructure and standardization is likely to hinder the market’s growth.
The government, automakers, marketing firms, and news articles can tout that there will be massive growth available. However, the infrastructure and standardization of the EV market could have a detrimental effect on any efforts to push the EV market into the future and create normalization for the everyday consumer.
And that's what the Biden administration's ambitious $7.5 billion plan for infrastructure is supposed to do — expand electric vehicle charging to underserved areas. However, it may appear that $7.5 billion might not be enough to make these plans into reality.
It's Going to Be Pricey...
California is one of the U.S. states with the largest number of EVs and one of the most advanced charging infrastructures. It has poured more than $2 billion in various EV incentive programs over the last few years and still has less than 40% of the charging infrastructure needed to support the projected EV growth by 2025, according to a U.S.-wide charging gap study conducted by the International Council on Clean Transportation.
It's going to be difficult to reach these underserved areas and entice consumers to go electric when they purchase their next car. Not to mention, electric vehicles will need to become more affordable so lower-income households have a chance of owning EVs. Otherwise, they'll continue to buy what they can afford, which will most likely be gas-powered vehicles.
In order to meet these growth trajectories for the EV market in the next decades, there will need to be a lot of money and effort invested into EVs that are affordable and accessible to every American, along with the infrastructure to support them.
Until next time,