Top Factors Affecting EV Adoption
Industry experts predict that electric vehicles (EV) will account for 40% of car sales by 2030. That signals a shift in momentum. We’re no longer simply tracking the growth of the EV sector, so much as witnessing the full-scale transition to fossil fuel-free motoring.
Yet for all the optimism around the electric vehicle adoption rate, certain human, structural and environmental factors still dictate the pace. In particular, instead of convincing consumers about the benefits of EV, the next challenge is in reassuring them that the charging network is in place.
What Exactly Does Widespread EV Adoption Mean?
Global EV sales barely nudged 2 million units in 2020, but could top 73 million by 2040. But it’s still too early to talk of “widespread adoption”. Of the 289 million cars registered on US roads, barely 2 million are electric. However, while EVs are still under-represented on the highway, they’re set to dominate on the sales forecourt. Given that the average lifespan of a car is just 12 years, the proportion of EVs on the road will spike dramatically as new stock replaces gas-powered vehicles phased out of service. There’s a parallel with smartphones, which barely existed in 2010, but are now owned by 85% of American adults.
Driver Factors
Ultimately, the ambition and innovation of the EV industry will count for nothing if it doesn’t resonate with the consumer. Drivers want a safe, affordable and comfortable way to get from A to B. For now, the burden is on EV manufacturers to sell that vision, but just as important is the supporting infrastructure. If drivers cannot charge their vehicles, or the incentives are not in place to spur behavior change, they can’t be expected to adopt EVs at the rate seen in other parts of the world, particularly China and the EU.
1. Demographic
Informing and educating the public about EVs is no longer the main obstacle to overcome. Tesla, for example, is now one of the world’s most high-profile brands. However, there may be work to do in weaning traditional (i.e. older) drivers away from gas. While studies show that 30% of newer drivers aged 18-25 plan to buy an EV next, the overwhelming majority (58%) in the US still plan to stick with gasoline. To reach that demographic, EV manufacturers have to show that electric vehicles are a better alternative in terms of cost and performance.
2. Availability of charging stations
A survey of US drivers revealed that the availability of charging stations is the #1 concern shared by 49% of potential EV buyers. As of May 2023, there were 138,100 charging outlets nationwide, of which just under a third are in California. Drivers in the Great Plains region, by contrast, will find charging opportunities sparse, and certainly too thinly distributed to support the typical mile range of an electric vehicle.
3. Charging Speed
The speed at which a driver can charge up their vehicle is another topic brought up often by hesitant adopters. While both the vehicle and the charging station play a role, experts are optimistic that the time it takes to charge will continue to push toward fueling up an ICE vehicle. Currently, it takes around 20 minutes for an EV to reach 80 percent charge with a Level 3 charger, but charging times are significantly slower for public (Level 2) and domestic (Level 1) chargers. But as better battery algorithms and new cooling technologies enter the market, expect charging times to come down (and “range anxiety” levels among drivers to drop accordingly).
4. Cost (and Cost Comparison)
A recent study showed 67% of would-be purchasers claim cost is a primary concern. However, market competition, falling battery prices and government incentives are pushing the cost of EVs to parity with gasoline. A landmark initiative is the $5 billion NEVI Program, which provides government funding to strategically deploy DC Fast Charging infrastructure and establish an interconnected charging network offering consistent data collection, access, and reliability. Qualifying projects can receive up to 80% of their costs from NEVI grants and must meet strict standards around charging experience, uptime, reporting, cybersecurity, and more. EV Connect conforms to the stringent standards set by the U.S. Department of Transportation and provides a seamless and compliant EV charging management solution for NEVI projects.
Manufacturing Factors
Without a large number of available vehicles, consumers are limited to what is out there. That burden is no longer carried by Tesla, which currently produces around 1.8 million cars a year. Mainstream manufacturers such as Ford and GM are already unveiling their own EV lines, alongside emerging brands such as Lucid and Nikola.
1. Incentives and restrictions
The extension of the light-duty EV tax credit through 2032 locks in generous savings for consumers in the short term. The 200,000 vehicle cap on manufacturers has also been lifted, while credits have been extended to used and commercial EVs. While the Inflation Reduction Act offers a powerful incentive at federal level, individual states are also showing ambition with legislative measures. California led the way with the August 2022 law requiring all new cars, SUVs and pick up trucks sold in the state to be zero-emission by 2035. Several other states, including Massachusetts and New York, are expected to follow suit.
2. Charging Infrastructure
The Infrastructure and Jobs Act allocates $7.5 billion to support a nationwide charging network, including fast chargers on the interstate highway system. The goal is to provide 500,000 EV chargers through a national EV program, settling the issue of range anxiety once and for all. Companies like EV Connect continue to drive the industry forward with charging solutions. We’re currently approved for over $2.6 billion in utility and local government incentive programs. With
one charger needed for every 10 to 15 EVs, there’s work to do and we’re doing our part.
Environmental Factors
While California is unique in imposing vehicle emission standards that go beyond federal standards, it will take a nationwide commitment to rally momentum behind EV adoption. So far, 14 states have adopted California’s zero-emission and low-emission targets, which will strengthen the push toward delivering a 50% market share for EVs by 2030.
1. Fleet Charging
It’s not just individual drivers who are exploring the tax benefits (and navigating the legal changes) around EV ownership. Fleet managers too are increasingly likely to take the plunge - provided the financial incentives and logistic support are in place. These initiatives allow fleet operators to acquire and deploy zero-emission alternatives without the upfront cost.
2. Grid Development
Two factors are crucial to the expansion of a nationwide grid that can meet the needs of future EV drivers. The first is an open and flexible charging platform that provides a seamless charging experience for drivers of all models. In that respect, (and as a hardware-agnostic solution) EV Connect welcomes the adoption of the North American Charging Standard (NACS) by Ford and GM (joining Tesla). The second is the availability of clean, smart charging solutions that maximize sustainability and efficiency through solar power and V2G technology.
Innovation curve
The EV market is already evolving at a furious pace, but it’s still important to keep an eye on innovations and developments further down the pipeline. Watch out for the impact of these factors on EV adoption.
Better Batteries
Since 2021, demand for the lithium that powers EV batteries has oustripped supply. That puts pressure on manufacturers to deploy advanced battery technologies so that fewer critical minerals are required, and to explore alternative technologies, such as graphene or sodium ion, to deliver cleaner, more sustainable power. At the same time, major manufacturers are already rolling out solid-state batteries that charge faster and can offer a range of up to 745 miles.
EV Adoption Recap
What’s sometimes easy to forget is that it’s not just one of these factors independent of the rest but an intricate blend of all of them that affects EV manufacturing and sales. All of these factors must coordinate in specific ways in order to impart full-scale EV adoption. But consumers, manufacturers and sellers alike should not fret: It’s not a question of “if” but a question of “when.”
Sources
Center for Sustainable Energy - The State of Electric Vehicle Adoption in the U.S. and the Role of Incentives in Market Transformation
Government Technology - What’s Standing in the Way of Full-Scale EV Adoption? A Lot
Forbes - Growing EV Adoption: The Solution Already on The Road
Bureau of Labor Statistics - Charging into the future: the transition to electric vehicles : Beyond the Numbers
IEA - Executive summary – Global EV Outlook 2023 – Analysis - IEA