In this article, John Denslinger explores the scale of investment required to match the US’ electrification goals and deadlines with the power transmission infrastructure itself.
According to nearly 4,000 car dealers across the nation, EV sales have slumped noticeably. They point to a growing inventory of unsold vehicles on their lots visibly exposing a serious divide between supply and actual demand. Their assessment: mass market consumers are not buying EVs despite price cuts, incentives and tax credits. Investors and manufacturers have taken notice too. As financial losses mount, auto makers are publicly retracting nearly $100B of previously announced EV and battery investments despite the advantages of government mandates and subsidies. In hindsight, the disconnect was predictable. Eco-based timelines failed to consider the consumer’s preferences, finances and future innovations. Dealers said it best in their letter to the President: ‘EV mandates, however well-intentioned, are simply unrealistic’.
The initial EV sell was easy. The buyer was the ardent environmentalist, luxury shopper, early-adopter and those replacing that second car. These consumers were predominantly high earners who could easily afford untested technology. Unfortunately, the next wave of potential buyers sees the car as a critical necessity, not an option, not a luxury. The mass adoption buyer is more concerned about pocketbook costs and convenience and less about image and mandates. The hype has failed to convince these average consumers EV is an advantage and not another burden.
The gas fueled automobile remains the benchmark. Consumers understand the cost and convenience of ICE vehicles. That is not the case with EV. The technology is new and evolving with each new model. Reliability and performance are big unknowns. ICE and hybrid vehicles are readily available. For the mass-market consumer, EVs are just more expensive to buy with too many operating cost uncertainties like charging, maintenance, repair and insurance.
On the other hand, price is not the only drawback. Charging expense, charging time and charging convenience may also be seen as negatives. Studies confirm home charging offers savings over gas, but not everyone has a garage for home charging or access to a dedicated charging station. Those buyers without must rely on public charging stations which are more expensive, inconveniently located and sometimes unreliable to use.
That brings us full circle to the range anxiety concern. America’s vast network of gas stations matured over the last century while the build-out of fast charging public stations is just getting started mainly in urban locations. Statistica identified 53,393 public EV charging stations with 138,111 charging outlets as of mid-May 2023. By comparison, there are 168,000 retail service stations selling gas in the US, but that network spans both urban and rural areas. As the charging network expands and battery technology improves, consumer anxiety should lessen. But for now, it’s a big negative for those who can only afford one car to serve all their driving needs.
In summary, EV sales are growing, but the data shows the pace has slowed. Convincing new consumers to adopt innovative technology takes time. As dealers and manufacturers are realizing, ‘build it and they will buy’ is not a viable sales plan. The consumer’s decision is simply a pragmatic one: give me a price and a convenience that exceeds my ICE and hybrid alternatives. That will be the real stimulus to buy, not the mandates, not the hype.